Multifamily construction projects are key to creating accessible housing no matter the area, offering options from small duplexes to large apartment developments. As the demand for housing continues to increase, building these types of homes has become more important than ever. Multifamily construction comes with its own set of challenges and opportunities. It’s crucial for builders, developers, and investors to understand how it works.

In this blog post, we’ll break down the different types of multifamily projects one might encounter, how to get started, and explain different management strategies. Whether you're new to this type of construction or looking to improve existing processes, this guide will provide more understanding. After reading this guide, you'll be more equipped to handle these projects with confidence.

What is Multifamily Construction?

Multifamily construction refers to construction projects that are built to house more than one family or unit. A multifamily construction project could be anything from large-scale apartment construction, to mixed-use buildings, to duplexes and townhomes. This type of construction shares characteristics of both residential and commercial construction, which can make it a great entry point regardless of existing experience.

It's no secret that the construction market consistently fluctuates. For contractors, branching out into multifamily construction can diversify their company’s portfolio, make it easier to respond to market changes, and ensure profits regardless of current demand.

These projects often offer higher returns on investment due to the number of units they can sell or rent out. Additionally, the need for multifamily housing is growing, especially in urban areas – making it a profitable and sustainable option for builders.

Types of Multifamily Projects

Each type of multifamily construction has its own unique design, target market, and construction considerations. Here are the 10 main categories of multifamily construction projects:

1. Apartments 

These are large buildings or complexes where multiple individual units are housed under one roof. Apartments are typically rented out to tenants, and the entire building is usually owned by a single entity. Oftentimes, apartment complex construction is not limited to the individual dwellings. To attract more tenants and increase renter retention, developers will choose to build additional amenities in the complex(es).

Common amenities in apartment complexes often include features like swimming pools, fitness centers, and communal lounges. These are all designed to enhance convenience, a sense of community, and comfort for the residents. Having to balance the construction of the living spaces with the other structures can add an extra level of complexity for the contractor. Apartment construction typically comes with a higher risk than other multifamily construction projects.

2. Condominiums (Condos)

Similar in structure to apartments, condos are units within a larger building or complex. The difference though, is each condo is individually owned. Owners share common areas and pay fees for maintenance. When building condos, the contractor or developer will often experience more direct communication with the tenant than with apartments. 

Since the units are individually owned, developers will oftentimes add opportunities for buyers to customize their space with selections. This customization can enhance buyer satisfaction and potentially increase the overall value of the property. However, this extra layer could be more of a challenge depending on the scale of the project and previous experience. 

3. Townhouses

These are multi-story homes that share one or more walls with adjacent units but have their own entrances. Townhouses are often individually owned and may be part of a larger development. Each unit usually comes with a small yard or patio, and sometimes a garage. 

Townhouses are a popular choice for people who want the feel of a single-family home but with less maintenance. Exterior upkeep is often managed by a homeowners' association. They are commonly found in urban or suburban developments, where they provide a balance between density and privacy.

4. Duplexes, Triplexes, and Quadplexes

These are small multifamily buildings that contain two (duplex), three (triplex), or four (quadplex) separate units. Each unit often has its own entrance, and these buildings can be rented or owned. They are commonly found in residential neighborhoods. This offers a more intimate and manageable scale compared to larger apartment complexes. 

They also provide a sense of community and privacy while still being part of a larger building. These buildings are ideal for investors looking for rental properties. They are also a great starting point for residential builders looking to branch out into the multifamily industry.

5. Garden Apartments: 

Typically found in suburban areas, garden apartments are low-rise buildings (usually two to three stories) with multiple units. They often include outdoor spaces like gardens or courtyards. Garden apartments are designed to blend with the surrounding landscape. They often feature landscaped grounds, walking paths, and outdoor amenities such as barbecue areas or playgrounds.

These buildings emphasize an open and natural setting. Compared to high-density urban complexes, these offer a quieter and more spacious living environment. Garden apartments are popular with families and individuals who enjoy having access to green spaces while still being close to urban conveniences. 

6. High-Rise Apartments/Condos

These are tall buildings, usually more than seven stories, that contain a large number of residential units. High-rises are common in urban areas and can be either rental apartments or individually owned condos. Because of their height, high-rises often feature impressive views of the city or surrounding landscapes. 

They typically include amenities like rooftop decks, fitness centers, and concierge services to enhance the living experience. The buildings are often equipped with things like advanced security systems and high-speed elevators. Because of the scope, building high-rise apartment buildings may be more familiar to commercial builders than other multifamily construction options.

7. Mixed-Use Developments 

These are buildings or complexes that combine residential units with commercial spaces like shops, restaurants, or offices. Mixed-use developments are often found in urban centers and provide residents with convenient access to amenities. They often include features such as street-level retail, dining options, and professional services, enhancing the overall convenience and appeal of the area. 

Mixed-use developments also contribute to urban revitalization by attracting businesses and creating lively, bustling neighborhoods. These developments can foster a sense of community and reduce reliance on cars for more sustainable living. For contractors, balancing the commercial spaces and residential units in one project offers a unique perspective to construction projects. Contractors will likely have to work with a number of buyers and/or investors throughout the project.

8. Cooperative Housing (Co-ops) 

In co-ops, residents don't own their individual units outright. Instead, they purchase shares in a cooperative corporation that owns the entire building. Each share represents a portion of the building's overall value and grants the shareholder the right to occupy a specific unit. The number of shares a resident owns typically corresponds to the size and value of their unit, so larger or more valuable units require more shares.

As shareholders, residents help make decisions and pay monthly fees for building maintenance, covering utilities, property taxes, and repairs. Instead of owning a deed, they have a proprietary lease that allows them to live in their unit. This setup fosters a sense of community and shared responsibility, with building decisions made collectively by the shareholders.

9. Student Housing

Designed specifically for college or university students, these can range from dormitory-style buildings to apartment complexes with shared or individual living spaces. Student housing often includes communal areas like study lounges, recreational rooms, and sometimes dining facilities to cater to the needs of students. 

These accommodations are usually located close to campus to provide convenience and support an engaging academic and social environment. Additionally, student housing may offer specialized services such as academic support, tutoring, and extracurricular activities to enhance the overall college experience. Individual universities or local governments may also offer special initiatives for student housing construction.

10. Senior Living Communities 

These multifamily buildings cater to older adults, and may include amenities and services tailored to the needs of seniors, such as assisted living or independent living facilities. They are designed with accessibility in mind, featuring features like wheelchair ramps, grab bars, and emergency alert systems. 

These communities often offer on-site healthcare services, wellness programs, and social activities to support a healthy and active lifestyle. Additionally, they may provide amenities such as meal plans, housekeeping, and transportation services to make daily living more convenient and enjoyable for residents.

Getting Started

The key to any successful construction project is making the right preparations.

Financing

Start by developing a comprehensive financial plan that includes detailed estimates of construction costs, potential revenue, and a budget for unexpected expenses. Explore various funding sources such as traditional bank loans, private investors, or government grants and incentives. 

Present a clear and compelling business case to potential lenders or investors, highlighting the project's profitability and market demand. Securing funding often requires a solid track record of successful projects and a well-prepared business plan. By using construction management software to manage projects, financial management from the start can be done all in one place.

Scope of Work

Another essential preparation is writing out a detailed scope of work. This document outlines all aspects of the construction project, including design specifications, materials, timelines, and the roles and responsibilities of all parties involved. The scope of work should clearly define project objectives, deliverables, and performance standards to avoid misunderstandings and ensure that all stakeholders are aligned. 

It acts as a roadmap for the project, helping to manage expectations and guide the construction process. Additionally, a well-defined scope of work helps in obtaining accurate bids from contractors and suppliers, as it provides a clear picture of what needs to be accomplished. By thoroughly preparing and documenting these elements, one can set a solid foundation for a successful multifamily construction project. 

Not sure where to start? No problem. Download our free Scope of Work Template below:

Estimating for Multifamily Construction

All contractors know the importance of an accurate and detailed estimate. However, estimating for a multifamily construction project can have its own unique challenges that need careful planning. One major challenge is figuring out costs for many units, as each unit might have different needs, depending on the scale and scope of the project. 

It is important to decide upfront how the estimate will be organized. Like every construction estimate, the levels of organization depends on the company’s preferences and project scope. We recommend organizing estimates by categories and subcategories.

After the structure is laid out, be sure to include as much detail as possible as line items are added. Included in these details can be building number, floor number, item classification, assigned resource, and more. Using a template can be a great starting point.

Unlike single-family homes, multifamily projects have multiple units and shared areas, so it’s important to break down the project into smaller parts like individual buildings or floors, common areas, and amenities. This helps create a more accurate cost estimate, catch potential issues early, and easily track the project.

For more tips on managing construction estimates, check out these blog posts:

• The Complete Guide to Residential Construction Estimating
• 6 Crucial Skills of a Successful Construction Estimator
• The Complete Guide to Commercial Construction Estimating

The Importance of Project Tracking

Project tracking is important for all construction projects. However, the larger the project scope is, the higher importance is placed on proper construction project management. This is often because more parties are involved, whether this be investors, external developers, real estate professionals, or even clients and subcontractors. 

Multifamily projects involve many different people, like developers, property managers, and investors, each with their own needs and expectations. Keeping everyone on the same page and updating them regularly is crucial. Clear communication and detailed records help make sure that all parties understand the costs and any changes.

Project stakeholders require detailed documentation to ensure their investment into the construction company is justified. This can be in the form of daily or weekly reports, walkthroughs, and more. By effectively using construction management software project tracking, the software can generate these reports with the click of a button. Each of these features work well to satisfy stakeholders and ultimately secure a successful project. 

• Scheduling: used to map out the entire project from start to finish. Assign resources, add attachments, and 
• Daily Logging: used for documenting project progress with details about workers involved, hours worked, and any issues that may arise. Mobile app access makes this project logging accessible for everyone involved.
• Checklists: used to organize simple tasks, track daily activities, and ensure quality and safety.
• Punch Lists: similar to checklists in function, but used for final closeout tasks like inspections and walkthroughs.
• To Do Lists: one-off tasks that may not be included in the project schedule, but are important to complete regardless. Check out ConstructionOnline’s brand new to-do list management feature, and start using ConstructionOnline To Dos for free today!
• Submittals: used to communicate important project scope or material details between the contractor and other external participating parties.
• RFIs: used to gather specific details and/or clarifications from external parties involved with the project.

Managing Multifamily Construction Projects

Managing multiple multifamily construction projects at the same time can be challenging, but careful planning and organization can make the process more manageable. Start by prioritizing and planning each project, creating detailed schedules and allocating resources effectively. 

Depending on the scope of the project, project managers may opt for managing each building or unit within a single multifamily project as its own project. Sometimes, project managers may choose to separate the projects by phase. The entire project could even be managed all in one. It all depends on the contractor’s preference.

Regardless, it is important to use project management software no matter how these projects are organized. Utilize project management software to track progress, manage tasks, and streamline communication. More tips on managing multiple construction projects simultaneously can be found here: How To Manage Multiple Construction Projects Simultaneously.

Using analytic tools that can evaluate the success of construction projects is a revolutionary way to use technology. These tools can identify slippage, financial overages, and more with just a quick click of a button. All of these project analytic tools can be found with ConstructionOnline’s TrueVision Business Intelligence, or download our free project health scorecard template below.

Using Construction Management Software

Managing construction projects is prone to small mistakes that can have lasting effects. Construction management software is designed to eliminate the small mistakes, improve financial visibility and management capabilities, and automate miniscule tasks to leave more time for strategic opportunities.

Financial Management and Visibility

While spreadsheets may work just fine, small calculation errors are extremely common. With construction estimating software, the formulas and columns are already built-in. Use a familiar interface to input unit costs, quantities, and multipliers, and watch the software calculate costs in seconds. With item classifications, multifamily-specific column view options, and costbook assemblies, detailed financial insights are available with just a few clicks.

Financial success with a project does not end with the estimate. Things like change orders, client selections, takeoffs, invoices, and accounting integration are all crucial to manage and track. Construction estimating software has these figures available and manageable in one place. 

Easily Trackable Schedules

Manually tracking a project schedule and sending reminders are of the past. Construction scheduling software allows users to input the schedule, assign resources, and the software will do the rest. Not only can users set notification parameters, but they can check the status of the schedule in one quick overview. With critical path tools and task predecessors, the schedule is easily manageable from start to finish.

Document Management and Reporting

Construction reporting software opens up opportunities to quickly generate the project reports that may be needed for multifamily projects. Additional reports for estimating, accounting integration, sales management, and other business analytics offer new insights into managing projects. These insights are crucial for project and overall company success.

Find more tips for managing project success here: 6 Ways to Accurately Measure Construction Project Success.

Mobile Access

Managing projects from the field is just as important as from the office. Having easy mobile access ensures better task management, accurate progress documentation, and more project visibility with photos. Staying connected with communication tools and real-time updates is crucial. Mobile access to construction management software simplifies time tracking, task management, project logging, and more.

The Top Solution

Find all of these features and more with the #1-rated solution in the industry – ConstructionOnline. ConstructionOnline offers flexible construction management tools, designed for all different types of construction – residential, commercial, specialty, and multifamily. With the cutting-edge construction estimating software tools available, combined with industry-leading project tracking and communication tools, a company’s multifamily construction project is set up for success from the start.

Check out ConstructionOnline for free today, or contact a product specialist via the yellow chat bubble on the page for more info in seconds!

Key Takeaways >

> When considering multifamily construction projects, there are unique challenges due to the nature of the projects.

> Multifamily projects can open up new opportunities for both residential and commercial builders for more profits, portfolio diversity, and as a response to market changes.

> Multifamily construction encompasses a wide range of different types of residential structures.

> Managing estimates for multifamily construction projects can be difficult depending on the scope of the project and the size of the estimate. Organizing estimates by building, floor, or phase can help with building the estimate.

> Effective and constant project tracking is crucial to satisfy project stakeholders and ensure success.

> Business analytic tools deliver new insights into project data that revolutionize project management.

> Use the top rated construction management software, ConstructionOnline, to never lose a step while managing any construction project.