How much does it cost to build an apartment complex? It’s a common question, and one that comes with an unfortunate, vague answer: it depends. Giving you an accurate estimate about the costs of your apartment complex construction project is next to impossible, as it depends on a number of variables.
Still, before beginning work on the project, you need to have a rough idea of where to start. To help you get there, here are 4 of the variables that play into your building project:
1) Your Location
It might seem obvious, but the location in which you want to build your apartment complex is the number one variable determining the cost of the project. Costs vary greatly throughout the country, as this estimator by Fixr shows.
The reason for that variation depends on a number of sub-variables. Building permits, for example, cost more in some locations than others. The same is true for materials and professional help. But perhaps the biggest variant is the exact building location and the land on which it’s built, which can range from affordable to pricey based on the surrounding neighborhood and local area.
2) The Number of Units
Of course, how big your intended apartment complex will be also plays into the equation. Cost for these construction projects is usually calculated by the unit, which typically costs between $64,000 and $86,000 to build. Multiplying that number by 10 is significantly different than multiplying it by 5 for a small apartment complex.
3) Quality of Materials
Part of the reason for the variance above is the quality of materials you plan on using for your project. Are you building college student apartments, or luxury apartments that require higher-end appliances, built-ins, and other features? Depending on your choice, the material costs vary drastically.
Of course, these costs also increase exponentially as the total number of apartment units rises. For example, a set of high-end kitchen appliances may only cost $5,000 more than their low-end counterpart. However, multiply that by 10 units and you will get an added cost of $50,000 to your apartment complex construction project.
Whether that added cost is worth it, of course, depends on the goal you have for your build. Your apartments need to adhere and cater to the audience they will be likely to attract. Naturally, luxury apartments in a low-income neighborhood make little sense. Doing initial research to determine your ideal audience before calculating the potential cost can be beneficial.
4) Working with Experts
Finally, an important variable to consider for your construction project are the people with whom you’re working. In the course of the project, you may engage architects, contractors, and interior designers. Together, they can rack up a considerable bill that will impact the cost and profitability of your apartment complex.
To make sure that cost is a worthy investment, you have to make sure to work with experts in their field who know how to help you build apartments that are sure to attract the desired tenants. They also have to be able to work together seamlessly, handing off work and adjusting if any unforeseen issues come up.
One way to simplify the process and save costs is to work with a construction company that can occupy multiple roles. If, for example, you find a design-build contractor, you can reduce the number of entities with a stake in the process. As a result, you will have to pay less people, while ensuring consistency throughout the building process.
If you are planning to build an apartment complex in Minnesota, we’d love to hear from you. Estimating the costs without the above variables is difficult, but we can talk to you to give you a better idea of where you stand. Contact us to get in touch.