Why cutting corners on renovation today could lead to diminished ROI in the long run?

 

Time is money when it comes to multifamily renovation projects.

 

Real estate investors that have experienced multifamily renovation projects firsthand are aware of the dangers that can arise, including missed deadlines, inadequate planning, poor performance of general contractors and project management, as well as additional unplanned expenses incurred due to project delays.

 

Every project has a unique X-factor that must be taken into account and carefully prepared for in order to complete the multifamily project renovation on time and budget.

 

Saving a modest amount today on multifamily renovation can lead to astounding diminished returns in the long run for multifamily investors.

 

How to make sure that you get the best value for your money today and ensure the best ROI in the future for your multifamily renovation project?

 

Planning ahead

 

Developing a thorough pre-renovation strategy is by far the most important aspect of a project’s success. What conditions does the owner have? How long will the project take? When will the materials mentioned arrive? How can the finest internal and external team be put together for each unique project? What regulations do the municipal and state have? What is the track record of the general contractor with similar projects?

 

Recognize that around 70% of renovation projects’ labor, such as flooring, cabinets, countertops, and paint, is relatively simple to budget for and schedule. The remaining 30%?

That’s the aspect that varies for each project. It might be asbestos, lead, solar energy, or project energy efficiencies in older constructions.

 

Multifamily renovation projects can be time and CAPEX consuming. Depending on the size of the project, you can compare quotes from different sources and select upgrades and more affordable options. But when it comes to selection of the right general contractor you might want to rethink going for the cheapest alternative.

 

Material discounts

 

Hiring a general contractor with an in-house manufacturing and a custom build process that also utilizing a global supply chain and aggregated buying power across a national platform is a game changer. Since material costs comprise more than 50% of a multifamily renovation budget, successful material buyout is of utmost importance.

 

General contractor credibility

 

A successful renovation program increases the property’s life expectancy, asset value, and resident satisfaction.

 

A general contractor bears the majority of the risk and accountability that come with multifamily renovation projects. You can count on your general contractor to be licensed and insured, and you can be confident that everyone else they hire will be as well.

 

You will want to be sure that everyone and everything under your roof is protected by worker’s compensation and liability insurance because accidents on the job site might harm employees and damage your multifamily property.

 

Therefore, going for the general contractor with an impeccable track record that can offer you the best value for money today and maximize the capital appreciation and cash flow of your renovation project in the long-run is always the best option.