If done right, multifamily property renovations are an absolute goldmine to maximize investors’ return on investment. As more exquisite multifamily properties join the real estate world, older assets, consequently, require an upgrade. Enhancing the aesthetics and available amenities of older communities ensures that they remain abreast of the competitive real estate market. Below are mistakes to avoid when it comes to multifamily property renovations.
Ignoring the Housing Market and Demographics
Undertaking multifamily property renovations without analyzing the housing market is a costly mistake. For any investment, making renovations should translate to more returns.
When considering renovations, perform a real estate market survey, especially with actual tenants. Then, re-design the property based on the tenants’ upgrade requirements, not on general trends.
Ignoring the Property Age
The property age, to a great extent, impacts the overall cost of renovation. Older assets command more renovations to remain at par with the more modern property.
However, the investor must also consider the expected returns upon performing renovations. Always ensure that the renovation budget doesn’t outweigh the expected returns.
Ignoring the Energy Efficiency Factor
Most investors often overlook the energy efficiency of their property. Energy efficiency benefits both the tenants and investors since the energy bills and turnover rate reduce significantly. Moreover, lower energy consumption means increased property value.
Embracing energy-efficient initiatives for the multifamily property could be as simple as adopting energy-saving lighting. Reduced energy usage also lowers the cost of regular maintenance checks.
Not Hiring Professional Contractors
Going for a low-cost general contractor will reduce the whole renovation process to zero. Despite having tempting offers, such contractors will have the investor making losses instead of desired profits.
To avoid this mistake, conduct extensive research regarding prospective expert contractors. The contractor of choice should bear substantial experience working with multifamily properties. Reviews from other real estate investors come in handy during the vetting process.