Creating Value in Today’s Value-Add Properties

It’s the goal of many multifamily owners and investors: Buy an apartment community in need of upgrading, perform the needed renovations, boost rents accordingly and drive impressive returns.
But just because apartment companies frequently undertake value-add projects, it doesn’t mean success in these endeavors is easy. On the contrary, a value-add community that attracts residents and produces the targeted returns is the end product of an almost never-ending amount of diligent research and careful strategic planning. 
Below are some of my general tips for success in the value-add arena.

Dig into submarket data. This may seem obvious, but it’s such a critical step that it merits placement here. A successful value-add project depends on a submarket that can support the rents and the investment returns you’re seeking. Once you know what metro you’re looking to invest in, thoroughly research the area’s submarkets to pinpoint where your best investment opportunity may be. What are the submarkets where the population is increasing, employment opportunities are growing and rents are rising? Be prepared to go through all the data sources you need to make this vital, fundamental determination.
Visit a property you’re considering buying. Statistics, spreadsheets and databases are of course indispensable when evaluating a value-add opportunity. But don’t ever underestimate the value of setting foot on a property and seeing it in person. As the great and wise Yogi Berra once said, “You can observe a lot by just watching.”On a personal note, I was recently tempted – because of an extremely hectic s……