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Value add is the process of increasing the value of an investment property through fixes and enhances. A value-added property in multifamily real estate undergoes physical and/or operational enhancements in order to reach its full potential. A property is purchased and later sold in much better condition. Through multifamily real estate, there is a process of acquiring a property, adding value, refinancing, holding, and then selling. Through renovations and rebranding, the quality and value of a property increases.
Through renovations, a property is able to reach its full potential, forcing its appreciation. Renovations in multifamily real estate can look like so many things from construction to amenities. Construction can vary from interior upgrades to exterior ones such as light fixtures, sinks, flooring, walls, counters, plumbing; these are all a part of the renovation process. Amenities not only increase the value of a property which we investors benefit from, but it also creates a better and safer living experience for the tenants. Amenities can include a gym, washers and dryers in apartments, assigned parking spots, wifi, pools, dishwashers, security, etc. Some amenities may not even yield any returns, for example the implementation of a security system- but the goal is simply to provide tenants a safe place to live.
Rebranding is almost necessary to make a property stand out. Once property is under new ownership, rebranding allows owners to bring dead property back to life; and it starts from the inside out. Rebranding is a complex process and it takes a village. However, it is worth the money, time, and effort. The branding of a property is the first thing renters will notice and it sets the tone for what kind of community they can expect to live in. Rebranding is not only to just captivate the eyes of a possible future renter, but it also makes a property set apart from its competitors in the market. Rebranding allows for adaptation to occur. So as times change, necessities change, areas change, a property can keep up and thrive.
So, why should value add in multifamily real estate matter to you? Well, value add allows for:
- Increase in cash flow
- Easier finance
- Ability to earn high returns
- More options for forced appreciation
- Purchase and refinance options
- Easier property management
- A way to quickly grow your portfolio
Investing in multifamily real estate offers one of the best ways for you to build wealth. At Prime Investment, we value, highly uphold, and strive for financial freedom, fully passive income, and peace of mind. Our interests are highly aligned with our investor’s interests – when the investment is a huge success we all benefit together. And thanks to value add, an assets cash flow will start to rise throughout its hold time which creates an increase in cash flow for investors. Value add is a timeless concept. It requires a lot of hard work, mental agility, and strategic planning/action. When successful, we reap the harvest of it. It is worth the effort. Interested in becoming our next investor? Overcome entry-barriers and invest in real estate with our expertise. It is one investment with many benefits. Start your passive income today.
To learn more about how you can begin investing in multifamily real estate, apply to join the Prime Investments Investor Club now.