Posted by IKO Community Management on November 16, 2017 at 9:00 AM
All communities can benefit from amenity upgrades.
What is an amenity?
According to Investopedia, the world's leading online source for financial education, amenities are "benefits of a property whose existence increase the value or desirability of that property. An amenity can be either tangible, such as a [community] pool or gym, or intangible, such as proximity to a local school or supermarket."
How do amenities affect property value?
By making improvements to a condominium or apartment complex or HOA community, property managers and landlords can increase the price that they sell or rent a piece of property for. By constructing in a desirable area, land developers can increase the cost of the property.
What are the most popular amenities?
The most desirable amenities vary from state to state, but the old adage in real estate reigns true. Location, location, location, an intangible amenity, matters most in resale and property values.
Distance to everyday necessities is becoming a more sought-after aspect of buying and renting. The new generation of millennial buyers is especially raising the residential real estate stakes by requesting walkability to grocery stores, work, school, and outdoor activities like biking trails.
"Homeowners want to be able to walk or bike to local eateries, bars, grocery stores, banking, and more," says Brad Pauly, a real estate professional with Pauly & Presley Realty in Austin, Texas, to Trulia, a mobile and online residential real estate resource.
"If a new restaurant opens in a desirable, walkable neighborhood, that could increase the value of that property," especially in highly walkable areas like San Francisco and New York City.
While a high walking score matters for most buyers and renters, tangible amenities haven't gone too far down the ranks. Many HOA communities still offer fitness centers and organized groups like HOA subcommittees and community events planners, because a sense of togetherness remains the most desirable aspect of a neighborhood.
Other common tangible amenities include community pools, recycling and trash removal, inclement weather service, mature trees, Internet connectivity, playgrounds and tot lots, rentable outdoor spaces, a clubhouse, and more.
Couple high walkability with tangible, modern amenities, and landlords, property managers, and developers have a booster for property values.
What happens to property values without amenities?
A pair of case studies featured in The National Apartment Association's report, Adding Value in the Age of Amenities Wars support that spending money to upgrade older properties reaps benefits.
As reported by Property Management Insider, "The Village at West Irving [in Irving, Texas] focused on a combination of in-unit and common-area upgrades at a total cost of $239,000. Units received ceiling fans, vinyl floors, high-end kitchen appliances, lighting, plumbing or electrical improvements, community-wide Wi-Fi," and an upgraded community pool.
Managed by Elmstone Group Property Management, LLC, The Village at West Irving boosted occupancy from 84 percent to 96 percent and netted a monthly $51 per-unit increase in rent. The total return net was 39 percent.
Closer to IKO Community Management in Olney, Maryland, 18-year-old Sanger Place in Lorton, Virginia, improved the clubhouse, fitness center, and playground/play area and added reserved parking. Also, 16 of the 182 units located just outside of Washington, D.C., were fully renovated.
After the upgrades, occupancy rose 4 percent and unit rent jumped to $55 per month. The total return net was 37 percent.
With case studies and a variety of options for improvements, amenities are no hidden secret when it comes to increasing property values in your community. To see how IKO Community Management handles amenity maintenance, feel free to click on the button below to watch our popular video: