It is widely known that the top income source of multifamily investments is rental income. Without the ability to achieve high occupancy and rent growth, many investment opportunities would not otherwise make sense. Aside from rent collections, multiple streams of income only helps the valuation of the property as the investment team positions it for a sale. Below are just a few great additional income sources that investors can consider when evaluating an apartment investment opportunity.

Storage

When there is space to add on storage facilities, this can be a top value add opportunity. The tenant base often may not have sufficient space within their living quarters and will happily pay extra to have additional storage onsite versus at another location. Because people do not easily get rid of things, it is likely that storage income continues while the tenant remains a resident at the property. Unlike rental income, storage facilities do not suffer the same wear and tear that residential quarters do, which make storage income an ideal additional income source.

Laundry Facilities

Depending on the class of apartment and living preferences in the local area, laundry facilities may be a feasible value-add feature. You are more likely to see this as a potential income source for C and B class properties, whereas Class A and new developments are more likely to be luxury living where renters expect to have a washer and dryer in the units. Understand the preferences and expectations of the market.

Pet Fees

Pet fees are a small additional income source, albeit more of an indirect reimbursement for the hassle and premature wear and tear that the unit is likely to receive. Usually, pet fees are one time or annual charges to the resident.

Reserved Parking or Garages

Especially in high-populated communities where there is not often sufficient Parker, residents may be used to struggling to find a parking spot near their residence. In these situations, they are likely to appreciate having a dedicated parking spot close by and would happily pay for the service.

These are just a few additional income sources that syndicators consider when acquiring a new multifamily asset. Get to know your sponsor and find out his or her experience with adding value through additional income sources.