Multifamily Apartment Renovations
Whether it’s for safety or luxury, property upgrades are a great way to attract new residents and increase the value of your multifamily apartment building. However, implementing an extensive renovation in an existing community comes with its own set of risks.
It’s important to plan out your multifamily apartment renovation project carefully to avoid any issues that may arise. Here are some tips to help you get started:
1. Make a Detailed Plan
Having a well-developed plan is key to getting the best results from your multifamily renovations. This will allow you to avoid construction delays and ensure that all aspects of the project are completed in a timely manner. It will also help you stay on budget and avoid any surprises down the line.
Start by making a list of what needs to be done and then work from there. Make sure you consider the impact that each item will have on the property and your renters. For example, adding laundry rooms to your apartment complex can save residents from having to drive to a laundromat and can greatly improve their quality of life.
You will also want to think about the location of bulky items like hot water heaters and electricity fuse boxes, as these can often be hard to move. In addition, you should have an idea of what types of upgrades are most desirable to your current tenants, which can be learned by asking them directly.
You will then want to use a multifamily value-add model to determine what the potential organic rental growth could be after your renovations are complete. This will give you the confidence to proceed with your project and provide a reliable return on investment for you and your investors. If you are not already familiar with this type of model, we recommend learning about it before starting your multifamily renovations.
2. Keep a Budget
As property owners invest in multifamily apartment renovations, they must remain mindful of budgets. If the renovation project runs over budget, it could be a costly mistake that can affect future profit margins.
The good news is that there are a number of things you can do to keep renovation costs in check. For example, you can allocate costs by unit type to help you control costs. A studio apartment, for instance, will tend to cost less than a one- or two-bedroom unit. This is because larger floorplans usually require more extensive kitchen and bathroom renovations as well as updated light fixtures, paint, trim and flooring.
You should also be sure to keep construction costs in mind, as these can be a significant factor in your overall renovation budget. It multifamily apartment renovations is important to research local and national averages for contractor, architect and material costs before beginning your project to avoid any nasty surprises down the line.
Finally, be sure to consider any fees or permits that you may be required to obtain for your apartment building renovation. These can add up quickly and can significantly increase your total renovation costs.
In addition to these, you should not be afraid to consider value-add amenities that will attract tenants and boost your property’s rentable space. For example, in-unit washers and dryers and high-speed internet access are expected features that many people look for when shopping for a new apartment.
3. Do Your Research
One of the most important things to do before beginning renovations on a multifamily building is to do thorough research. This includes researching contractors and checking their reputations as well as previous work. This will help to avoid wasting time and money on renovations that will not add value to your apartment building.
For example, if your current building is a bit older and does not offer amenities like modern smart thermostats and washer/dryers, you might be able to add these features to attract residents and increase demand. You may also be able to charge higher rents than you would if you kept your property in its present state.
Another easy addition that will improve the quality of life for your residents and increase your property value is a package delivery center. According to a 2020 report from the National Multifamily Housing Council, these amenities are of high importance to apartment tenants.
Other practical upgrades that you can do to your multifamily apartment complex include replacing old and outdated windows with energy-efficient options. This will reduce your energy costs and save on maintenance expenses over the long term. You can also install smart home appliances, such as a keyless entry system, to increase security and make your residents feel connected with the latest technology. This will also draw more attention to your complex and improve its curb appeal.
4. Get Organized
When it comes to multifamily apartment renovations, being organized can make or home renovation contractors break the entire project. This means staying on top of schedules, ensuring all parties are on the same page and making sure everyone has access to the most up-to-date documentation. Using a project management software like Buildertrend makes it easy to create a timeline, assign tasks and make decisions all in one place. Getting organized can also help you stay on budget and avoid unexpected issues that eat into your contingency funds.
It’s important to remember that renovating a multifamily property is not just about adding value; it can be an opportunity to appeal to new tenants and improve resident retention. If a building is outdated or not in line with current rental market trends, it’s likely that it will have trouble attracting and keeping tenants.
Creating a modern, updated look is important to attract millennial renters. Changing the style of fixtures and cabinets, for example, can quickly change the overall feel of a room. Choosing designs and colors that will withstand the test of time is a great way to avoid over-renovating and costing your property more than necessary.
Other simple upgrades that can add value to a property include adding storage spaces such as closets, shoe racks or even hat hooks. These small improvements can be inexpensive and make a big difference in how potential residents view the property.
