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Balancing property capital projects into your multifamily portfolio is the perfect approach to driving a stable and growing revenue stream. Keeping multifamily residential communities current attracts more quality tenants in higher income brackets. All the while, effective budget management is a must for implementing capital projects across your multifamily portfolio. Renovating large communities is a major effort, understanding the why (and the how) is important.
Thoughtful property renovations keep you competitive in a flooded multifamily residential landscape with changing generational demographics, consumer demand, and tenant expectations. Keeping your properties up to date supports greater value and profitability while reducing costly tenant turnover and gaps in occupancy.
Property capital projects don’t just fuel greater tenant appeal, they can also future proof your multifamily portfolio with the latest technology. These technology updates increase tenant satisfaction by saving them money on utility bills and elevating their standard of living. Energy-efficient appliances, smart home features, upgraded windows, and quality insulation all lower costs while promoting a more sustainable environment—a growing focus for consumers.
There are a lot of complexities to navigate when it comes to budgeting at scale to position your capital project projects for success. These best practices can keep you aligned with your multifamily residential capital project and financial goals:
First, pinpoint the specific needs and priorities for property capital projects. Your assessment should take a complete inventory of unit conditions, common areas, and any shared, communal facilities.
Reference historical business data across similar projects, market trends, and industry benchmarks. These numbers help estimate accurate costs, anticipate potential obstacles, allocate resources efficiently, and make deliberate, informed decisions at scale.
Building material and equipment outages have been a regular occurrence over recent years with growing demand, inundated service vendors, and disrupted supply chains. You must plan ahead to prevent running over budget and out of resources. Incorporate a contingency plan into your budget to account for unexpected expenses or delays.
It’s critical to leverage your value and buying power with the weight of your multifamily portfolio while you’re vetting vendors and discussing terms. Negotiate favorable terms, bulk discounts, and long-term agreements to optimize costs. Evaluate your vendor performance routinely while seeking bids from multiple suppliers to ensure you're getting the best quality and lowest cost possible.
Identify the right project management and accounting software to track expenses, monitor progress, and generate real-time reports and insights. Cloud-based platforms empower greater collaboration across teams while driving transparency across your entire portfolio.
Even with higher upfront costs, investing in smart and green technologies can position your multifamily portfolio for a powerful ROI with less tenant turnover and higher property values. Green capital projects are becoming a baseline expectation for millennials and Gen Zers who now dominate the renter real estate market.
Manage expectations, prevent avoidable misunderstandings, and protect your brand reputation from a barrage of negative reviews online. Keep your tenants informed of capital project schedules and potential disruption to provide transparency and support. But don’t stop there. Solicit feedback from your tenants to identify areas for improvement for the current and future property renovation process.
Track expenses, identify plan disruptions or deviations, and find smart alternative routes forward when necessary with a robust reporting system. Real-time reporting keeps your projects on course with strategic and proactive decision-making.
After each project, run a thorough review to identify lessons learned and areas for improvement. Be sure to examine your budgeting and project management processes.
Effectively managing your multifamily portfolio capital project budgets at scale mandates a laser-focused and systematic approach. You and your property managers can act with confidence by applying data-driven decision-making, standardized processes, and a commitment to continuous improvement. Promote success across your capital projects by planning and actively incorporating your budgetary requirements to keep property upgrades on schedule and limit unnecessary community disruptions.
We lessen the complexities of multifamily residential capital projects. With access to our pre-qualified, national network of 30,000 vendors across 55 trades, you can ramp up your efforts sooner with our technology-powered services. You can keep capital projects moving on time and budget—manage work orders, optimize processes, and monitor costs all in one place on our One by Lessen platform.
Learn how to scale faster and seamlessly without displacing your tried-and-true legacy platforms.