Cost and Rental values for 2 story vs 3 story?

Question

Wonder if someone can give some guidance on the cost per foot on a 2 vs 3 story apartment complex? If it's $100/ft to do 2 stories, does the 3rd story increase that cost or decrease it due to not needing foundation work? Location is Vegas, flat land.

What about rental values? Do 3rd floor walkup apartments carry a lower value for typical renters? I did some brief research online but not enough to come up with a definitive answer. No real view to speak of, though I'm assuming top floor has the benefit of no noise from above. Real world experience answer anyone?

Nicholas B. · Answer

@Brian Burke That was my assumption too, it's a wash until you get to more than 3 floors. Enough SFRs have 3 floors including townhomes that are built economically that I'm guessing 3 floors may even end up being slightly cheaper.

In my site, 3 floors may end up being mandatory. I have very high density zoning for my neighborhood. See my next post..

It reminds me of trying to price out flat roofs vs pitched/A-frame roofs. Googling it shows an equal mix of people saying flat roofs and A-frames are more expensive.

Good idea on the rentals, I'll email a few complexes and ask and follow up here for anyone else that may be interested.

Brian Burke · Answer

I've never built more than two stories so perhaps there's a contractor on the forum that can give a more definitive answer...but in the discussions I've had with architects, engineers and contractors there doesn't seem to be a significant savings.  Sure you save foundation and roof, but the structural strengthening required to carry the added weight adds back.  Beefier foundations, heaver framing, beams, etc.

As to the rental value of a third floor unit, this could be the subject of lots of debate.  In some properties you'll see second floor units renting for less than first floor, and third floor renting for less than second floor.  In other properties, I've seen them all rent the same.  The advantage to top floor is you have no noise from above, the disadvantage is you have to climb stairs to come and go (and third floor is a lot of stairs).  In a retirement community, this would clearly be a scenario where lower rent for higher floors might come into play.  In a college town, maybe no one cares, or maybe the noise factor is actually a premium.  So the answer is, it depends.  The best way to find out might be to visit some nearby 3-story complexes posing as a prospective tenant and see how they are handling rates from one floor to another.