Savvy value-add real estate investors rebrand their properties to boost occupancy levels, improve tenant quality of life, and maximize return to investors.
Value-add multifamily real estate investors seek underperforming assets that provide an opportunity to acquire the property below cost and implement strategic capital and operational improvements to drive performance. However, these older or mismanaged assets may come with poor reputations or out-of-date branding. To remedy this, multifamily real estate investors use rebranding strategies to compete with nearby apartment complexes and generate outsized returns.
What is Rebranding?
Rebranding a property is simply the process of making changes to an already-established brand to improve its identity and differentiate the asset from market competitors. Rebranding provides a way to better connect with potential renters and is often done to discontinue or change an asset’s existing identity if it suffers from negative publicity.
Not all rebranding projects are the same. Sometimes new signage and an updated website are all that’s needed to compete with neighboring properties and garner higher rents. Other times, significant effort is required to alter the perception of a multifamily asset and can include new landscaping, upgraded amenities, and in-unit renovations. Regardless of the scope of the rebranding effort, one thing is clear: a refreshed brand can elevate an asset’s perception and lead to higher occupancy rates, increased rents, and happier tenants. But where does an investor begin?
Start from the Outside
Perception is everything. Therefore, it’s best to begin rebranding with a focus on what residents and potential renters see – the outside. When an asset’s exterior is poorly maintained or looks outdated, prospects assume that the apartment’s interior is also lacking in comparison to other properties in the area.
Renaming a multifamily complex, installing a new monument sign, repaving the parking lot, or applying a fresh coat of paint can signal that there’s a new owner who is interested in creating a better experience for residents. These improvements say, “We’re willing to spend money to improve your quality of life.”
Today’s largest renter demographic is millennials, and they are very much influenced by amenities. If an asset is in an area with a large millennial population, you may appeal to them by updating the pool area, building a rec room, or developing a dog park. These types of improvements can differentiate your property from competitors, achieving higher rents and occupancy rates and, therefore, lead to higher revenue growth.
Then Go Inside
When renters see a modernized exterior, they will expect a property’s interior to be updated, as well. If you have changed the property’s exterior signage and colors during a rebrand, replacing old common area furnishings and artwork with pieces that match the new brand identity will carry exterior improvements indoors.
Improving the interior of an apartment or the property’s foyer can go a long way with residents and prospective tenants. Unit improvements don’t have to be complete renovations. Updates can include changing wall colors, refacing kitchen cabinets, or swapping outdated fixtures for modern ones. New residents want a modern apartment that they feel good about coming home to.
When older properties are acquired, a larger scale, interior renovation may be needed to rebrand the multifamily property. Investors should consider installing hardwood floors or outfitting an existing gym facility with new equipment to attract higher-paying renters who are willing to spend more for access to these features and amenities.
Amplify the Asset’s Online Profile
A property’s online presence is a key component of attracting new renters as more and more people sign leases sight unseen. Therefore, quality virtual tours of apartment units are becoming just as important as in-unit photos. Some renters prefer video tours because they are interactive and show what a property looks like from different angles, allowing them to easily envision what it would be like to live in the unit. Does the apartment get enough sunlight? Will my living room furniture fit in this space? Virtual tours can answer these questions more accurately than static online photos.
Apartment seekers will often read property reviews after watching a virtual tour. If you are employing a value-add strategy, it’s likely that a newly acquired multifamily property’s reputation may need improvement on these listing websites. During a rebrand, address both positive and negative online reviews with professional and helpful responses. This will reinstate a positive rapport between tenants and ownership, showcase your commitment to improving a property, and substantiate rent increases when you achieve higher ratings on apartment hunting sites.
When rebranding your multifamily property online, consistency is vital. According to Resident360, ninety percent of consumers will expect your brand and their experience with your brand to be consistent across all platforms. That means, if you choose to rebrand a multifamily property, your brand’s new identity should be consistent both in-person and online. All aspects of the new brand will need to be updated through the asset’s website, social media accounts, and virtual marketing materials.
Conclusion
Whether you have a newly acquired multifamily real estate property or are looking to improve the performance of an existing asset, rebranding can alter prospective tenants’ perceptions and, potentially, drive revenue growth for the asset. For the best results, take an integrated approach to rebranding by overhauling your asset’s online presence in addition to making interior and exterior improvements to maximize interest from new renters, tenant quality of life, the property’s profit, and return to investors.