Today we will talk about what to do with the Leasing Offices as part of our series on top 8 things to inspect before buying apartments. Here is the list:
- Inspect every unit
- Walk all drive and parkways
- Inspect all exteriors
- Inspect all mechanical facilities
- Leasing and business offices
- Common areas
- Maintenance shops
- Pool and pool systems
Leasing and Business Offices: A new resident is going to spend much of their time before they move in to their new apartment home in the business and leasing office. These spaces must be of the highest quality and should represent the feel and look of the apartment homes. There are two schools of thought when it comes to the leasing and business offices. One is to have a model unit dedicated to show future residents. This unit should have high-end appliances, countertops, cabinets, flooring, and furniture. The second is to have as part of the the leasing office and a model area and kitchen to show what the units look like. Having the leasing office look like a model unit is typical in complexes with fewer units in the complex. The revenue in these complexes cannot handle one or two model units. The purpose of the model units or areas are to have the resident feel at home and desire to become part of the community.
Examples during due diligence: Here are examples of both schools of thought mentioned above.
Large complex: A property was large enough to have two different models: a one bedroom model and a two bedroom model. These models looked mostly like the apartments. During the due diligence phase,the owner had two idea on what to do with the model homes. The first idea was to completely remodel the kitchen with high-end appliances, countertops, cabinets, flooring, lighting, and plumbing fixtures. The cost to do this would be about $35,000. The second idea was to only do a face lift to the kitchen: upgrade the appliances to the same kind going in the units, repaint the cabinets, put in new lights, and update the plumbing fixtures. The cost for this was about $18,000. The ownership team talked about their options and to receive the highest ROI, the team went with the first idea. The remodel was completed in two months and it increased the traffic to the leasing office by 20% from the previous months.
Small complex: The leasing kitchen was the model kitchen. The only recommendation during due diligence given for a small property, was to upgrade the kitchen to match the remodeled kitchen in the units. Just the cabinets and flooring needed to be replaced at an estimated cost of $4,700. The end result allowed the management team to show future residents exactly what they were going to have in their renovated apartment home.