How to Increase NOI in Multifamily Properties

Net Operating Income (NOI) is one of the most important metrics in real estate investing. Whether you’re just getting started or already managing a portfolio, understanding how to increase NOI in multifamily properties can directly impact property value, cash flow, and long-term success. 

The good news? There are practical strategies you can apply that don’t always require massive renovations or risky overhauls. Let’s break it down.

Understand the Basics of NOI

NOI is calculated by taking the total income from your property (mainly rent and other fees) and subtracting operating expenses like maintenance, utilities, and management costs. The higher the NOI, the more profitable your property becomes.

Here’s why this matters: property values in multifamily real estate are often based on income. A $10,000 boost in NOI can translate into hundreds of thousands of dollars in added property value, depending on the capitalization rate in your market. This is why increasing NOI isn’t just about better cash flow—it’s about growing your equity.

Optimize Rent Without Scaring Tenants Away

One of the most straightforward ways to increase NOI in multifamily properties is by adjusting rental rates. But this has to be done thoughtfully.

Instead of hiking rents across the board, look at market comparables. Are similar properties in the area charging more for the same or fewer amenities? If so, you may have room to raise rents without losing tenants.

For example, imagine you own a 20-unit building where rents are $50 below market rate. Adjusting rents closer to market could increase your annual NOI by $12,000 ($50 × 20 units × 12 months). That’s a major value boost with minimal cost.

Add Value Through Amenities

Tenants are often willing to pay more when they feel they’re getting value. Adding small but impactful amenities can make a big difference.

Some examples include:

• Installing in-unit washers and dryers
• Offering high-speed internet as part of the lease
• Upgrading common areas with fitness equipment or co-working spaces

These don’t have to break the bank. Even something as simple as secure package lockers can attract tenants and justify a modest rent increase. The key is choosing amenities that align with your tenant demographic.

Reduce Operating Expenses Smartly

Cutting costs is another direct way to raise NOI. But don’t confuse this with skimping on quality or ignoring tenant needs. Instead, focus on efficiency.

• Utility savings: Switch to LED lighting, install low-flow plumbing fixtures, or add smart thermostats to reduce energy consumption.
• Maintenance contracts: Review service agreements and renegotiate when possible. Sometimes switching providers can save thousands per year.
• Self-management technology: Property management software can streamline rent collection and communication, lowering reliance on third-party services.

For example, upgrading to energy-efficient appliances across a building may cost upfront, but over time the lower utility bills can add thousands back into NOI annually.

Improve Tenant Retention

Turnover is expensive. Every time a tenant leaves, you face vacancy loss, cleaning, and marketing costs. By improving retention, you stabilize income and protect NOI.

Here are some practical tips:

• Respond quickly to maintenance requests
• Organize simple tenant appreciation events
• Keep communication clear and respectful
• Offer renewal incentives, such as small rent discounts or minor upgrades

A stable tenant base not only protects cash flow but also makes your property more appealing to future buyers who value consistent income streams.

Explore Additional Revenue Streams

Sometimes the best way to increase NOI in multifamily properties is by thinking beyond rent. Consider adding ancillary income sources that provide tenants convenience while boosting your bottom line.

Examples include:

• Charging for parking spaces or garages
• Offering furnished units at a premium
• Installing vending machines or laundry facilities
• Adding pet fees or deposits

Small changes like this compound significantly in multifamily operations.

Renovate Strategically, Not Emotionally

Renovations can be a double-edged sword. Done right, they can push NOI up substantially. Done wrong, they can drain capital without much return.

Instead of gutting entire units, focus on high-impact upgrades:

• Replace outdated countertops with affordable granite or quartz
• Refresh old flooring with durable vinyl plank
• Upgrade lighting fixtures for a modern touch

The goal is to achieve maximum rent increases with minimal spend. For example, spending $3,000 to update a unit that allows you to raise rent by $150 per month adds $1,800 annually to NOI—meaning your investment pays for itself in under two years.

Keep an Eye on Property Management

Whether you self-manage or hire a property manager, efficiency in this area can make or break your NOI.

If you’re paying for management services, evaluate whether the company is delivering value. Are vacancies being filled quickly? Are expenses being controlled? Sometimes switching to a more proactive property manager pays for itself many times over.

If you’re self-managing, ensure you’re using modern systems for accounting, tenant communication, and rent collection. Small organizational changes can improve operations and protect NOI.

Final Thoughts – Boosting NOI the Smart Way

Increasing NOI is not about one giant change—it’s about consistently optimizing income and expenses. From raising rents strategically to adding revenue streams and keeping tenants happy, every improvement compounds over time.

Remember, NOI directly influences your property’s value. A small increase today could mean hundreds of thousands in future equity. That’s the real power of understanding how to increase NOI in multifamily properties.

Ready to Grow With the Right Community?

Real estate investing doesn’t have to be a solo journey. Surrounding yourself with experienced mentors and like-minded investors can accelerate your learning and keep you accountable. If you’re serious about mastering strategies to increase NOI in multifamily properties and scaling your portfolio the right way, now’s the time to connect with others who are doing it too.

Join WealthGenius—the fastest growing real estate investment community—and take your investing to the next level.