Adding property value through curb appeal, leaving money on the table

Over the last 10 years or so that I have been doing apartment buildings, the properties usually fall into one of two categories, pride of ownership and not.  Generally speaking when a building looks crappy on the outside, it is also crappy inside, and the tenant profile usually fits the project.  Enhancing curb appeal is to me the best money you can spend on a building, even more so than suite renovations. Why? Well it is the first thing you see when you drive/walk by, the first thing prospective tenants see, as well as possible buyers of your property will immediately link the look of the project to the value, and the appearance will attract the best quality tenants who are searching for a place to live.  Often these improvements cost very little, nice landscaping, paint, and a sign can drastically change the look for a few hundred or a couple thousand dollars.  We are in the process of some major signage improvements to our Beaumont property simply because it is a long term hold and we wish to attract and retain the best quality tenant we can find for top dollar.  A project with poor curb appeal shows me the darker side of making money in real estate, cutting expenses AKA slum lording which is bad for the community, the neighbours, and tenants.

The financial argument can be made with this simple example. Say you own a building beside your neighbour, same suite mix, same appearance, etc.  Lets say you spend $10,000 on curb appeal.  If you have a 20 suite building and because you look better than your neighbour you are able to charge an extra $10 per suite your building is now worth $40,000 more than your neighbour! $10 x 20 suites x 12 months is $2400 per year, capitalized at 6%.  This simple financial equation escapes many people and it is easily argued that you must make these improvements from a financial perspective. Furthermore in times with low vacancies, the ugly buildings will be full with poor tenants and slightly lower rents, when vacancies rise the nicer projects are best positioned to retain their existing tenants through tough times while the latter is often forced, too late, to upgrade their project or have an empty building.

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    Mansard Terrace

    710 8th Street East, Saskatoon Saskatchewan

    Will purchase October 2017 $1,470,000 with a 65% loan @3.25% for 5 years

    Cash invested $630,000

    ROI: Please contact for more information

    Sold for: Subscription filled - Currently Active

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    Marsin Apartments

    2440 Louise Avenue, Saskatoon Saskatchewan

    Will purchase October 2016 $1,200,000 with a 75% loan @3% for 5 years

    Cash invested $420,000

    ROI: Please contact for more info

    Sold for: Currently Active

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  • chaben

    Chaben Place

    3609 Chaben Place, Saskatoon Saskatchewan

    Purchase March 2016 for $2,710,000 with 75% loan at 3.4% for 5 years

    Cash invested  $840,000

    8 investors to share in the profit share and equity

     

    ROI: Please contact for more info

    Sold for: Currently Active

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  • beaumont-place

    Beaumont Place

    4902 50th Avenue Beaumont Alberta

    Purchased December 2014  $2,900,000 with 75% loan at 3.55% for 3 years

    Appraised for  $3,050,000 (October 2014 appraisal)

    Current Value (July 2016) $3,700,000

    Cash invested  $900,000

    ROI: Please contact for more info

    Sold for: Currently Active

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