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As the real estate market in the US is now on
the rise, and there is a significant increase in the need for affordable
housing. Though it’s a favorable time for investors to invest in multifamily
properties and expect great returns, they need to carefully tread before taking
a big step such as purchasing a lot of properties. Multifamily investors must
have a fair idea of the renovation and restoration and what to expect
afterward. Continuing the discussion, the blog post provides a comprehensive
overview of all the factors to consider before investing in the multifamily
properties. Take a look.

Pre-Acquisition
Evaluation

Prior to acquisition, almost every investment
option may appear lucrative and promising as far as ROI is concerned. The
actual worth of the investments, however, is realized after the multifamily
units are either up for sale or rent, once the restoration is complete.
Therefore, pre-acquisition evaluation is a crucial factor and investors must
take it into account while purchasing a property. A few of the vital components
of pre-acquisition evaluation investors need to consider in this stage include:

Market Study

While performing a market study, the current
trends and conditions of the real estate market are worth considering in the
target market. Additionally, investors need to identify whether people in that
area are more interested in buying or renting households. This would allow the
investors to analyze whether the investment holds any value in the short or
long term, so that investments can be meticulously planned for maximum returns.

Inspection

Before putting their money on the table,
investors need to hirereliable multifamily contractors to assess the anomalies in the property and estimate the efforts,
timelines, and resources required to restore or reposition the asset. Once a
comprehensive planning and implementation strategy are in place, investors can
get a better hold on their investments.

Budgeting

A detailed estimate of the investments needs
to be performed in this stage including additional costs incurred in legal and
registration process.

Asset Improvement
or Repositioning

This stage of multifamily renovation and
restoration largely decides the value investors are able to draw from their
investments, and therefore, demand undivided focus. Before taking a foot
forward, it is important to understand the different grades in multifamily
properties:
●       Class
A –
The most lavish multifamily units, equipped
with facilities, such as fountains, pools, barbecue areas and fitness centers,
capable of attracting the highest possible rent in their respective submarkets.
●       Class
B –
Designed for median wage earners and are
usually a step down from Class A.
●       Class
C –
Units with basic amenities and in a desperate
need for restoration and renovation to extract optimum returns.
Crucial elements of asset repositioning
include:

Roofing

Investors need to plan roofing aspects in
advance including choice of material, energy efficiency demands and a strategy
for preventive maintenance. This stage is important for accentuating the
aesthetics of the property and safeguarding the property against leaking and
weather elements over the years.

Interior and
Exterior

Nothing attracts tenants and buyers more than
dashing interiors and exteriors of a multifamily unit. Investors should hire
reliable renovation contractors who can suggest the right renovations for the
property that can attract a sizable number of tenants or buyers over time.

Functional Systems

In this stage, careful planning of aspects
such as drainage, heating, cooling and energy efficiency needs to be done. Even
if the renovations occupy a higher price point on the budget, occupants never
mind paying more in exchange of value; so the proposition is worth considering.

Scope of Insurance
Claims

Filing of an insurance claim needs to be
assisted in the presence of a qualified roofing provider so that there is
little to no scope of disparity. Therefore, multifamily investors should rely
on professional roofing services while the assessor is assessing insurance
eligibility.

The Bottom Line

There are several advantages of owning
multi-family properties. These include access to easier and better financing
opportunities, the ability to quickly grow one’s rental property portfolio and
the luxury of hiring a property manager. As a part of the multifamily
renovation and restoration strategy, investors must consider renewable energy
options such as solar and wind energy. Opting for such options can help in
getting significant tax rebates and also gather LEED points for using
eco-friendly materials.