Whether you own a few single family homes or focus on apartment buildings, the fact is, we’re living in the age of “amenity creep” – and it’s only going to get worse. According to Curbed, today’s property owners are overwhelmed by efforts to add new features to their rentals, from traditional offerings like dog runs and gyms to communal gardens, movie theaters, and even co-working spaces. But are these amenities worth the investment? With a shift towards a buyers market coming in the next few years, added amenities might be necessary, but property owners need to choose wisely to maximize ROI.
Assess Your Audience
If you’re going to add new amenities to your properties, the first step is to assess your audience. What do your tenants – or the tenants you want to attract – really want? Though the big buys are splashy and look good when trying to attract new residents, luxury add-ons quickly lose their shine. Rather, if you’re going to invest in capital improvements, tenants want upgrades that make life easier, such as access to onsite laundry, a dishwasher in every unit, and more storage space.
From an aesthetic perspective, most residents want to see improvements to bathrooms, to have new counters and cabinets, and larger windows. In other words, they want the types of improvements you’d likely make even if you weren’t battling amenity creep, and these improvements will measurably reduce tenant turnover and increase satisfaction.
Another factor you should consider when adding amenities to your properties is which improvements actually increase ROI and which are primarily a ploy for publicity. For example, outdoor space is highly valued, especially in urban areas, and it can be a very cost effective enhancement depending on the variety of outdoor space. If you rent to a lot of families, the best option may be to add a large, fenced outdoor play area for residents to share, but if ground-level space is at a premium, you might opt to add individual balconies instead. Research shows that on average, people will pay at least $50 a month extra for an apartment with a balcony than for one without this outdoor add-on. Even a small balcony, then, will pay for itself quickly.
Don’t forget to take advantage of unused spaces to give your property a boost, such as your roof. Roof gardens and decks are popular, can be very spacious, and are perceived as high-end, even if they’re inexpensive to install. Essentially all you have to do is fence the space in, add some lounge chairs, and suddenly your tenants have a space they’ll be proud to show off to visitors. A roof lounge is also an ideal place to install a lap pool, fire pit, or other outdoor amenities that you don’t have space for at ground-level.
When we talk about amenities, one factor owners tend to overlook is that not all amenities are material. Another “amenity” that tenants will typically pay more for is the ability to have pets in the home. In fact, this may be one of the most high-value changes you can make to your property if you don’t already permit pets. Yes, it may cost you a little more in repairs and maintenance – though you’ll likely recoup that in fines or retained security deposits – allowing pets will attract a lot of tenants. Approximately 60% of American households have a pet of some kind, and they all need to live somewhere.
Tech For Tenants
As for high-end amenities, the fact is that, unless you’re a multi-millionaire property owners with large apartment complexes in your portfolio, you’re probably not going to be installing a movie theatre any time soon. Instead, you need to identify which elements in the amenities race you can, and should, add to your property. The leading candidate: smart home technology.
After a few years, and a few iterations, smart home technology prices are falling rapidly, making it affordable to implement these devices on a large scale, and also making it easier to manage your properties. For example, video doorbells can help prevent package theft by allowing tenants to see who is at the door, while new voice recognition technology can take work orders and add them to the queue without any paperwork. Tenants appreciate these little conveniences, as well as features like smart locks, lighting, and thermostats, which have started to be viewed as standard in modern apartments and homes.
Finally, if you do own high-end properties, you will need to consider luxury amenities; it’s just what it takes to stay competitive. So where should you start? One niche that’s especially popular with tenants in the luxury market is wellness amenities. These tenants want a high-end gym, a swimming pool, and other related features. Of course, they’ll happily pay more for these features since that allows them to drop their gym membership and work out with greater convenience, but there’s one hitch: you’ll need the space. A gym will either take over what could be another apartment or require you to build a new structure. Despite this, gyms tend to be a cost-effective addition since they’re a common resource, and all tenants pay into the service, even after it’s paid off.
As for those movie theatres and co-working spaces, for now, there’s no reason to worry about those. The types of tenants who are willing to pay extra for these types of amenities are few and far between and rarely renting from small property owners. For ROI purposes, you’re better off focusing on mid-level amenities that will attract a broader group of renters.
If you’re a property owner attempting to strike a balance in the midst of today’s amenities race, Green Residential is here to help. With decades of Houston-area property management experience, we know what your tenants are looking for and can offer advice while handling day-to-day operations. From client screening to maintenance and rent-collection, Green Residential acts as the feet on your ground for a seamless experience. Because when it comes to property management, you need to take the long view. Amenities come and go, but good client relationships – fostered by experienced property managers – will carry you forward.