One misnomer that people have about New York City is that rent for an apartment is expensive. That’s not necessarily so. According to Rent Jungle.Com, the average rent for a one-bedroom apartment in New York is more than $2800. Rent for a two bedroom is more than $3600. Of course, whether one thinks those numbers are high or low are relative. Still, compared to other large cities’ rental markets, it doesn’t sound too bad.
A reason why the cost doesn’t sound excessive is that the rent in the New York City rental market is subject to rent control and rent stabilization. Without getting into the nuts and bolts, let’s just say that investors in rental property may be looking for ways to make more money from their investment. I certainly was.
I’ve learned that you can increase the potential revenue of a property two ways – increasing the value of the acreage or creating value for the dead areas of the building.
Seven ways to do this include:
- Market the dead space. Ways to achieve this is to sell billboard space on the roof, place storage lockers in the basement and offer them to tenants for a modest cost, set up a display board featuring ads for local merchants in the laundry room or lobby, convert the roof into a patio or deck areas and rent them out or add a modest fee to the rent for tenants who want to use them, sell or lease the air over your building, convert a storage closet or dead space into a small office for rent, and consider renting idle land for storage of machinery or other equipment to local companies.
- Paint the walls to freshen the look of the building. Use muted colors so that tenants can easily match furniture with it.
- Lay carpet or carpet tiles over floors. This is a good way to deal with floors that just plain look bad or need some major refurbishing.
- Stage the rooms of a sample apartment. Sometimes prospective tenants cannot envision how great a room can look without furniture.
- Maintain the grounds around the building. Have someone available to clean the lawns of discarded paper; remove weeds; paint or clean the mailboxes, fixtures, and gates.
- Keep lobby areas, hallways, laundry rooms, parking lots, apartments, and common areas clean. Tenants like to see that you’re serious about the appearance of the property.
- Create a website and advertise online. The website is an efficient way to present the property to prospective tenants whether they live in New York or plan to move here. You can also list of web real estate catalog sites like rentals.com, craigslist.org.mynewplace.com, and hotpads.com.
Increasing the value of the property by sprucing things up is cost effective and the manager of the site can perform many of the projects. If the property looks good, then, whether the apartment is under rent control of stabilization, you’ll have proof that the value of the property has been increased and you may be permitted a rent bump from the city.
For example, the manager of my building has a lot of experience repairing things and preparing empty units for new tenants. He knows how to paint and pull up old and lay new carpet. The job of keeping the property grounds, laundry room and lobby areas clean is not a difficult one either. The manager’s son does that. My wife fancies herself as somewhat of an interior designer, so I assigned her to stage an empty apartment. The furniture was rented from a company. Part of our agreement for them to provide the furniture was for us to promote them to prospective tenants who didn’t own furniture.
Creating value to the site is something that many landowners may not consider. However, when you think about it the ideas discussed here and more ideas you may have of your own can turn dead areas into money generators.
You will have to do some homework to find out more about air rights. Technically speaking, we are talking about the area directly above your building. It’s become a great way for building owners to make a pile of money because the law allows you to sell or rent the space. Land for constructing is very limited in New York City. As a result, developers are looking for ways to build up. If they have a project to develop they may just come knocking at your door to buy or rent that empty space above your building. If the money making potential of this phenomenon intrigues you it might be a good idea to let it be known you are interested in discussing air rights with developers.
You can contact billboard-advertising companies if you are willing to consider a billboard on your roof.
These examples show that there are a lot of creative ways to make more money off your commercial buildings, but it means that you may have to think outside the box.