Multi-Family Property What to Consider When Renovating
Unless you have a really big and close family, it’s safe to say you purchased, or are planning to purchase, your multi-family property to make a profit. And as a business-savvy person, you probably realize that every investment needs a bit of TLC to maximize its potential. That is where renovations come into play. Now, you might be wondering – what is there to consider when renovating a multi-family property? Unsurprisingly, many things! Home improvements are already tricky enough, so it’s not hard to understand why the headaches only multiply with the number of units! Still, you shouldn’t let this intimidate you. It is more than possible to execute this project without losing your sanity. Here’s how.
Start with a plan
Whether you are a seasoned real estate investor or a beginner, you shouldn’t commence anything without a good plan. Considering everything that needs to be done, devising a course of action, and putting it all on paper is of the utmost importance for projects as complex as this one.
Needless to say, multi-family property renovation isn’t going to be cheap. Because of this, you might want to start with figuring out your budget. Ask yourself what it is you want to achieve with this endeavor. Are you looking to fix and flip, or do you want to improve your property to increase rents? Once you sort out your expectations and abilities, seeing the bigger picture and avoiding costly mistakes will be significantly easier.
Choose renovations with ROI in mind
Tying into the previous point – you need to choose the renovations wisely. Since it’s unlikely you are embarking on such an extensive project simply because of your affinity for home improvements, it’s essential to think about the return on your investment.
This means that your preferences shouldn’t be a priority. Instead, you need to think about the tenants. Would they be willing or able to rent an apartment with access to a private golf course and an infinity pool? If not, focusing on these types of renovations probably isn’t the best idea. While you want to raise the rent, you don’t want to inflate it to the point that no one can afford it. In many cases, updating the flooring and freshening up the walls or adding new appliances and valuable amenities is much more profitable than lavish additions and upgrades.
Make necessary improvements
When renovating a multi-family property, it is imperative to address the necessities first. After all, investing in state-of-the-art, energy-efficient appliances won’t matter much if the windows are drafty and doors don’t close properly.
Take a walk around the property and pay close attention to everything that needs fixing. Whether it’s leaky pipes or broken light switches, focusing on the details will surely pay off. Moreover, you want to make sure the structure is entirely safe for future inhabitants. Only this way will you be able to attract and retain quality tenants.
Add more amenities
Once the essentials have been dealt with, you can move on to additions and upgrades that will turn your property from drab to fab. Think about the amenities that appeal to the kind of tenants you want to attract. Remember – these will act as a selling point when the time comes to put your property on the market.
Whether it’s something as simple as extra parking space or more complex like a gym or a pool, make sure to choose wisely. Neither under nor over-renovating will prove to be wise in the future. If you are unsure about what to add, it might be a good idea to consult with your real estate agent or even ask your current (or potential) tenants.
Work on the curb appeal
When it comes to renovations, most people focus mainly on the indoor part of their property. However, this is a big mistake. Whether you plan to sell or become a landlord, curb appeal will play an essential role in your undertaking. In real estate, you do judge a book by its cover.
Therefore, make sure not to exclude beautifying the exterior from your to-do list. Freshen up the paint, plant a few shrubs or trees, touch up the details – anything that will make your property look more appealing!
Enlist the help of professionals
Renovating a multi-family property, much like buying one, shouldn’t be done without the help of professionals. While it may be tempting to save a few bucks by DIYing some aspects of the project, know that the potential stress and delays likely won’t be worth the savings. Instead, allow yourself some much-needed peace of mind and research competent contractors who can help you execute everything precisely and timely.
Moreover, contractor services are not the only ones you should account for. Some projects like updating the flooring in the apartments might require you to consider storage services for the duration of the renovation. Having a unit at your disposal will ensure better safety of the rental inventory and fewer distractions for the workers.
Leave some breathing room for the unexpected
No matter how thorough of a plan you come up with, the unexpected is bound to occur. Whether it’s previously undetected structural issues with the building, bad weather, or unforeseen expenses, don’t be fooled that this won’t add to the stress. And while you cannot predict what issues will pop up, you certainly can prepare for them.
This means that settling on a too-tight budget or deadline when renovating a multi-family property probably isn’t a good idea. Leaving a bit of wiggle room when it comes to your finances is a given, but you shouldn’t make any overly ambitious promises when it comes to the move-in date either. This will give everyone enough time to finish their tasks without too much pressure, which will undoubtedly positively affect the outcome of the entire project.
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