Value-Add Projects Like Kitchen and Baths Yield Big ROI

When a local multifamily community was feeling the pressure of Denver's highly competitive rental market, they turned to Stonebridge Builders for help. They needed to consider upgrades not only to address deferred maintenance issues and outdated amenities, but also to justify rent increases to be consistent with local demand.   In densely populated urban areas with many options for apartment living, property owners need to set themselves apart from the competition. For many, this means rehabilitation projects to bring value where others don't. By industry standards, a successful renovation project should generate rent increases between 10-30%from interior improvements, and renovations to kitchens and baths tend to generate the greatest ROI.     

A great example of this strategy is Home Properties, headquartered in Rochester, NY. The company owns over 43,000 units in 121 properties primarily located in the Mid-Atlantic and Northeast. The company strategy is to acquire assets that most other developers would not be interested in. They're not looking for the newest, most attractive or luxury communities. The assets they acquire are in need of rehabilitation. The company knows that by rehabbing and renovating properties that are "a little beaten up and a little run-down" they can achieve substantial rent increases, which ultimately drives revenue. This strategy has yielded an 11.4 percent average annual total return over the past 10 years, and a 5- year compounded return of 11.7 percent.

Deferred maintenance is certainly an area of focus in multifamily renovation, however the most significant investments are made in upgrading kitchens and baths.   In Denver, Stonebridge Builders helped the local company to exercise this strategy and achieve the same results. Kitchens were upgraded with updated cabinetry and counter tops, state of the art appliances and both pendant and recessed  lighting to create a brighter look and feel. Baths were also remodeled with upgraded materials and lighting, which justified rent increases, encouraged retention and decreased vacancies.  

If your multifamily property could use a little TLC, and you're considering a value-add project, look to Stonebridge Builders for a consultation and ultimately for a seamless and successful process.  

Keeping Critters Out During Construction

In older apartment buildings we almost expect to see the occasional bug or rodent. We might get startled but we’re not necessarily surprised when we come across one. We don’t like it, but we know it sort of comes with the territory. Over time, even properties without significant deferred maintenance can become safe havens for pests.

What about pests in multifamily new construction, or after renovations or remodels?

Not only do we have zero tolerance but it’s probably an indication of a much larger problem that started during the construction process. Stonebridge Builders, a local commercial builder specializing in multifamily renovation and apartment remodeling, takes special precautions during the demolition phase to ensure the environment is unappealing and uninhabitable for insects and rodents. 

Chris Tolar, Stonebridge Owner and CEO, says, “During a renovation or remodel, rodents generally aren't an issue, even if they had been prior to the start of the demo. They don’t like to be around people. So, with so many people on site, they’re not attracted to the area and any places that were previously home to mice and rats are destroyed in that process.”

The demo process also gets rid of infestations of bugs like ants and roaches. Removing old materials generally kills anything living there and a thorough cleaning process prevents future infestations. Tolar says, “When we pull everything out and strip the unit down to the bones, we clean thoroughly before starting any new construction. The cleaning process prior to the rehab and more importantly the cleanliness of the job site, is critical to preventing future infestations. We’re very conscious to remove all debris and/or food that could attract ants and insects.”

Once construction gets underway, Tolar says Stonebridge has guidelines committed to design, planning and the best construction practices for pest prevention. Because bugs love water, in planning a multifamily rehab, Stonebridge suggests several simple design strategies:

Select materials that are highly resistant to moisture and decay like certain pressure treated lumber and plastic or composite materials when applicable. Simplify plumbing by making sure it’s easy to inspect, maintain and repair if needed. Insulate pipes to prevent condensation and eliminate damp spaces that attract bugs. Replace carpet that routinely gets wet and never install it in bathrooms, laundry rooms, entryways and kitchens.

Once construction is complete, moving forward property managers should routinely and thoroughly inspect individual units adopting the EPA’s strategy of Integrated Pest Management, while also consistently making sure that residents are up to speed and educated aboutpest prevention.

If you’re considering a remodel or renovation to an existing property, regardless of it’s condition, confirm that you’re using a contractor like Stonebridge Builders, one that is committed to the best practices and guidelines for pest prevention for the long term.