Multi-Family Advice

Why We Just Filled In A Pool. In Texas. In Summer.

By August 30, 2018 March 4th, 2019 No Comments
Summer time in Texas. Where images of triple digit temperatures, sno-cones, ice cream and swimming pools dance in your head. When it’s consistently this hot for this long, you look for any break from the heat you can get. At most apartment communities in Texas, the pools are packed this time of year, and owners spend tens of thousands of dollars to make the pool area a star attraction for their future and current residents.
Given that, you may find it odd to hear we just finished remodeling one of our apartment communities in San Antonio–where a big part of the update was to get rid of (read: eliminate) a pool. But it’s true. We’ve spent the last 3 months and over $50,000 filling in the second pool at our 253-unit asset. Why would we go a do that to a perfectly good, and wet, amenity?
Our business plan calls for finding creative ways to add value to apartment communities in order to create a warm and inviting home for our residents and a profitable investment for our investors. Being creative and finding ways to do something unique onsite is probably our favorite piece of the business. In the case this asset, we got rid of the pool for the following reasons.
Property had two pools. In our opinion a property of 250-units only needs one pool. Conversations with onsite management confirmed the second pool didn’t get much use. So while we did get rid of one pool, it was the smaller of the two–located further from the leasing center. Make no mistake this property still has a beautiful (and recently upgraded) resort style pool. We would not get rid of the only pool onsite. We’re creative, not crazy!
Reduce Expenses/Increase Value. We talk a lot about ways to add value. But equally effective to increasing the value of a property is to reduce expenses. In our Due Diligence, it was determined that the second pool cost the property about $10,000/year to keep it maintained and operational. Once we confirmed the second pool didn’t get much use, we did the math and saw that by applying $10,000 straight to the bottom line of this asset, that equates to an increased value of over $150,000.
Add Wanted & Needed Amenities. When we took over, this property had two pools, and almost no other amenities. No playground. No community gathering area. No grilling stations. No dog park. By filling in the second pool, we created a blank canvas of community space that we were able to amenitize to appeal to our (future) residents. In talking with residents and looking at the demographic profile (and location) of the asset, we determined that making a family-friendly space would get more use than the pool, and add value to our residents’ lives, so we’ve turned that canvas into a community “park” as we’re calling it. Now where once stood a lonely and underutilized pool sits two built in gas grills, a playground for kids, an outdoor ping pong table and a gazebo with lots of picnic tables and benches. In general, we created a space the entire community will utilize and fills a competitive disadvantage this property faced in the market.
Create Diversity within our Portfolio. This particular asset is located in close proximity to two others in our portfolio (under 2 miles). That gives us incredible efficiencies in the area, but we’re also cognizant to offer different products that cater to different people. At one asset, we recently created an incredible open, modern gym and workout facility–complete with an on-demand fitness system and weekly yoga classes. That property appeals a bit more to young professionals. We wanted to cater this property more to families–thus the playground and park made even more sense. This allows us to refer potential residents between communities, and in very similar locations offer different experiences that meet their wants and needs.
As we write this, it’s 101 degrees outside and the pools have never looked more enticing. But as the Park comes to fruition and the vision is executed, our residents are excited to have the new amenity and our staff is counting down the days to host events at the new park. Some people thought we were crazy for suggesting it, but given the above reasons its turned out to be a great decision.
What do you think? Would you get rid of the pool?

 

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