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Even in New York, the laws of supply and demand only get you so far when it comes to maximizing the profit potential of your rental building. Much of the rest relies on a secret sauce of capital improvements: a strategic mix of bells and whistles that draw tenants willing to pay higher rents, along with improvements your tenants may not even notice that reduce the cost of operating your building.
“Being proactive is very important in building management. Sometimes you need to step back and think of the long term,” says Trevor Matwey, a former property manager and a research analyst for LandlordsNY, a free peer-to-peer and expert advice and resource network for professional New York landlords. “Investments that improve the look and feel of a property attract and retain more tenants while enabling you to charge higher rents.”
Matwey asked LandlordsNY members to name the improvements that have the biggest payoff. Here’s what they said:
- New lobby The lobby is the first thing a prospective renter sees and sets the mood or feel of the building. “First impressions are everything,” says Matwey. “The more high-end it looks—bright, well-lit, clean, with an awning leading into the lobby, and a modern renovation, not one from 20 years ago--the more rent people are willing to pay.”
- A doorman The security and comfort of a doorman may not be priceless, but it will certainly increase what renters are willing to pay. “A doorman building serves as a barrier between tenants and potential street-side dangers and also gives the building a more luxurious feel,” says Matwey.
- Gym Adding and operating a gym isn’t cheap. But to time-strapped renters who don’t want to leave their building at 5 a.m. to go to an outside gym, it's a must-have and lifts the overall stature of a building to "high end,” says Matwey.
- Roof deck In recent years this has become a much more sought after amenity. “The world has gone ‘social’ and this is one of the main ways building owners have adapted to the phenomenon,” says Matwey. “People love common outdoor spaces where they can meet with friends, hang out, or just relax under the sun. In addition, with outdoor space at such a premium, it will draw in people who cannot afford apartments with terraces or those who just love the outdoors.”
- Playroom If your building has many two- or three-bedroom apartments and you have many families as tenants, this amenity should be among your top priorities. “For parents of small children, there is nothing more important than having a place to escape to or a change of scenery on a rainy day,” says Matwey. Bonus: When thought out right, it can also serve as a meeting room or entertainment space when not in use by nannies and parents.
- Updated/renovated elevators “An elevator is the most used ‘room’ in the building, and having it look beautiful and work well is of key importance in improving one’s building for the present and the future,” says Matwey. It’s a large initial investment to either replace or refurbish--for pricing and quotes, register for free at LandlordsNY to contact vendors directly through the site--but this upgrade goes a long way toward boosting the efficiency and status of a building as well as the happiness of your tenants.
- New windows Another large initial investment, but done right, it will last 20 to 25 years and help you save on your heating and cooling costs. In addition, says Matwey, new windows are eligible for a J-51 tax rebate, so there is certainly an incentive to get this done. Replacing the windows will also improve your building’s aesthetics, both from the inside and outside.
- Upgrading the electrical service Outdated, low amperage electrical service is both inefficient and can be a safety hazard if tenants overload outlets with multiple air conditioners, etc. “There are generally federal grants and incentives when doing this, so make sure you speak with a good energy consultant,” says Matwey.
- A building maintenance request system An online system for tenants to enter maintenance requests makes receiving and tracking requests so much easier. It can be accessed by multiple employees, provide status updates, show whether or not a tenant has been contacted and when the work is scheduled, and provide time-stamped backup information in case of a tenant complaint. Some systems also track weather and temperature, so if a tenant complains about inadequate heat, “you can reference the outside temperature to back yourself up,” says Matwey.
- Security cameras “These are so valuable when it comes to any type of robbery or minor accident like a tenant or visitor slipping and falling,” says Matwey. “There is no he said, she said. It's all crystal clear in black and white as to what and when it happened.” No need to hide this building improvement either: People are less likely to misbehave if they think they’re being observed, so make sure you have signs up letting tenants, visitors and vendors know that they are being watched.
For more information directly from landlords who’ve actually done these things, sign up for a free membership on LandlordsNY and head to the confidential online discussion rooms where members compare notes.
“We also have a team of experts—including legal, violations, energy, loan, architecture and expediting—who are available at any time to answer member questions at no charge within four business hours,” says Matwey.
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LandlordsNY is the first social network exclusively for landlords and property managers. New York landlords and managers enjoy a variety of free tools, resources and services including the ability to ask questions of top industry experts, search for and obtain inquiries from qualified vendors, and most importantly, learn from each other. LandlordsNY is completely free to anyone who owns or manages property as a business in New York.