Property managers are vying for tenants. With amenity-rich apartments and rising rents, property managers need to weigh the pros and cons of luxury amenities.
Property Management Insider wrote an article, 3 Ways to Drive Revenue from Apartment Amenities," and dives into the questions to ask before proposing an amenity to your building.
Here is an excerpt from the article:
If companies make one wrong assumption, millions of dollars of investment becomes a wasted effort. In multifamily, no investment is perhaps more misunderstood than the luxury apartment amenity.
Popular opinion tells property managers that the market value of an outdoor fitness center or luxury swimming pool will offset the cost of building. But months later, those same amenity-rich apartments are sitting on the market waiting for tenants to show up. Data scientist Rich Hughes says the math is simple. The more amenities, the higher the price tag. $1,400 a month plus utilities ultimately pays for a 1 bedroom, 1 bath apartment, no matter how many spruced-up indoor golf courses or outdoor grilling stations it has.
Properties so often miss the mark when it comes to determining an amenity’s market value, so how do managers hedge their bets and make sure their amenities pay off? Here are three ways to make sure you invest in the right amenities and avoid the wrong ones.