14 Sep The Journey to Renovate Multifamily Closet Storage
I was a finance guy before Clozzits was created. When people learn about my new endeavor, they often ask me, why closets, why focus on such a niche product that seems to be a little detail in a big apartment complex? My answer to them is always “because that little detail is what influences tenants’ daily lives the most and will contribute a big impact to the property values.”
How It All Started
The idea first came to me in 2017. Back then, I was helping my adopted brother move into an off-campus apartment. My first impression of his building was that the place looked clean and sleek from the outside. However, walking around his apartment, I was especially struck by the bedroom closet design. It was dark and dingy with a flimsy bar to hold the hangers and a thin piece of wood for a shelf. You could see the bar and shelf had been painted over multiple times. I told him – somewhat jokingly – that I felt like it was pulling all the energy out of me.
My brother’s answer was what really gave me the idea that renovating the closet systems could be a major tool to help one apartment stand out from others. However, my brother said that his closet didn’t really matter. He wouldn’t stay in the apartment for long, and he’d find a better building after graduating. His approach is common. Most people easily leave their apartments to find a better, more comfortable one.
Increasing your retention rate is all about paying attention to the details that give tenants immediate satisfaction when they move into their new home. It’s all about making their daily lives convenient and comfortable so they won’t think about moving out immediately after moving in as my brother did.
Keeping that in mind, when a friend of mine who’s worked at one the country’s largest multi-family renovation companies told me the marketplace was ripe for something new, I knew I needed to start CLOZZITS.
What’s in it for Property Owners?
In recent years, property owners have invested in shiny new amenities like resort-style pools, lounges, movie theaters, and high-end granite in bathrooms and backsplashes in kitchens to attract millennial tenants. But these expensive upgrades, many of which require a good amount of square footage, are limited. They also don’t necessarily impact residents every day. They might sound cool, but they end up not making a big impact on the question of “Should I extend my lease?”
The popularity of Japanese organizing consultant Marie Kondo and her “Tidying Up With Marie Condo” Netflix show proved that people are interested in a clean and organized closet. After all, it’s the details that play a major part in setting the tone in our daily lives. We wake up and go to our walk-in closets to choose our clothes for the day, then visit it again after a long day at work. No matter how unimportant the closet might seem, tenants want a high-quality experience. All generations nowadays expect a feel-good moment in every corner of their apartment. Once they get it, they’ll be willing to pay for it.
If you look at consumer surveys, most list storage space as the number three amenity they’re looking for in a property after rent and appliances. Indeed, one study found that almost half of all tenants would pay at least $75 more a month for a bigger closet. That old wire racking in apartment building closets just won’t cut it anymore.
Apartment building closets haven’t changed much in the last 50 years. With such a massive, untapped opportunity, I knew there had to be a way to upgrade them and give tenants what they want, and in return, getting owners the return on investment they need and bumping up property value. Besides, since the closet is so commonly neglected by traditional apartment complexes, having a modern, highly functional closet space will greatly differentiate a property from the competition.
At CLOZZITS, we designed our upscale product – which increases the closet storage capacity by 50% – from the ground up after talking to property owners about their ideal storage solutions. We manufacture our custom closet system with the best materials ourselves so it’s cost-effective and easy to install – either by our network of installers or the building itself.
We understand the inconvenience of downtime to property owners, so we started off by offering our system during the “make ready” time. The installation is guaranteed to finish within four hours or less in between one tenant leaving and the next moving in, ensuring you don’t lose a day of rent. Besides, as a manufacturer, we also sell our system directly to general contractors and owners of new construction.
In our first year, we’ve been thrilled to find that our system does in fact move the needle. Customers who’ve installed Clozzits have seen a rent increase of 2-5% on average and are on track for a Return on Investment (ROI) of up to 37% or more. They’re finding that our system is helping them elevate apartments at a time when people are spending more time at home and thus supporting the increase of tenant retention.
A recent CLOZZITS customer was stuck after upgrading floors, appliances, and exteriors, and wanted another way to add value with a smooth and hassle-free process. Our system earned him an average monthly rent increase of $40 for each master closet.
We’d love to answer any questions you might have and get you started on installing your own CLOZZITS systems. Our team is excited to help you grow your business.