For this advice, I wanted to call up Jason Schaller, who is the founder and principal of the Schaller Group, a design, construction, and creative agency based right here in Florida. He frequently partners with Peacock Capital, one of the most active investors in the state of Florida. They've picked up 33 apartment complexes in just the last couple of years. Prior to that, Jason was the VP and Managing Director of McKinley, which is a
$4.5 billion-dollar real estate company where he oversaw all kinds of construction renovations and marketing. He was there for 18 years and was responsible for operations on 12,000 units and 16 million SF of commercial real estate.
I asked Jason to give me the five exterior value add projects that have the greatest return on investment. Here’s what he said:
#1 New Paint: And not just paint for whatever reason because it's a newer paint job. Make it look brand new. Have it pressure cleaned and be purposeful with the color choice. With Peacock Capital, we've come up with a whole paint scheme that we use on every one of our buildings. It helps us to brand our buildings so as we grow and we grow our portfolio you'll start seeing that every single one of our buildings is going to have the same paint colors with maybe a slight variation in the door color. But for the most part, they're all going to look the same so the second you pull onto that property you know that it's one of our buildings.
#2 Landscaping: Trim the trees to about a 15-foot canopy or higher. Get rid of dead or near dead bushes, completely re-mulch all the flower beds, and make sure any grass is cut and edged. Your staff is probably only going to meet half the potential residents that come to the property. The second they pull up in front of the property, you never know when they're going to come by, if it looks like crap on the outside of your building, they're probably never going to call and take a tour. It doesn't matter how beautiful you make that apartment on the inside, and all those pictures you post, bragging about how great it looks on the inside. If it doesn't look good on the outside you just look like you don't care you're not going to maximize the rent. It’s about the power of a first impression. Overall, I try to keep things pretty simple and plant things that are native to Florida and very hardy. I like to set up hardscapes too, stones, sometimes I put some shell mulch because regular mulch washes out all over the place. #3 Lighting: You’ve got to light it up! Our motto when we take over property is it's got to look like Disney World. Try to think like the customer. They get off of work at 5 or 6 o'clock and it's dark already. If they come by after work and they can't see where they're walking, they’re not likely to rent from you. Update the lights by the front doors, and make sure any utility lights are operable. If not call the utility company if you need to have some fixed, or even consider adding more poll lights in areas that might be darker. Residents hate to turn on their porch lights. So the first thing is I’ll have those wired up to come on with a timer or a photocell. LED lights cost nothing to run these days, and the price you'll pay for somebody's safety and comfort at night is an endless return on your investment. Even light up some of the landscaping. Anything you can do so that your building looks just as pretty at night that it as it does during the day. #4 Signage: It is so typical that a newer investor spends all their money fixing up the interiors and they don't consider painting the sign that's been out there forever much less come up with a new name. You can literally go to Kinko's and have them print a board that looks good, with a new logo and name on it. Again, it’s about first impressions. You wouldn’t go on a date wearing a 3-piece suit and not comb your hair.
#5 Embrace Social Media: Every restaurant you go to has yelp reviews or google reviews with photos. They have an Instagram page and a FaceBook page; they have an online presence. People like to interact with people online. Set up social media accounts, and set up a google business page. And absolutely a website is a must. That way when somebody drives by and sees the name of the building and looks it up it takes them directly to where they can call to set up a tour, see pictures, interior, and exterior, contact information, etc.
So curb appeal is very important these days. Most people spend most of their time on their phones, computers, and their iPads. So your first hook is having a nice-looking property, represented with nice professional photos. And if I can throw in just one last bonus, don't worry as much about the interior updates as much as you do everything possible to clean them so they're spotless. It can be old, it can have the old mauve tile, but if you can't spend the money on the interior, you can make it a drastic impression on the exterior which is going to help you improve the whole neighborhood.