When Anthony Oliver relocated from Boston to Chicago several years ago, he was determined to rent an apartment in Chicago’s Gold Coast neighborhood.
A businessman who works in international trade, Oliver, 37, planned on working out of his apartment and wanted to be close to clients who stayed at the five-star hotels in the area.
At the same time, Oliver needed space, and lots of it, to set up a home office and entertain clients. He decided on moving into The Chicagoan at 750 N. Rush St.
He also decided to make some improvements to the two-bedroom unit he was renting on the 15th floor. Over the course of a month, with the help of architects, he knocked down walls; patched, painted and wallpapered; and transformed the apartment into a one-bedroom unit with a large office and dining/conference room.
“I reconfigured the space so that it made sense for my needs,” says Oliver, who spent tens of thousands of dollars in the process.
The Gold Coast resident is not alone. In recent years, more renters are getting into different levels of home improvement, an activity usually associated with homeownership.
“Most of our residents prefer to rent an apartment rather than to buy a condominium, so their apartment is their home,” says Lela Cirjakovic, a property supervisor for rental management for Chicago real estate firm Draper and Kramer.
“They’re not thrilled anymore, however, with having their home look like a vanilla box, with off-white walls and beige carpeting,” she adds. “They want to put their own personality and tastes into the apartment. And making a few upgrades is the way to do that.”
“No matter where you go, rental apartments are very generic and an improvement can make a tenant feel that they have more of an emotional investment in the place,” says Anthony Michael, a Chicago-based interior designer. “It becomes a nicer place to live in.”
The trend is not limited to high-end apartments.
In fact, numerous mid-range rental buildings in and around Chicago have established programs that allow new tenants, as well as those renewing their leases, to make upgrades to their apartments at a subsidized cost.
“It used to be that when you rented an apartment, what you saw is what you got,” says John Leanse, an assistant vice president and property supervisor with Draper and Kramer. “That mentality is changing as rental complexes are advertising `apartment homes’ to compete with the condominium market and as they try to do a better job than the building down the street.”
There is a downside to apartment home improving, however.
Unlike homeowners, who often can realize a return on their home improvement investment when they sell their residence, apartment dwellers recoup nothing.
In fact, an apartment dweller not only has to pay for the improvement when it goes in, but is often responsible for the costs of “removing” the improvement when they move out.
“You’re paying on both ends,” says Joanne Moran, the leasing manager for the 2,300-plus unit Presidential Towers in Chicago.
“What we typically tell the resident is that they’re responsible for the restoration of their apartment to the condition it was originally in at the end of the term of their lease,” says Cirjakovic.
There are some exceptions to this process.
“We’ve had residents upgrade the flooring in their apartment’s foyer from carpeting to marble and that’s a rather impressive improvement, something I don’t think we’d ask them to restore to its original state,” says Cirjakovic.
“We’ve had to make some judgment calls,” adds Leanse. “I’ve had managers who have wanted to charge someone for removing an improvement, and then I’ll get a call from the tenant who says they believe the improvement should stay. Then we have to evaluate the situation.
“For example, we’ve had a couple of cases where people have installed floor-to-ceiling mirrors on closet doors or walls,” he adds. “There, we made the decision to leave those in and not charge the resident.”
In general, the more traditional or conservative the improvement, the more likely it will be accepted by building management at the end of lease, forgoing any removal costs.
“But you never know how the landlord will react,” says Anthony.
Some tenants are offsetting the costs of adding–and removing–improvements to their apartments through the growing number of “customization” programs being offered by a number of building management firms.
For example, The Habitat Co.’s program allows tenants of Presidential Towers to upgrade their carpets; install hardwood floors in foyers; install marble, ceramic or granite floors in bathrooms; or replace laminate countertops with Corian or marble countertops.
“We basically subsidize these improvements to make them more affordable to our residents and upgrade our units,” says Moran.
For example, to add a hardwood floor to a carpeted foyer would cost the tenant of a one-bedroom Presidential Towers apartment about $900, a sum that can be amortized over three years at no interest.
“For a slight increase, the resident gets a very nice improvement,” says Moran.
Draper and Kramer has a similar program at its Lake Meadows Apartments in Chicago and its Saratoga Apartments in Rolling Meadows. Both buildings offer a free move-in incentive of new window valances, wallpaper border, carpet color choices or closet organizer.
Tenants of smaller buildings will probably find landlords less flexible.
“While you can convince the landlord to let you make the improvement, most of the time the tenant is going to pay for all of the improvement,” says Michael. “But sometimes the tenant can coax the landlord to lower the rent as he or she will see appreciation in the building because of the tenant’s improvement.”
One benefit of the tenant paying for the improvement is that they can have more control over the job. “The tenant gets to pick the colors and the contractor versus haggling with the landlord about it,” says Michael.
Because there is no return on their home improvement investment, few renters make the same improvements that are the most popular with home owners: renovating kitchens and bathrooms, or constructing an addition.
Instead, apartment home improvements are more low-key. In addition to basic painting and wallpapering, typical projects are:
– New kitchen floors. “These often make the cabinets look better,” says Michael.
– Bathroom storage units. “Bathrooms in older buildings are especially small and people need more space,” he adds.
– Faux finishes. “These can really add a lot of interest to even a generic apartment,” says Michael.
– Low-cost window treatments.
– Track lighting.
– Closet storage systems.
– Mirror panels in bedrooms and bathroom. More expensive projects include refinished floors and new wood floors.
On the high end are less common projects such as rearranging of walls, or the blending of two or more apartments into one larger unit.
To avoid any turmoil at the end of a lease, apartment dwellers are advised to discuss any potential improvements with building management. “Our people will even give our tenants a quote as to what it will cost them to take out the improvement before they put it in,” says Moran.
“The lease will usually tell you what you can and can’t do and what you need approval for,” says Leanse.
