Unlocking Multifamily Property Value: Water Conservation as a Strategic Investment
In a real estate market where multifamily property prices are soaring, investors are constantly exploring innovative ways to maximize property value and returns. While some markets have witnessed significant renovations and rent hikes, there's another avenue for enhancing property value—expense reduction. Notably, many Class B/C properties under our care have owners who cover a portion of the water bills, making water conservation strategies even more critical, especially for all-bills-paid properties.
Water Conservation: A Value-Enhancing Solution
SAS Water Conservation is a specialized firm adept at analyzing water consumption and identifying cost-saving opportunities. Their approach involves a meticulous assessment of your property's fixtures, including toilets, showerheads, and aerators. They replace existing toilets with water-efficient alternatives, upgrade showerheads to low-flow models, replace supply lines, and update aerators in both kitchen and bathroom faucets. Even angle stops and base plates are addressed as part of their comprehensive services.
Here are the key highlights from a recent proposal we received for a property currently in our marketing portfolio:
A modest investment of just $275 per unit can result in remarkable water bill savings, reducing expenses by approximately 36%.
This property is poised to save over $15,000 in annual expenses, leading to a corresponding increase in Net Operating Income (NOI).
The breakeven period for recouping the initial investment is a mere 15 months.
At a 7% cap rate, every dollar saved annually equates to over $14 in additional property value when the time comes to sell.
Importantly, many lenders offer "green" discounts, which can potentially lead to lower interest rates when these water conservation strategies are put into practice.
If you are contemplating the adoption of this value-add strategy to bolster your property's financial performance, please reach out to us. We can connect you with a reputable company specializing in water conservation for multifamily properties. Moreover, if you are considering selling your property, we'd be delighted to provide a comprehensive market valuation, complete with relevant comps and underwriting, giving you a precise understanding of your property's potential in today's market.
Your multifamily property harbors untapped value—let's collaborate to unlock its full potential.