For choice firms like Ashcroft Capital, investing in multifamily property with the right qualifications is an important factor when it comes to the building’s return value. Immersed in the industry for over a decade now, Frank Roessler, founder of Ashcroft Capital and his team have learned to make the distinction between multifamily housing with high potential earnings versus a low-grade unit with a lesser profit potential. These multifamily buildings can be classified as “A”, “B”, “C” and “D”, depending on their marked attributes.
Ashcroft Capital Firm recommends seeking out class “A” or “B” multifamily housing to warrant the best outcomes when investing. Here are the traits distinguishing the two classes:
Class “A”
Class “A” multifamily buildings have been running for a decade and have been substantially renovated over time. These properties are located in Central Business Districts, are well merchandised with landscaping, and offers high-end interior and exterior amenities.
Class “B”
Class “B” multifamily buildings have been built within the last 20 years. The building’s construction is in good form with little delayed maintenance work. The interior and exterior packages may be a little dated, but the overall condition of the building is adequate.
Both classes are located in major markets and have a greater command of interest from lenders. These building types typically have more financing options, lower rates, longer fixed rate terms and amortizations, a lower debt service coverage and are a primary source of collateral.
In addition to these Class “A” and Class “B” traits, Ashcroft Capital’s team further investigates the buildings condition by looking out for additional efforts to attract desirable tenants. These qualities include:
Good Safety Conditions
While location is an important factor to ensure safety, it’s important the building staff and facilities have taken great measure to promote safety on the premises. For example, having a well-lit property in key areas including doorways, hallways and parking lots is something that would appeal to prospective tenants, as well as a foolproof security system to deter unwanted guests or reduce theft.
Cleanliness
Areas such as the parking lot and other common spaces should be well-maintained. This gives a clear indication that the building’s staff and management have a responsibility to its tenants when it comes to proper hygiene and sanitation. These positive attributes that entice tenants can in turn impress investors.
Renovation Upgrades
Tenants are easily enticed by upgraded renovations, even if it’s as simple as a fresh coat of wall paint or swapping out carpets for tile flooring. These changes go a long way in terms of making tenants feel more comfortable and “at home”.
All of these factors combined add value to multifamily properties and are well sought-after by successful investment firms like Ashcroft Capital. When looking for the right multifamily property to invest in, look for these assets to optimize your potential and gain high revenue.
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