Boosting Rent (and Therefore Value) for Apartments Through Design and Improvements
person
A.J. Johnson
today
02/14/2016
Boosting Rent (and Therefore Value) for Apartments Through Design and Improvements
Whether purchasing or renting, the nation’s 75 million Millennials have strong opinions about what they expect in terms of housing. This age group (mid-20s to mid-3os) constitutes a major percentage of the rental market today. Developers (when developing new properties or renovating existing) and owners engaged in upgrades should be informed by a recent Consumer Reports survey of 1,573 Millennials about what they most want in a home. While the survey dealt mostly with preferences relating to homeownership, the results are also applicable to the features most desired in apartments, including the moderate income affordables, such as Low-Income Housing Tax Credit (LIHTC) developments.
Kitchens
As noted by Consumer Reports, "The Kitchen is Still King." A "modern/updated kitchen" was the top desired feature for more than a third of those surveyed. Appliances, countertops, and flooring are the key components of a top notch kitchen. The most desirable elements include:
Stainless steel appliances, which give an upscale feel to any kitchen. A recent development is black stainless steel, which does not show fingerprints as much as the traditional stainless steel.
Countertops - While granite and marble remain the standard of desirability, these materials are now being challenged by quartz. This material is more heat and scratch resistant and requires less upkeep. The price ranges from $40 to $100 per square foot installed, but because it is still relatively unique, quartz countertops can significantly enhance marketability.
Floor Plans
Developers in the planning stages of a new property are well advised to create an "open floor plan with flexible living space," second only to kitchens on the list of desired features. While many of the features in this category are limited to single family structures, designing the second or third bedroom as a dedicated office will be attractive to the growing number of people who work from home. When designing spaces intended for uses other than sleeping, don’t forget the outlets for computers and printers. Believe it or not, one of the main complaints about a lot of new apartments is the lack of strategically located outlets. The new buzzword in this area is "flex rooms." Such spaces can serve as guest rooms, game rooms, exercise rooms, or a child study room.
Laundry Rooms
Dedicated laundry rooms are a virtual must for the new generation of renters. They are no longer accepting the traditional on-site laundry and even the in-unit washer/dryer hookup no longer invites enthusiasm. Matching washer/dryer sets can now fit into almost any space and should be part of any new development.
Energy Efficiency
If renters pay utilities, lower energy costs are a major selling point. According to a 2015 survey by the National Association of Home Builders (NAHB), energy efficiency was second only to a "safe community" in the elements of housing that would most influence a purchase decision. To some degree, the same is likely true for a rental decision.
The more extreme the weather, the higher the value of energy efficiency. Adequate insulation, windows with low-E coatings, and efficient water heaters lead the way in this category. When it comes to windows, Energy Star certified windows can lower bills by 7 to 15%. Owners of LIHTC properties should be especially diligent with regard to energy savings since every dollar by which a utility allowance is reduced will be another dollar in collected rent.
Stress Free Living
Hard to maintain countertops and wall-to-wall carpet used to be symbols of luxury, but virtually all generations now look at them as extra work. Also, the more recently the HVAC systems have been updated, the more marketable an apartment is. It is not enough to just update systems - to the extent possible, upgrades should be made with high quality equipment, such as American Standard and Trane. While more expensive upfront, they pay for themselves over the long-haul.
More carpets are being replaced with long-wearing hardwood flooring with a durable factory finish. Engineered wood flooring, which uses a thin veneer of real wood or bamboo over structural plywood, will not wear as well as solid wood, but it looks the same and costs less making it a better choice for affordable apartments. They can also enable a 3 to 5% increase in rents.
Build for "Aging in Place"
By 2040, there will be 80 million seniors (21% of the population). Eliminating staircases, walker unfriendly doorways and slippery step-in baths and showers benefit people of all ages, and will allow people to remain longer in their homes. Major design elements for seniors include:
Walk-in showers: Curbless showers eliminate the threshold between the shower and surrounding bathroom and are not only wheelchair accessible, but are sleek and streamlined.
Ground floor master bedrooms - developers of townhomes and other two story residential structures should always place the master bedroom on the ground floor. This is one of the most desired features among baby boomers (those born from 1946 to 1964).
Comfort Height Toilets - these toilets are a few inches taller, which makes getting on and off easier. These can be installed in any unit (not just those for seniors), and will not have a negative impact on marketability.
Paint
When marketing apartments for rent, use neutral color schemes. Whites and off-whites remain the top selling interior colors and will appeal to most renters - at least when making the initial decision to rent. Once rented, don’t be afraid to let residents make the unit their own, by choosing the color of their apartment at lease renewal. Just be sure it is a color that can be covered with the neutral colored paint when they move. Also, when painting, use high quality paints - both for indoor and outdoor painting.
Curb Appeal
Decks, patios, seating areas and grilling spaces all add to the outdoor appeal of an apartment community. Pools are no longer the attraction they once were, and are expensive to maintain. Gas fire pits surrounded by seating are much more highly favored today.
Curb appeal is the single most important element in the appearance of an apartment community. Trimming overgrown shrubs, keeping the façade in good repair and painting front doors on a regular schedule can keep the property looking good and not deter drive-by prospects. Keeping property signage fresh and the siding in good repair are also important steps in the process. Also, replacing turf grass with native ground covers or pea gravel (not for family properties) can reduce maintenance cost while adding visual interest.
Technology
While all potential residents (but Millennials in particular) want technology in their homes, be careful. Technology can become outdated almost as soon as it is installed. Wireless Internet is a must, and programmable thermostats (such as Nest) can give the impression of a high-tech apartment.
In summary, apartment owners and developers can learn from the homeownership industry - especially with regard to the amenities that are coveted by today’s renters. More and more, the homes sought by renters mirror those of homeowners, and the amenity packages need to be similar. Kitchens, baths, finishes and technology can give an edge to apartment owners who stay up-to-date with the wishes of their customers.