“Getting To Know The Different Types Of Multi-Family Rental Buildings”
Are you aware there are seven different types of multi-family rental buildings?
You need to know about these different types of buildings when planning your business strategy. That way you can be sure to pick the right building type to either own or to include in your property management strategy. Not all may fit into your strategy as they have different requirements.
That’s why today I want to discuss the different types of rental buildings. We will talk about the advantages and disadvantages of each of the seven types of rental buildings on our list.
7 Types Of Rental Buildings
There are seven different types of rental buildings that are separated by age, size and uses. Most of these types can be commonly found in a busy city just like Manhattan or Los Angeles.
But before anything else, let’s find out what exactly designates a building as a rental building first.
What Are Rental Buildings
Rental buildings are buildings that are entirely owned by a landlord or a property manager and almost all of its rooms or apartments are available for lease. It’s a building property where tenants pay rent to the owner in exchange for staying in.
Rental buildings are classified into 7 different types of building categories that are used for different purposes. As the property manager, it is important to know which category your rental building property falls into as this will help you to advertise or market your rentals easily and maintain its good condition.
Here are the 7 types of rental buildings and what makes them different from each other…
1. Modern Buildings
These are buildings that were constructed after the year 2000. These buildings usually have the highest level of building amenities and apartment renovations. Since they are the newest and built up to the most recent building standards they are commonly able to charge the highest amount of rent per square foot.
Here are the advantages and disadvantages of having modern buildings in your rental business:
These buildings are often designed as mixed-use buildings meaning they are perfect for different types of businesses as well as individual private tenant rentals.
Modern buildings normally offer world-class amenities like health clubs, tenant lounges, swimming pools, children’s playrooms, golf simulators, pet spas, steam rooms and saunas, bowling alleys, rock-climbing walls, roof decks, and outdoor areas. The apartments for a living are normally built as world-class modern and are highly sought after for rentals. Additionally, the office space available normally comes with high building security and includes all the amenities that the building offers for a cost.
These buildings are the costliest rental apartments and it is smaller compared to other types of apartments. Tenants are basically responsible for paying for the maintenance of all the building amenities that are present. These payments are normally called condominium or association fees that can be very high and require high-income renters as a result.
Additionally, since these buildings are built with such high standards they are normally offered as a mix of apartments for rent as well as condominium or apartments that can be purchased by individual tenants. Most of these buildings can be found in neighborhoods that aren’t centrally located.
Running a modern building classification will require you to find high-income renters and/or high-income Real Estate investors to buy the individual units. In running a property management business this is both an advantage and disadvantage if you’re not prepared to sell real estate…
2. Post-War Buildings
Post-War Buildings were constructed after World War II between the 1940s and 1970s. These buildings are usually high-rise and are built with white, red or brown bricks. Often these buildings are renovated and made to look modern in appearance and by adding amenities. Post-War apartments are usually convenient for renters as most of these apartments are spacious and it has ample closets, a live-inÂ superintendent, and laundry facilities.
Here are the advantages and disadvantages of having Post-War Buildings:
These buildings are designed to have larger floor plans and plenty of storage space and it is more affordable than modern buildings. Post-War buildings can offer gyms, tenant lounges, and other amenities and also, these are doorman elevator buildings.
Construction of these building types was cheaper than modern buildings so expect some shortcomings. Post-War buildings are commonly known as “cookie-cutter” apartments because each apartment is the same size and shape and the apartments seem to lack a “charm factor”. Normally the building amenities are not as luxurious compared to those in modern buildings.
3. Pre-War Buildings
Pre-War buildings are the oldest buildings as they were built before the 1940s and World War II. The main characteristic of these buildings is they commonly have 10-20 stories and have roomy apartment layouts.
These buildings were constructed with outdated building standards and have been retrofitted or updated to meet present building codes. Additionally, these buildings have architectural amenities with features like large rooms, fireplaces, and hardwood parquet floors and high ceilings. These spacious apartments lack the modern amenities making them a cheaper rental than modern buildings.
Here are the advantages and disadvantages of pre-War buildings
These are attractive buildings were constructed using thick hardwood floors, cherry wood moldings, and a lot more appealing details. Most of these buildings have already been retrofitted to today’s building standards so you normally wouldn’t have to commit to upgrading the building structure.
Since the building was constructed with apartments that have an old home feel these are often easier to rent than high-cost modern building apartments.
The appealing details of these buildings make these building costly and it is expensive to restore. They would have normally been built using steam to heat with no central air for individual units. So the old design and layout may cause the steam heat to produce banging noises during winter. Plumbing may give overwhelming bursts of hot and cold water. Often times the interiors, plumbing, and heating are outdated and needing renovation. If the entire building needs to be retrofitted and renovated the costs to do this can be astronomical.
4. Mid-Rise Elevator
These are the buildings that are constructed after World War II and may have several elevators servicing tenants and building staff. These types of buildings are easily recognizable because of its red bricks used when constructing them.
Normally, these buildings are constructed well and offer one of the cheapest rental buildings. People who are looking for apartments usually look for mid-rise elevator buildings because of the lower cost of rentals.
Having a midrise elevator type of building to manage as a property management company may cause you a lot of minimum problems. Since these buildings are older they will constantly be needing small or large fixes. Most of these buildings may look and feel “older”… because they are old. Often these buildings lake amenities and can be harder to manage.
The absence of a doorman will cause your tenants to get their own packages.
5. Brownstones or Townhouses
Brownstones or townhouses are commonly built with four to six floors in the 1800s until the early 1900s. The size of this rental building is usually 25 feet wide and 100 feet deep and its common features are its 12 to 14-foot ceilings and built-in fireplaces.
The term “brownstone” is known as the type of material that was used as the facing on the front of the structure. These buildings are either single family houses or buildings that were turned into multiple apartments. Some apartments or townhouses can offer majestic living spaces but it is expensive to rent.
As the property owner (or manager), you can make the most of your brownstones or townhouses and make it profitable.
These types of building construction have come back into style and many new buildings are built looking like a brownstone constructed buildings. These newer constructed buildings normally have modern and up to date building and amenities standards making them more sought after rentals.
Keep in mind that your buildings need continual renovations and repairs. They will also need to be retrofitted because they are older. Their appearance may also a concern: usually, the bottom floor can be dark while the building gets brighter the higher up you go.
Lofts are buildings that are formerly constructed for commercial or manufacturing purposes. But they were renovated to be used for resident living spaces. These buildings have large, open living spaces that have high ceilings, and regularly have exposed pipes and beams. Lofts can also be seen with details like supporting columns, tin ceilings, etc.
Most lofts have the largest floor plans and it can offer plenty of rooms to its renters. The buildings may have plenty of amenities. Normally renters can renovate or design their own living and working spaces in lofts making those types of rentals highly sought after.
Open floor plan tends to have no clearly marked bounded space for the sleeping area. Building tends to be drafty and unfinished making them often times look like storage units instead of apartments that can be rented. Lofts normally do not have services of a doorman and building amenities are often limited.
These buildings were constructed before the 1900s. Walk-Ups are normally around 5-7 stories tall and can be found in some of New York City’s oldest neighborhoods.
These buildings have some charm and appeal because of the style. These type of rentals are normally the cheapest and most sought after because of the location of the building.
This type of rental building has no elevator and that’s why it’s called “walk-up”. Usually, these buildings are not visually appealing and are not elegant like traditional brownstones or townhouses but it was the most affordable options for renters. Even if these buildings are old, it was regularly renovated by its owners.
These buildings are over a hundred years old so expect some problems. The apartments are small and it has inadequate closet space and with no amenities. Walk-ups have no elevators and there is no database that provides where anyone can find this type of building.
Final Thoughts About 7 Types Of Rental Buildings
Learning the different types of rental buildings can help you better decide what to include in your portfolio. That way you can best decide which ones you want to work with (and which ones to avoid). Understanding the advantages and disadvantages of these properties so that it can help you plan your business strategies better.
If you have questions, please leave them in the comments section below.
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