One of the questions multifamily owners ask most involves how to increase NOI.
Big Improvements to NOI
Among the biggest wins is to make sure as many of your utilities as possible are individually metered. Submetering accurately divides the master utility usage among all the residents of a community. Submetering has a positive impact on your NOI with your very next bill. It also encourages residents to conserve.
Quality submeters can be installed relatively inexpensively. Third-party multifamily vendors can provide higher quality products at a lower price than your utility provider and will also design and maintain them for you. A quality vendor will provide ROI faster by giving you a high-quality product at a reasonable price through relationships with meter vendors. They also provide consultation on the meters that would work best for your needs and your type of property.
Resident utility billing is then provided, with your vendor issuing bills, collecting payment, and recovering utilities for vacant units.
Savings with Submetering
Water Savings – 15% to 40%
Electricity – 10% to 20%
Gas – 10% to 30% – There is a bigger benefit for cold climates.
Alternatives to Submetering
Some areas allow ratio utility billing systems. These take the master bill and apply a formula to allocate usage among number of residents in a unit and/or square footage and other factors. There is generally no up-front cost and this also provides increased NOI in thirty days and encourages residents to conserve.
Energy Efficient Improvements
While you will have up-front cost for water saving faucets, toilets, and LED bulbs, there may be rebates or incentives to use them. Residents appreciate items that have a lower operational cost.
Maintenance and Curb Appeal
If the property looks clean and tidy, you can command more for rent. Repair what is broken, clean everything, and set an example for a well-maintained property.
Learn what your competition is offering and how your property compares to others in your area. If others offer a bark park, maybe you should too.
Replacing carpet with hard flooring is popular with residents for its easy care. The older the materials in the unit, the less rent you can command. Consider offering existing residents a longer lease for a shiny new unit.
These days there are limitless ideas to generate ancillary income. Coin laundry, rental laundry units, renter’s insurance, garages, covered parking, internet are all services you can provide and profit from. For some examples of what properties are doing, check out our Ancillary Income Webinar.
Challenge Tax Bills
In many areas, property taxes are somewhat arbitrarily derived and increasing quickly. If you don’t want to fight your tax bill yourself, there are often reliable services where they will do this annually on your behalf. Be sure to give them all the pertinent information so they can work in your best interest.
Keep Residents Happy
Turnover can be expensive. If you have a good resident, do your best to make your property an attractive, safe, and comfortable place to live so they are not tempted to relocate.
Of all of these, your biggest savings are likely from submetering utilities.
Get a free consultation today, and increase your NOI in thirty days.