Ideal number of units for new construction multi-family site?

Ideal number of units for new construction multi-family site?

Member since 2020 · 1 post · 0 votes

I've built several single family homes and duplexes but nothing bigger. I've got a multi-family site available that is zoned for up to 18 units per acre. First unit at 6,000 each, additional at 2,200 square feet. So 8 units would need 21,400 SF. If I build two 4-plexs (townhouse style) per 21,400 SF, I don't need to have a sprinkler system. I would build 2 bed/1.5 baths or 3 bed/2 baths. These would be rental units so the finishing would be pretty basic. Would building one 8-plex with a sprinkler system be cheaper than building two 4-plexes with no sprinklers? The 4-plexes have to be townhouse style, while the 8-plexes could be townhouse style or garden style. The townhouse style would be 2 or 3 beds and the garden style can be 1, 2 or 3 beds.

I could also go bigger and build 16, 20, 24, etc. units per building. 16 units will require 39,000 SF of land. How much cheaper per unit would it be compared to an 8 plex? How much cheaper per unit would be 24 units? Should I stick with 2 story buildings or go up to 3 stories?

8-plexes would be easier to sell in the future since more buyers would be able to afford them.

What is the optimal number of units where I can maximize economies of scale?

0Reply
109 views

2 Replies

Jump to latestLatest
  • Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    I think the answer is to build the maximum number in a single building you can afford, assuming your market can support that number of additional units.

  • Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Amar Pamma:

    I've built several single family homes and duplexes but nothing bigger. I've got a multi-family site available that is zoned for up to 18 units per acre. First unit at 6,000 each, additional at 2,200 square feet. So 8 units would need 21,400 SF. If I build two 4-plexs (townhouse style) per 21,400 SF, I don't need to have a sprinkler system. I would build 2 bed/1.5 baths or 3 bed/2 baths. These would be rental units so the finishing would be pretty basic. Would building one 8-plex with a sprinkler system be cheaper than building two 4-plexes with no sprinklers? The 4-plexes have to be townhouse style, while the 8-plexes could be townhouse style or garden style. The townhouse style would be 2 or 3 beds and the garden style can be 1, 2 or 3 beds.

    I could also go bigger and build 16, 20, 24, etc. units per building. 16 units will require 39,000 SF of land. How much cheaper per unit would it be compared to an 8 plex? How much cheaper per unit would be 24 units? Should I stick with 2 story buildings or go up to 3 stories?

    8-plexes would be easier to sell in the future since more buyers would be able to afford them.

    What is the optimal number of units where I can maximize economies of scale?

    You want to max out the property. The larger the building and more units under one roof the more cost effective the build per sqft.

    Best way to do cost analysis is to discuss with a builder who builds the types of buildings in your area and run the numbers.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.