How to Choose the Right Multifamily General Contractor
There are multiple factors that can influence the success of a multifamily project. One of those success factors is your choice of a multifamily general contractor. A contractor isn’t just a builder. They are who you choose to partner with to bring your vision of your community to life.
Their experience and expertise are crucial, as choosing the wrong contractor can delay a project but also cause it to go over budget or stall it indefinitely. For a multifamily investment company, this is especially crucial, as they have a list of investors to whom they are accountable. Hence, every penny spent matters.
Newer investors in the multifamily space should note that multifamily construction is completely different from traditional single-family homes. For starters, they are:
- Typically treated as commercial constructions: One might think that due to them housing multiple families, multifamily communities would be automatically classified as residential constructions. This is simply not the case because the intent of the property matters. In the construction and investment world, these communities are considered commercial property. A multifamily general contractor would note the scale, complexity, and building codes and regulations they have to adhere to make such a construction a commercial one.
- Mostly investment-driven: Return on Investment (ROI) is a crucial metric for any investor, whether big or small. Most investors in the multifamily space are looking for the most ROI, hence why it is essential to choose a competent multifamily general contractor to work with. Of course, one would need to carefully consider the location of their project and other relevant factors. This is why choosing a multifamily data provider, such as SMART Apartment Data, should also be considered.
- Varied in terms of housing type: A multifamily community can be built differently according to the lifestyles and budgets of its potential residents. Also, the size of the land and the zoning regulations can have an impact on the type of housing. These types of housing can be:
- Duplexes, triplexes, and quadplexes: These are communities consisting of two, three, and four housing units, respectively.
- Condominiums: Also referred to as condos, these are buildings where each unit is individually owned, but there are shared amenities, such as swimming pools or gyms.
- Apartment buildings: Unlike condos, an apartment building can vary in size and is owned by a single entity, with each unit being rented out to individual tenants.
- Townhouses: These are terraced houses that share adjoining walls. In the US, townhomes are a trending build , with many gearing towards single-family homes that are built-to-rent.
- Varied in terms of structure type: When exploring various housing options, it’s important to also consider the diverse structural types available for construction by a multifamily general contractor. These structure types are:
- Low-rise: These are multifamily properties with four or fewer floors. They are mostly found in suburban areas, and offer a more intimate community feel for the residents. Due to their size, they offer larger living spaces and more outdoor areas.
- Mid-rise: These have five to nine floors and are found in urban and suburban areas. They have more units than low-rises.
- High-rise: Found in major cities, they have 10+ floors, necessitating the need for elevators. They have a large number of residents, with some having shared spaces, such as gyms.
- Mixed-use: There has been a recent increase in these types of multifamily properties. As the name suggests, mixed-use buildings serve both families and commercial businesses. Usually, the ground floors are allocated to commercial activities, while higher floors are residential spaces.
Now that we have a better understanding of different building types, we can now dive deeper into the role of a multifamily general contractor.
Understanding the Role of a Multifamily Construction General Contractor
We now understand the different structure types that we may witness during multifamily construction. Now, what exactly does a multifamily general contractor do other than the obvious task of constructing a building?
- Collaborating on design: One of the primary responsibilities of a general contractor is to work closely with the project’s architect. This collaboration is not just about executing the architect’s vision but also about suggesting changes and implementing improvements. The best multifamily contractors will make recommendations that can save time, reduce costs, and minimize risks and safety hazards.
- Obtaining permits: Permits are a must-have before any construction project can begin. This task falls on the multifamily general contractor. An example includes a commercial site new construction permit.
- Observing zoning and building codes: Aside from obtaining permits, it is the contractor’s responsibility to ensure the project adheres to all zoning and building codes. While the architect creates the blueprint, the contractor ensures the project meets all the building codes. Therefore, they will collaborate with the architect to make any changes as needed.
- Purchasing the needed onsite equipment and materials: The cost of materials will typically be included in the contractor quote. It is important to review the quote carefully and seek advice if there are any concerns.
One should always remember that the contractor—if chosen well—is the expert, and they will recommend the best materials for your multifamily property. As tempting as it may be, do not automatically opt for cheaper materials in an effort to cut costs. If you feel that the costs are too high, talk to your multifamily general contractor to find ways to reduce costs while not compromising on the safety and longevity of the building.
The above responsibilities show just how indispensable a multifamily contractor can be. Should you choose the right one, you will enjoy:
- Professional handling of unexpected changes
- Diverse expertise with a wide range of skills, creativity, and flexibility
- Clear communication and consistency that results in a trustworthy partnership
Reach out to us to unlock the most comprehensive source of multifamily data and elevate your business insights.
How To Choose the Best Multifamily General Contractors for Your Projects
Before we dive into the specifics of what to look for in multifamily general contractors, we must mention an absolute core starting point: ensuring that the contractor is licensed, bonded, and insured. Here’s why:
- State licensing ensures professionalism and competence: Contractors are licensed by state boards or agencies, which means they must meet specific criteria and qualifications set by the state. This licensing process ensures that the multifamily general contractor meets all set requirements to handle construction projects.
- Bonding provides protection against financial risks: A general contractor bond is a form of financial assurance that guarantees the terms of a contract will be met by the contractor. This bond is not directly acquired from a bank or financial institution but rather from a surety company, which guarantees payment for any claims. If, at any point during a multifamily construction, the contractor fails to cover the permit costs, wages, or any other costs, the bond will cover these costs. This means that multifamily investors don’t have to worry about sudden out-of-pocket costs during the multifamily construction process.
- Insurance covers any unexpected liabilities: All construction projects come with risks. Accidents can happen, and workplace injuries may occur. In such cases, you want to have an insured multifamily general contractor, as their insurance coverage will handle any sudden and unexpected events. This means that you will not be held financially responsible for any accidents that occur during the construction process.
With that out of the way, how do you choose the best multifamily general contractor for your project?
- Evaluate multiple bids: Don’t just jump at the lowest price. While it might be tempting to save some money upfront, the lowest bid doesn’t always equate to the best value. It’s crucial to evaluate multiple bids and weigh the pros and cons of each.
- Check their experience: Ensure that the contractor you’re considering has direct experience with multifamily projects. A contractor with a diverse portfolio can navigate various challenges and bring innovative solutions to the table.
- Check the experience of the oversight team: The project manager and superintendent play pivotal roles in the construction process. Ensure that these key team members have hands-on experience with multifamily projects to guarantee smooth operations.
- Inquire about subcontractors: The subcontractors’ expertise can make or break your project. Ask the general contractor about the experience of their subcontractors, the duration of their association, and the measures in place to ensure quality work.
- Verify timetable feasibility: A reliable contractor will provide feedback on the feasibility of your proposed timetable. They should also have the bandwidth to accommodate your project’s timeframe, ensuring no unnecessary delays.
- Obtain work guarantees: Understand the guarantees offered by the contractor. This includes deliverables, timelines, and their approach to addressing concerns. Quality assurance measures are a testament to their commitment to excellence.
- Ensure clear communication: Regular updates on your project’s progress are essential. Determine the contractor’s communication channels and frequency. It’s beneficial to partner with a contractor whose communication style resonates with your own, ensuring transparency and trust.
- Conduct reference checks: Last but certainly not least, always check their references. Aim to get feedback from clients who have had similar projects. This will give you a clearer picture of the contractor’s capabilities and reliability.
Are You Considering Remodelling and Need a General Contractor? Here’s How SMART Apartment Data Can Help
SMART Apartment Data offers you unparalleled data intelligence tailored for the multifamily space. Whether you’re an owner, an investor, or a property management company, SMART Apartment Data’s multifamily analytics software empowers you to:
- Track performance: Monitor how your properties are performing in real-time, allowing for timely interventions and strategy tweaks.
- Evaluate strategies: Are your current strategies yielding the desired results? Dive deep into the data to find out.
- Discover investment opportunities: The real estate landscape is vast, but not every opportunity is golden. With SMART Apartment Data, you can sift through the noise and pinpoint areas ripe for investment.
- Assess property amenities: Gain insights into the different amenities offered by properties. This data can help in understanding tenant preferences and market trends, enabling more informed decisions about property enhancements and marketing strategies.
- Monitor renovation timelines: Keep track of the time since the last renovation for each property. This information is crucial for planning future renovations, budgeting, and ensuring that properties remain competitive and appealing in the market.”
You are also likely to benefit from reports on:
- Property submarkets: Understand the nuances of different submarkets to make informed decisions.
- Occupancies: Track occupancy rates to gauge the demand in a particular area.
- Floorplan level rents: Get insights into how different floor plans are priced in the market.
- Concessions: Stay updated on the latest concessions being offered, ensuring you remain competitive.
Having all of this information in your arsenal allows you to make an informed decision, whether you’re an investor or a property management company. With SMART Apartment Data, you’re not just staying ahead of the curve—you’re defining it.
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