Value-Add Strategies to Use NOW
Value-Add Renovation Strategies with Rob Trepanier
We sat down with multifamily renovation expert, Gage co-owner and founder, Rob Trepanier to get his expert insight on the best strategies for vintage multifamily
What are the most effective renovations?
Rob: Kitchens and bathrooms are the #1 place to start your renovation. A quick and easy fix is to upgrade plumbing fixtures and electrical fixtures.
Quartz or granite countertops are key, a bright and clean backsplash is very popular now.
People who are looking to rent for up to 5 years don't want to walk into homes and see old white appliances. Upgrading to new stainless appliances is a quick little change that would cost you about $2200 to implement. You can then increase rent to recoup expenses for the new appliances.
What are some of the current trends you see in multifamily renovations?
Rob: We are doing more cabinet door replacements. If the cabinet boxes are in good condition, we will paint them and put new cabinet doors on them. Cabinet fronts in white Shaker-style have long been the trend but now we are seeing gray more and more in units we renovate. We also put new door hardware on the doors and that's a quick and easy way of refreshing your apartment look.
How much does it cost to renovate a multifamily unit?
Rob: This all depends on what the investor wants to change. Bear in mind, these figures do no reflect demo or any repairs to HVAC and plumbing and anything behind the walls.
For instance, upgrading counters cost about $45/SF to demo out existing countertops, install new quartz or granite counters and hook up plumbing and electrical - appliances you may have in the kitchen. For outside countertops, we recommend using granite over quartz due to fading from UV rays.
Painting a small kitchen costs about $500 to paint the boxes and drawers.
Overall, an average of about $15-20/SF will get you a solid unit renovation. This price would not include the demolition but the actual renovation once the old materials have been removed. A scope of work at that price could include paint and flooring throughout, new cabinet doors/hardware, new plumbing, and lighting fixtures.
What if you're renovating an entire community? How would you phase out the renovations?
Rob: My best advice here is to renovate a sample unit first. Take your time and do one unit. If there are any changes to materials, you will know before you get too far into the project, than for instance, if you renovated multiple units at once.
Any other advice or wisdom for investors?
Rob: I would always urge owners and operations to keep existing tenants in place as long as possible. If you turn too many units at a time - say 20 or so -you have those units vacant and not earning money while you are renovating.
Say you have a 200 unit property, and you have 10 units renovated at once, you decrease your occupancy rate by 5%. That can put an unnecessary strain on the investment. Keep those tenants in place as long as possible to keep cash flow strong.