Aging properties can realize new financial gains. Multifamily property investors can recoup ROI and quickly see an uptick in NOI by making their property more attractive in a tough competitive rental market. Investors can benefit from reduced turnover, expanded revenue generating options, low future maintenance or need for upgrade expenses, and improved property values following a fiber upgrade.
Regardless of the telecom infrastructure in place at your apartment property—cable, cell service, or DSL—fiber will stand out as an advanced internet connectivity option in terms of speed, bandwidth, reliability, and latency.
Future-proof fiber-to-the-unit (FTTU) provides advantages to residents. Also from a competitive standpoint, FTTU overbuild installation offers the same quality internet as new construction, making it a smart investment for now—and the future.
Financial reasons to upgrade to fiber
There are two ways to increase NOI: cut operating costs or improve revenue. Upgrading to fiber can pull both these levers. Fiber can reduce renter turnover and shorten vacancies—but it can also increase revenues. If you have your sights set on improving your NOI and property value, here are four reasons to upgrade now.
1. Turnover and vacancies are costly
The cost of a vacancy is a function of time. The longer an apartment is empty, the more it costs the property. RentCafe’s Market Competitivity Report found that it now takes 41 days to fill an apartment vacancy.
By delivering fiber directly to apartments renters may find your property attractive by keeping up with their current and future demands. With remote work, streaming services, and smart-home technologies driving unprecedented demand for fast reliable internet, FTTU is considered valued highly and future proof.
2. Revenue can grow
First, property owners can increase their rent. According to the National Multifamily Housing Council 2022 Renter Preferences Survey Report, more than three quarters of multifamily renters are willing to pay a premium in rent if high-speed internet is available.
Second, property managers can sign a bulk contract with a provider that gives them a discount over the going market monthly internet rate. Some providers, like Quantum Fiber, will lock that low rate for several years. As a result, properties can generate incremental income by charging residents the market price and pocketing the difference—and even increase it to align with current market rates as they rise.
Third, unlike planning for a roof project or unit renovation and the requisite capital included in your budget, typically most of the design work and installation expense can be covered by your Internet Service Provider.
3. Low maintenance or need for further upgrades
Fiber is frequently called “future proof,” because it’s a onetime investment in the property’s infrastructure, and then it’s done. The fiber lines are designed to last.
Also, fiber can handle todays and future connectivity technologies. Fiber has untapped bandwidth capacity to support much higher speeds and data transfer rates than what is needed today. Future smart products will require even more speed, reliability, and bandwidth. Your fiber infrastructure will be ready.
4. Property values rise upon installing fiber
Your cap rate also takes into consideration the market value of an MDU property as well as its NOI (cap rate is calculated by dividing NOI by current property value).
A recent FBA study showed that having access to fiber broadband increases rental and property values in MDUs by 8% and 2.8% respectively. That alone can make an investment in a fiber upgrade worth it from a portfolio ROI perspective.
Fiber is the future
Today’s renters are demanding it. Fortunately, amenities that help drive value in a multifamily property, like fiber internet, can make sense and help retain your property’s competitive appeal. Your NOI can improve as fiber can both cut costs and boost revenues.
Your property investment portfolio shouldn’t lose value because of its aging telecom infrastructure. Why wait? Contact a Quantum Fiber expert about your property today.
Contact a Quantum Fiber Connected Communities expert to learn about connectivity solutions tailored to your multifamily community
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