By Claude Boiron
Multi-family buildings can range from low (one to four storeys) to very tall (30 to 40 stories, or even more) and from apartment buildings to townhouses, to garden homes. To be called multi-family, a complex would have to be comprised of over three units (a two-unit building is called a duplex). Residential condominium buildings are multi-family, but the form of ownership falls into a different category. Small multi-family buildings (from 3 to 12 units) are frequently called “x”-plexes. For example, a six-apartment building will be called a “six-plex”.
Buying, Selling and Leasing
A building will be more desirable if it is within easy walking distance of a community centre, tennis courts, churches, a park, etc., as well as schools (primary and secondary) if you have apartments with several bedrooms.
Proximity to water (a lake, river, ocean) also adds desirability for many people.
Sufficient parking is the major factor to consider when evaluating the land use for a multi-family residential building, but other amenities can attract more desirable tenants.
There should be parking spaces in sufficient number for tenants and for visitors. This is often not the case. The ratio, that is the number of parking spaces per apartment, varies with the level of luxury and type of apartments (one, two, or three bedrooms) and the requirements of the municipal zoning by-law.
(b) Underground Parking
If there is underground parking, make sure that before you buy such a building you check the condition of the parking structure. Up to a few years ago, particularly in cold countries such as Canada or the northern US, when concrete floors of parking garage structures were poured during winter months, additives frequently were mixed with the cement in order to prevent it from freezing. Many of these additives were salt based that, over many years, led to corrosion of the reinforcing steel bars (rebar) inside the concrete. Also, the surface of any multilevel parking garage should be treated so that it is impervious to water and salt, if any is used in that area. To avoid this problem today, contractors use epoxy coated rebar, galvanized rebar, or stainless steel rebar.
(c) Other Amenities
There are a number of other amenities that make an apartment more attractive to tenants, including things as simple and inexpensive as picnic tables. If the property allows it, it is ideal to have a few picnic tables and barbecues on the lawn. It is even more ideal if there are trees to protect tenants from the sun. People will also pay a premium for a view, particularly over greenery and water. In fact, rentals or prices for suites with a view increase with the height of the apartment or condominium.
The exterior of a multi-family building needs to include practical, safe, and pleasing features.
If there are balconies, it is ideal that the vertical portion facing the street be made of either solid material or translucent (not transparent) glass with a space of no more than 2.5 cm (1 in) between the floor of the balcony and the fronting. Most apartment dwellers use their balconies as storage and it makes for unsightly views and, as a consequence, detracts from the aesthetic appeal of the building. A further improvement, pioneered by a Finnish company, is a retractable glazing system that permits enclosing balconies. The safety glass panels can be partially or completely opened, as desired.
(b) Access Control System
The building should have an electrically controlled front door latch so that strangers cannot walk in (unless, of course, they follow right on the heels of a tenant). It is ideal that there be an intercom system allowing the visitor to call a tenant and announce himself in order to have the door opened.
A useful and very reassuring feature is a network of surveillance cameras.
All apartment buildings should have an attractive, intelligent, and easily remembered name.
While you will want to be able to check on the condition of individual units, the areas that will concern you most in a multi-family building will be the common areas. You want to see if these areas are practical, need work, or allow for renovations, such as the addition of a laundry room.
An attractive lobby is a big asset to an apartment building, as is a concierge/security guard, if the size of the building justifies it.
(b) Building Amenities
There are many amenities that can be added to a building in order to attract tenants.
• Fitness Centre. If the building’s size can justify it, a fitness room attracts many tenants, even if it is small and equipped with only a few treadmills and exercise bikes. Since many tenants will not use it more than four times per year, the upkeep is minimal.
• Party Room. Again, if the building is large enough to permit it, a party room will attract tenants.
• Swimming Pool. A swimming pool is usually considered an asset to attract tenants, however, it presents a number of concerns for a landlord. If it is outdoors, it can be used only a few months of the year in northern climates and becomes a costly expense. This frequently means it is poorly maintained. If indoors, a pool is expensive to maintain and can cause corrosion and humidity in the building. It also drives up insurance rates because of public liability, which is why diving boards are often eliminated.
Hallway appearance is difficult to treat in a building. In a large building, they can be very long and almost unpleasant. Quality broadloom design, painting, and lighting can make a big difference. Most buildings use very low wattage, incandescent bulbs in their hallways and the result is poor. It is much better to use energy efficient fluorescent lamps of sufficient wattage, which give off a brighter light at a lower cost.
Ideally, as a landlord you want each apartment to have separate electrical and gas meters. Insulation, for both temperature and noise, should have good values.
OTHER FACTORS FOR CONSIDERATION
(a) Walk-up Buildings
Buildings of two, three, or four storeys that are not equipped with elevators are called “walk-ups”. They are much less desirable than buildings with elevators because they are usually older and physically challenged people and the elderly cannot rent the upper floor apartments.
(b) Suite Mix
The ideal mix of suites (e.g., one bedroom, two bedrooms, etc.) will vary with the type and location of the building. Most landlords prefer a large majority of two-bedroom units. However, suites can range from mini-bachelors (32.5 m2 +/- (350 sq. ft.)) to four bedrooms, which are rare. Most commonly, in apartment buildings one finds one- and two-bedroom suites. If you are considering buying a building, find out the average area of the suites. Some older apartments have huge suites, while some newer suites are so small that one can hardly put a chair in the bedroom.
Claude Boiron sells commercial and residential real estate; he teaches the subjects at the University of Toronto and various workshops and seminars. Reach Claude at firstname.lastname@example.org