6 Multifamily Renovation Mistakes to Avoid

Multifamily properties continue to pop up all over the country, and when brand-new residences enter the market, owners of older properties may need to make updates if they wish to attract and appeal to the same tenants. While you may feel inclined to add an abundance of new amenities and features to set yourself apart in a competitive market, making too many upgrades or enhancements, or making the wrong upgrades and enhancements, may have the opposite effect.

When rehabilitating older multifamily properties to compete with more modern options, avoid making the following six mistakes.

1. Choosing the wrong contractor

When you work with the cheapest contractor, you may pay for it for years to come. Companies that offer the lowest rates tend to do so by sacrificing quality and cutting corners but doing so may lead to safety concerns, a need for corrections later, and significant financial losses. Additionally, make sure your contractor carries general liability and worker’s compensation insurance. Reputable contractors will carry these forms of insurance. It is also a good idea to make sure your contractor is licensed in your area and for the type of work you are undertaking. For these reasons, Wheelhouse Construction cautions against choosing a contractor based on price alone. Doing so may mean lower upfront costs, but you’ll likely pay what you save and then some to cover ongoing maintenance.

2. Not knowing your audience

Doing your due diligence in terms of the tenants you wish to attract helps ensure that you not only make the appropriate renovations, but that you make renovations your desired tenants can afford. Consider surveying a sample population to see what types of amenities are most desirable. Ask, too, how much your prospective tenants would be willing to pay for these upgrades before making them.

3. Neglecting the exterior of the property

These days, many tenants make decisions about where to live based on either online images or first impressions. Thus, making sure your property has exterior appeal is a key part of the renovation process. Without curb appeal, tenants may not even consider seeing what’s inside, so make sure you are creating a space tenants would be proud to call home.

4. Neglecting to consider energy efficiency

Making seemingly small upgrades in terms of energy efficiency, such as adding LED light fixtures, can boost the value of a property and help attract tenants while leading to lower energy bills at the same time. However, some energy efficiency upgrades are more valuable than others, so make sure you’re making enhancements that actually lead to noticeable returns and lower long-term costs.

5. Failing to consider property age

The age and history of a multifamily property is a key consideration when it comes to how to renovate it. You may feel tempted to add new fixtures and finishes to a decades-old property only to find that it still fails to attract the same demographic as more modern residences. However, having a historic property may offer benefits of its own, so it may behoove you to make enhancements that highlight and embrace the building’s historic appeal, rather than hide it.

6. Making inappropriate quality-of-life renovations

Just as making the right upgrades and adding the right amenities may help you attract your desired demographic, adding the wrong ones can repel prospective tenants. If your property is in an area with a low walkability score, for example, adding bike racks or bike storage areas may not help much. On the flip side, if you live in an area where a high number of residents are dog owners, adding an onsite dog park may enhance your property’s appeal among this demographic.

Ultimately, renovating an older property means taking a good, hard look at what your tenants want, what they can afford, and how you can cater to their wants and needs in a way that leads to the strongest return on your investment.

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For those who wish to capitalize on today’s robust multifamily market by upgrading existing assets, or purchasing and renovating a property, please contact us to find out more about your options.

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Wheelhouse Construction is a Denver-based apartment renovation, commercial renovation, and tenant construction contractor specializing in, commercial properties development and multi-family renovations. For assistance with commercial building renovations, call 303.991.6493 or email contact@wheelhouseconstruction.com.