4 Property Due diligence Mistakes to Avoid

Investing in a multifamily property can return rich dividends in the form of rent for years. More families in the U.S. are preferring to rent than buying their own house, which is good news for multifamily property investors. Buying a multifamily property is a major investment decision. You cannot leave anything to chance. To avoid nasty surprises, perform property due diligence or request the seller to carry out vendor due diligence that can alert you against various issues such as incorrect zoning, and design errors. Even though the idea of performing due diligence has been around for quite some time, there are still many misconceptions and wrong notions  floating around that shroud buyers’ judgement. In this post, we take a look at some common due diligence mistakes.

1. Failure to Check Whether the Property Complies With Local Building Codes

A rushed or poorly executed due diligence job can fail to reveal design problems; many of which can result in legal issues. Many investors come to know of this problem when a contractor, working on a renovation project visits the local municipal office to pull necessary permits or an inspector visits to check out the contractor’s work. To avoid costly surprises, hire an architect, or an affordable multifamily housing general contractor who’d ensure the building’s design does not violate ADA and other building codes. Additionally, make sure all the tenant spaces had been built after obtaining necessary permits.

2. Not Walking Every Unit

When buying a multifamily property, you cannot take everything  the seller says on face value. Many owners would express their inability to walk every unit, claiming that it would disturb their tenants. You must, however, insist to walk every unit, as it can expose mold, fire, and other issues.

3. Not Spending Enough Time on The Property  

Do not rush to close the deal. Instead, take your time and survey the property multiple times. Visit different areas such as parking lots, and the front facade. To ensure these areas are not put to other uses, talk to the renters. Many multifamily owners and managers, for instance, allow their renters to use the parking lot as a party pad on weekends.     

4. Not Consulting a Real estate Attorney

The tenant lease may include many clauses such as cancellation provisions, fixed option rents, and contraction provisions that, if exercised by renters can be detrimental to your business interests. To avoid future losses, hire a real estate attorney who will read the lease and help you comprehend the finer points of the agreement.

Wrap up

When buying a multifamily property, performing due diligence helps unearth current and potential future problems with the property. To get the most out of the process, avoid these due diligence mistakes. When hiring a provider, look for contractors who have experience of offering vendor due diligence assistance in USA.

Elements to Include in Construction of an Energy Efficient Multifamily Unit

Designing an energy-efficient multifamily housing plan could be challenging because of the several elements that you need to consider at the construction and planning stage. While the efforts that you need to put in might be high, the result could be overwhelming in the form of a significant reduction in energy bills, more comfort, and a healthy environment for those living in the property.

If you are willing to take the green initiative, read the blog post to learn more about the important elements of an energy-efficient house.

Wall and Roof Assemblies

A wooden frame is a tested construction material that lasts for long and is structurally sound. If you pay attention to details, house made of conventional wood-frame could be energy efficient.

Some of the energy efficient methods to construct the house include:

Optimum Value Engineering – Use wood only where it is necessary to reduce the expenditure and saves the space for insulation.

Structural Insulated Panels – Made of oriented-strand board (OSB) or plywood laminated on the foam board, these act as framing and insulation, which reduces the construction time.

Insulating Concrete Forms – The house has two layers of extruded foam board with one inside and one on the outside. The construction technique is fast, and there is a less chance of any error during the process. Buildings with insulating concrete forms are highly prone to hurricanes and tornadoes.

Insulation

The R-values of an energy efficient house are higher than most local of the building codes requirements. R-value is the material’s ability to resist heat transfer. A low R-value means the heat loss in the building would be fast. A well-designed house has insulation levels ranging from R-20 to R-30 in walls and R-50 to R-70 in ceilings. If you further apply fiberglass rolls, foam insulation, or wet-spray cellulose, it will fill the wall cavities. If appliances such as washers and hot water heaters are in the basement, insulate the walls and floor of the area so that these appliances help in maintaining the heat efficiency of the house.

This might interest you: Energy Efficiency Improvements for Affordable Housing

Windows

More than 25 percent of the heat loss takes place through windows, and even if you install modern windows, they insulate less than the walls of the house. If the house is in a heating-dominated climate, it should have less number of windows in the north, east, and west sides. Make sure that the total window area doesn’t exceed 8 to 9 percent of the floor area of the room. If the window is south-facing, ensure that there is a well-designed roof overhang to prevent excessive heating in summer. Awning and casement style windows are ideal as they close tighter than the sliding windows.

Last Few Words

The ideal way to go about building an energy efficient multifamily unit is by contacting an experienced multifamily unit design and construction company. There are many more elements that play a pivotal role in energy efficient construction, and a professional company would probably include most of the elements in their work.

The 3 ‘P’s’ for Nationwide Rental Property Investors to Gain Maximum Returns

It is well known that ‘location’ has been the prime focus of investors who seek to harness the booming real estate rental market. Investors, however, need to think beyond the conventional and shift their focus from location-based decisions to the much talked about the three ‘P’s’ of real estate that drive profitability today — Preparation, Promotion, and Presentation.

1) Preparation – Getting started

All properties should be prepped before showing it to prospective renters. All building units should be cleaned and well organized. Multifamily housing units, for example, can emit a mildew odor or one from food stored in the refrigerator for extended periods when tenants are away. Failure to take care of this issue can be a huge let down for prospects who come to see the rental unit. If a property is in a good neighborhood and is equipped with all required amenities, it is usually an automatic lease. If the property is well-groomed, but the location is questionable, prospects may still find ways to rationalize the location. How your rental business fares on the market, therefore, depends on how well you get it organized.

Multifamily Development Company Renovations

2) Promotion – Highlight features

Though preparation is the necessity, you need promotion to bring your property to the targeted market. It is important to highlight your property in order to separate it from the other options in the market today. Highlighting unique features in various marketing campaigns should be the first step in this direction. Pictures, videos, and descriptions should be added in a manner that instantly ignites prospects’ imagination, making them eager to see it. Location of the property may be deterrent to some, but the way you present it in your advertisement can make them curious to at least visit it.

3) Presentation – Build Relations

Once you have preparation and promotion plans in place, the next thing you need to do is to ensure appropriate presentation. When presenting the property, the agent should be ready to answer all questions concerning the property, such as amenities, footage, policies, prices, and more. No matter how well the property looks, if your agent cannot sell the idea of buying your property, you may end up losing the deal.

The Bottom Line

The traditional approach to real estate business is no longer workable in the current environment, and failure to take heed will only lead to losses and missed opportunities. Our renovation experts are here to help you with your renovations to ensure your property’s success.

Floor Soundproofing: An Essential Element of Multifamily Housing Renovations

According to the multifamily housing report released by National Association of Home Builders in 2015, the demand of 55+ multifamily housing units has increased even in the third quarter of 2015. The demand has jumped 10 points from 60 to 70 percent and the future demand is expected to increase by five points. To leverage the growing demand for rental units and stay ahead in the competition, investors are leaving no stone unturned to make their housing units attractive to renters, and therefore, often go for renovations. Surprisingly, not many owners think on the lines soundproofing the floor of their property.

Why is Floor Soundproofing Important?

The loud noises of objects hitting the floor, high TV volume and loud music are some of the examples of annoyances that infringe the privacy of renters. Therefore, if the floors of your multifamily housing units are not soundproof, it is time to hire a professional housing renovation expert to make them more renter-friendly. As privacy is one of the primary concerns of renters, soundproofing the units will definitely help you attract more prospects. Here is an overview of some insulation materials used for soundproofing floors.

Insulation Materials for the Floor

Floors coated with high NRC (noise reduction coefficient) rating material prevent annoying sound produced at upper level units from reaching the units at lower levels and tenants get to live in a noise free environment.  Below are high quality sound proof material, usually, preferred by multi-family housing units investors.

Carpet

Carpet with NRC rating up to .4 – .5 works as an efficient absorptive material. Add carpet to your flooring system with layers of pad in between the floors and it significantly reduces the noise produced inside the room. The thickness of the pad is directly proportional to the amount of sound absorbed, so the more sound you want to reduce, the more pad you need to use in between. Carpet is the cheapest option in the short run, but over time may become a cause of concern regarding durability, cleaning, and allergy aggravation.

Cork

Cork is another great choice for sound reduction inside multifamily housing units. It reduces and absorbs sound produced inside the unit and offers peace of mind to tenants in terms of avoidable noise. In addition, cork flooring adds warmth to the room and make the floor comfortable and easy to walk around. Most importantly, if somebody drops any breakable object on the floor by mistake, there is a good chance that the object will remain intact.

Vinyl

Vinyl is another commonly used flooring material backed with a foam and has a cushioned and flexible surface. It is a great choice for sound reduction and although, it may be costly but what you get in terms of noise reduction is worth paying for. Vinyl is easy to apply on existing floor and significantly absorbs multiple sound waves. Top quality vinyl provides a nearly noiseless surface to the housing unit.

Conclusion

There are many soundproof floor materials available in the market. So when employing a housing renovation company make sure that you talk to them about your soundproofing needs so that they use the best quality of flooring material for your property. It is suggested to always employ a reputed multifamily housing renovation company to get quality results and long term returns on your investment.

Exterior Renovations: 3 Benefits Multifamily Housing Investors Can’t Ignore

Home exterior renovations are not just about enhancing the appeal of your home. Though looks aren’t everything when it comes to renting out a multifamily unit, it surely doesn’t hurt to have the prettiest property on the block. Moreover, your multifamily unit may have the most beautiful interior, but if its exterior is not in harmony, you may lose out on a good chunk of potential tenants. In this brief read, you will learn why exterior renovations are important for your multifamily housing unit.

1. Increased Rent
They say, “don’t judge a book by its cover”, unfortunately, that’s exactly what prospective tenants do, when it comes to renting a multifamily unit. Renovating your property not only enhances its curb appeal, but also puts it in line with the progressive expectations of tenants and their modern lifestyles. It helps your old property to stand at par with newly constructed modern rental properties that are asking much higher rents, making you a clear winner and giving you the option to increase rents.

2. Reduced Cost of Maintenance
Yes, exterior renovation projects actually enhance the life of your multifamily unit, averting the need of recurrent maintenance. Most of the multifamily unit owners now opt for vinyl siding that offers all the characteristics and appeal of wood, minus the worries of maintenance, rotting, splitting or insect damage. Moreover, vinyl siding never needs paint; if done right the first time, it will be there forever. It just requires periodic cleaning.

3. Faster Rent Outs
An unkempt property is often considered a potential hideout for intruders, which in turn makes tenants weary of the place. Overgrown bushes, feebly lighted walking arenas can make the unit look shady. Exterior renovation can fix these flaws, making it a much more appealing option for prospective tenants. Therefore, by improving the exterior of your multi-family housing unit, you are able to rent out units faster.

Conclusion
For multifamily housing owners and investors, the challenges are increasing by the day, with international behemoths setting up their colonies in all parts of the US. That’s the reason why an increasing number of stakeholders are investing in renovation, in a bid to keep pace with the rapidly changing trends in multifamily property business. Exterior renovations not only enhance the renting prospects of multifamily units, but also minimizes the maintenance cost.

Multifamily Housing: Paying Too Much in Energy Bills?

Energy bills, whether paid monthly or quarterly, are one of the major concerns of multifamily property owners and stakeholders, and in the absence of regular maintenance, the concern becomes graver. Minor maintenance needs may seem like negligible tasks that can be postponed for a later time, but in reality, as time passes, these minor problems often make a major difference to the overall energy efficiency and profitability of the property. Moreover, most of these minor repairs, if unattended, translate into substantial costs. Here, we will discuss five multifamily housing repair needs that influence energy efficiency of properties, and therefore, power bills. Let’s begin.

Roofing Problems
Roof is the one of the most essential parts of any building.  It is, therefore, necessary to address even minor issues in roofing system, before it requires expensive repairs. Calling a professional roofing service provider or home renovation company doesn’t always mean you need to get the roof revamped; rather, it allows you to make an informed decision to fix problems at the right time. As a precaution against heavy bills on roof replacement, inspect your building’s roof at least once in a month or two and if you notice any leaks, loose shingles, discolored spots or defaced patches, consult with a pro roofing service provider as soon as possible.

Drafty Windows and Doors
Cracks in old windows frames and doors may increase the energy bills as air enters inside the room through those cracks and disturbs the insulation. In addition, they reduce the aesthetic appeal or your multifamily housing unit making it less attractive to potential tenants. When you contact a professional renovation contractor, ask him for a thorough inspection of windows and doors for any such disturbing leakages.

Accumulated Rain Water
Rain water accumulation on the roofs, if unchecked, often leads to serious damages over time. Not only it can cause leakages, but unchecked water runway from roof to the ground can deface the exterior of the building. In addition, there might also be a case of soil erosion affecting the integrity of your multifamily property’s landscaping. Having a proper rain water harvesting facility in the building can help you manage the flow of rainwater from the roof.

Poor Insulation
Insulation helps in regulating indoor temperature throughout the year. Poor insulation inside multifamily housing unit can significantly increase the energy cost.  Lack of proper insulation means half of the energy used to regulate unit’s temperature is  lost, which in turn increases energy bills. Repairing the insulation system in your multifamily housing unit not only adds to the comfort level of the tenants residing there, but also allows you to save a lot on energy bills.

Unchecked Leaky Faucets and Toilets
Leaky faucets and toilets, if left unchecked for a long duration leads to water accumulation on the floor. It not only makes the floor messy and stinky, but also damages the whole flooring system as well as the walls of the building. If you notice a sudden hike in the water bill than usual, it is likely that there are some leakage issues in your multifamily housing units. To be on the safer side, call a plumber and make sure there are no hidden leaks inside the unit.

Conclusion
Home improvement repairs, if left unchecked, might cost you in the long run in the form of high energy bills. It is, therefore, important to get multifamily housing units inspected periodically to ensure that there is no pending repair. Hiring a professional multifamily housing renovation company ensures overall maintenance of your property in an efficient manner. Moreover, getting your rental property upgraded through renovation often results into increased business, as most tenants opt for well maintained and modern housing units.