Multifamily rental properties are a hot commodity in Los Angeles, especially for investors looking to build a real estate legacy. But succeeding in the multifamily market is more complicated than simply buying a building and filling the units.
Los Angeles rentals are competitive, and the best tenants tend to gravitate toward properties that offer them the lifestyle and amenities they desire. Properties that go above and beyond to accommodate their ideal renters will inevitably be more profitable than the rest.
But what makes one property more desirable than another? We could list the top ten or 20 amenities Angelinos want, but it’s really about the people, the vibe, and that “ahhh” feeling you get when you’re home.
All the amenities in the world can’t compete with an excellent property management team, and if you’re looking for a way to maximize the return on your investment (ROI), engaging a qualified property manager is one of the best ways to do it.
Multifamily Property Investments That Deliver the Best ROI
Investing in your property is an excellent way to increase its value and drive ROI, but it’s critical to invest in the right things.
Location and amenities are important, but they don’t always translate to profits. Even if the property’s features look good on paper, poor maintenance and spotty management lead to high turnover rates and will end up costing you more in break-fix repairs and tenant acquisition.
Good property management, on the other hand, can help to preserve your investment, driving superior ROI through the things managers do each day.
Property managers are more than just rent collectors; they are qualified specialists well-versed in Los Angeles fair housing laws and other tenancy ordinances, which reduces the risk of disputes and legal action. They optimize day-to-day operations, handle work orders, repairs, and renovations, enhance tenant satisfaction, and achieve lower operating costs through proactive and preventive maintenance.
You’ll worry less about operations and will be able to focus on growing your portfolio, confident that your investment is not just protected, but growing in value.
Of course, that’s not to say that good people are the only things that drive ROI. Location and curb appeal matter, so let’s look at a few key points that could—or should—influence your investment decisions.
Best Locations in Los Angeles for Multifamily Rental Investment
LA has hundreds of distinct neighborhoods, each with its own color, flavor, and vibe.
The West Side is where high earners gravitate to. Renter expectations are high, and property values tend to match. Some of the most popular areas for multifamily living include:
- Santa Monica
- Venice
- Marina del Rey
- Playa del Rey
- Westwood Village
- Brentwood
- Pacific Palisades
Hollywood, Silverlake, Atwater, and Los Feliz are trendy, and here’s where you’ll find many landmark buildings.
Top rental neighborhoods in the San Fernando Valley include Burbank, Studio City, Tarzana, Sherman Oaks, Encino, and North Hollywood. Many renters gravitate to these areas because rents are more reasonable.
Hancock Park, Larchmont Village, and Mid-Wilshire offer quiet, upscale neighborhoods, while Melrose is famous for its street culture and eclectic blend of street art, vintage shops, and lively atmosphere.
Pasadena, Altadena, Glendale, La Canada, and Montrose are hugely popular with families, offering a blend of small-town quaintness and suburban living at its best.
But no matter where you choose to invest, quality rentals in LA are always in high demand. You certainly won’t have a problem attracting prospective tenants; the challenge is to attract the right tenants, and that’s where a little extra investment pays off.
High-ROI Multifamily Property Investments
If you’re considering making upgrades to your multifamily property, proceed with your ideal tenant in mind.
The real value in multifamily rentals comes from long-term tenants. If you can satisfy their wish list, you won’t have much trouble keeping your units occupied.
Here are a few top features that will help your property stand out and deliver solid long-term ROI.
Energy-efficiency
New high-efficiency HVAC systems help to reduce energy costs year-round, while quality doors and windows provide better insulation and soundproofing. Installing solar panels can lower energy bills for renters, making the building more attractive to prospective tenants.
EV charging stations
Electric and hybrid vehicle ownership is on the rise (source), and you can rest assured that more than a few of your tenants will appreciate a charging station on site.
Premium parking solutions
Premium parking amenities include underground, covered, or secured parking; reserved parking spaces; valet services; enhanced CCTV monitoring; and controlled access, such as license plate recognition.
Upgraded kitchens and bathrooms
Kitchen and bathroom upgrades typically offer the best ROI for single-family homes (source), and it’s no different for multifamily buildings. Even older buildings will shine with brand new high-efficiency appliances, modern fixtures, countertops, and cabinetry.
Consider rain showerheads, smart mirrors in the bathrooms, steam showers, or jet tubs for an at-home spa experience.
Modernized units
In-unit connected technology, such as smart thermostats, lighting, doorbells, keyless entry, and connected appliances, is attractive to today’s renters. As many people work from home at least part of the time, reliable, high-speed internet is a must.
Upgraded LED lighting systems
LED lighting uses 90% less energy than conventional lighting. It’s also more versatile, and many types of bulbs can be controlled and configured with a smartphone app. Additionally, you may be eligible for significant rebates and incentives.
Replace carpeting with quality flooring
High-quality laminate or hardwood flooring is more durable, sustainable, and hygienic than carpeting. When you consider the cost of replacing or cleaning carpet multiple times, the investment will pay for itself in no time. Be aware, however, that units above the first floor (excluding non-habitable spaces like garages) must comply with both airborne (STC) and impact (IIC) sound insulation standards (Los Angeles County Building Code).
Common area upgrades
Well-maintained pools, spas, and outdoor spaces attract high-quality tenants as they won’t have to leave the property to enjoy the things they love to do. Fitness centers equipped with modern equipment and amenities, as well as on-site wellness centers and lounges, offer ample options for self-care, socializing, and relaxation.
Maximize Multifamily ROI Strategies with Your Ideal Tenants in Mind
Achieving ROI in multifamily real estate is within reach. Once you’ve chosen a location, invest in long-term value that goes beyond amenities and helps to preserve your legacy. Speak to the property management professionals at Belwood to learn how we can help.
