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Rising Rental Rates Signal Boon for Value-Add Apartment Investors

Apartment rents have already increased by double digits this year as rising demand, historically low vacancies and a slowdown in redevelopment give owners more pricing power.

CNBC recently predicted rental rates are about to go up again as landlords curb concessions like free rent and discounted rates they felt compelled to offer at the beginning of the pandemic.

At the same time, surging housing prices are driving more people to the rental market, positioning multifamily property owners to reap the benefits. 

This is especially true for investor-owners, like Zevulon, that specialize in turning around underperforming communities. With an effective repositioning strategy, these value-add investments can yield significant returns, often 20% or higher, when the properties are divested.

Strategic repositioning is the key to increasing occupancy and achieving greater pricing power to drive rents above market rates. Nobody wants to pay more unless they receive more. To retain tenants and justify raising rents, an underperforming apartment community must be improved. 

A Strategic Repositioning Plan Adds Value

At Zevulon Capital, once a distressed property is acquired, we develop a customized business plan to add value to the asset and the investment. While no two plans are identical, most properties require capital improvements – these can involve rebranding, slight renovations and upgrades or extensive rehabilitation. A property management overhaul may also be necessary to enhance operational performance. 

Improving Property Management is Key

We know firsthand how inadequate management can speed up a property’s physical deterioration, leading to vacancy and unhappy renters. Additionally, poorly governed properties lose money because maintenance costs are higher and occupancy rates are lower. 

Our best-in-class property management partner, RADCO Residential, is installed in each of our communities to swiftly identify areas of improvement and develop a course correction plan that optimizes operations, leasing and property management. 

Investing in a Property Means Investing in a Community

Our investment approach extends beyond dollars and cents. When you invest in a Zevulon Capital property, you’re contributing to the well-being of people who live in the community. 

While we are dedicated to achieving superior results for investors and financial partners, our mission is to enhance the living environment for residents.

Learn more about our investment strategy and how we operate or reach out to us with questions.