Sterling Pointe has been undergoing significant unit renovations by the current ownership which includes but is not limited to new kitchen cabinets and countertops, new kitchen accent lighting, new bathroom vanities and vinyl plank flooring throughout. Full upgrades have been implemented on 54 percent of the community with an additional 32 percent of units receiving partial upgrades. Current management has been conservative, only charging $25 to $50 premiums for the renovated units versus non-upgraded units and charging the same rent for both partial renovated and fully renovated rents which would allow for the immediate ability to increase the rents for fully renovated units anywhere from $50-$100 more depending on the floor plan.
Each unit has washer/dryer connections and as of right now, tenants either have to bring their own appliances or rent them from a third party-vendor between $50-$100/mo. Based on the competitive set of properties that are including washers and dryers, there is ability to increase rents even further to achieve an average market rent of $739/unit/month, which is an almost 20 percent increase from the current in-place rents.
Each unit is separately metered for water/sewer and electricity but as of right now, trash is included in the rent. This presents an opportunity to bill residents back for trash at $10/unit/month or adding valet trash as an amenity which could add an additional $25/unit/month. This alone would add $30,000 in gross revenue.
While the property is currently 96 percent occupied, the trailing financials have been underperforming due to the conservative leasing of the management company as well as the revenue lost from units that are taken off-line as a result of the on-going renovations. By completing the renovations and stabilizing the property with a more consistent income stream, the property has the potential yield a $1.3 million NOI, which is a 2 fold increase from the current NOI in place today.
