The Benefit of Unit-by-Unit Renovations vs. Major Overhauls of Apartment Complexes and Multifamily Communities
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Regardless of the size of the property, whether it is luxury or affordable, urban or rural, property owners are concerned about the same things, property value and profitability. Maximizing rental income and keeping expenses low are the top priorities. When the Net Operating Income (NOI = Income minus Expenses) on a Multi-Family property increases, so does the overall property value.
Metro Denver has one of the most competitive rental markets in the country. Demand is high and supply is low. Last year inventory added by new construction was absorbed without increasing vacancy rates, in fact, vacancy rates decreased by over 1%. At the same time, apartment rents grew by 2.9%, which is slightly faster than the overall inflation rate.
To keep up with the competition and capitalize on current market opportunities, property owners need to justify rent bumps while keeping expenses and vacancy rates low. Individual unit renovations and rehabilitation of the property are the main factors in generating and justifying rent increases.
For most property owners, a complete rehab of the entire property is cost prohibitive and not feasible. However, opting for unit-by-unit renovations as apartments become vacant softens the financial burden of a complete overhaul while keeping occupancy and rental income stable.
Stonebridge Builders, a Colorado-owned and operated commercial construction company, has perfected unit-by-unit apartment rehabilitation and has made this a top priority in their business model. For all projects, the scope of work and timeframe for completion is determined by allocated budgets and projected lease turnover.
Stonebridge understands local market conditions and works diligently with property owners to ensure that unit availability and quick turnaround are maximized while costs and income loss remain low. Currently, on a larger scale, Stonebridge is renovating 600 units over a 2-year period for a large multifamily community in Superior, CO and completing 55 units over 12 months for a smaller Denver metro apartment complex. When Stonebridge recently completed turn key renovations for an apartment complex in Littleton, each unit was completed in 10 days or less, maximizing unit availability and minimizing rent loss.
Successful unit-by-unit apartment renovations and value-add projects require planning, preparation and careful oversight and management of the project. When tenant occupancy is high, exterior improvements like new siding, stamped concrete, designer patio finishes, parking lot re-paving and landscaping can supplement a lower volume of interior renovations of kitchens, baths, plumbing and lighting, new paint and flooring.
To create a strategic plan and partnership to renovate an Apartment Complex or Multi-Family Community, call us. 20 years of experience in the industry, a portfolio of successful outcomes and our commitment to providing the absolute best customer service will ensure an outstanding experience from start to finish.