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How EV Charging Can Boost Property Value and Rental Income for Multifamily Buildings

Aug 19

3 min read

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As the demand for electric vehicles (EVs) continues to rise, multifamily property owners are increasingly looking at EV charging stations as a valuable addition to their buildings. But how does this investment impact the overall value of a property, and what does it mean for rental income? Let’s explore the numbers and see how EV charging can significantly enhance the financial outlook for apartment and condo owners.


Understanding the Financial Impact of EV Charging Stations


1. Net Operating Income (NOI) Boost Each EV charging station, or Electric Vehicle Supply Equipment (EVSE), can generate an average of $50 per month in revenue, totaling $600 annually. This might seem modest at first glance, but when scaled across multiple units, the impact on a property’s Net Operating Income (NOI) becomes quite substantial.


2. Cap Rate and Property Valuation The Cap Rate, which is calculated as NOI divided by the property value, is a critical metric in real estate. It typically ranges between 5-6% for most markets. By increasing NOI through the installation of EV charging stations, property owners can directly enhance their property’s value.


Let’s break down the impact using a real-world example.


The 30-Unit Install Case Study


Suppose you manage a property and decide to install 30 EV charging stations. Here’s how the numbers play out:

  • Annual NOI Increase: 30 units * $600/year = $18,000/year

  • Property Value Increase: $18,000 / 5% Cap Rate = $360,000


In this scenario, a relatively small investment in EV charging infrastructure leads to a substantial $360,000 increase in property value. But what does this mean in percentage terms?


Percentage Change in Property Value


The impact on property value varies depending on the size and age of the building. Here’s a closer look:


For Older Buildings (10+ Years)

  • 50-Unit Dwelling: The property value increases by 2.9% to 3.6%

  • 100-Unit Dwelling: The value increase is between 1.5% and 1.8%

  • 200-Unit Dwelling: The value increase ranges from 0.7% to 0.9%


For Newer Buildings (Less than 10 Years)

  • 50-Unit Dwelling: Property value increases by 2.0% to 2.4%

  • 100-Unit Dwelling: The increase ranges from 1.0% to 1.2%

  • 200-Unit Dwelling: The value goes up by 0.5% to 0.6%


A Deeper Look: The 50-Unit Example


Let’s take a 50-unit older building as an example. If the property value per unit is $200,000, the installation of 30 EV charging stations could increase the property’s value by 3.6%. If the units are valued at $250,000, the value increase is 2.9%.

This percentage increase translates to a significant boost in the overall valuation of the property, providing a substantial return on investment.


The Rental Income Advantage


Beyond just property value, adding EV charging stations can also enhance rental income. Tenants increasingly prioritize sustainability and convenience, and EV charging availability is becoming a key amenity for many renters. Property owners can justify higher rental prices by offering this service, potentially attracting a more affluent tenant base.


An Investment That Pays Off


For multifamily property owners, investing in EV charging stations is not just a nod to sustainability—it’s a smart financial decision. With potential increases in property value and rental income, this is an upgrade that pays for itself and then some. As the market for electric vehicles continues to grow, the demand for charging infrastructure will only increase, making now the perfect time to invest in your property’s future.


At Pando Electric, we specialize in providing tailored EV charging solutions for apartments and condos, ensuring you maximize both your financial return and tenant satisfaction. Contact us today to learn more about how we can help you enhance your property’s value with EV charging stations.


Contact Us Today to Bring Affordable EV Charging to Your Property


Aug 19

3 min read

4

118

0

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