Building an apartment building is a complex and costly undertaking. The cost depends on various factors such as the size, location, materials used, and the number of units. In this article, we will explore the different aspects of apartment building construction costs and provide you with valuable insights.
Understanding Apartment Building Costs
Apartment buildings come in various shapes and sizes, ranging from small owner-occupied structures to high-rise complexes with multiple floors. The cost of constructing an apartment building can vary significantly, with the national average falling between $5.4 and $59 million. However, most people pay around $12.5 million for a 5-story mid-rise apartment building with 50 units.
Cost per sq.ft. of an infill, low-rise, mid-rise and high-rise apartment building
Factors Affecting Construction Costs
Several factors influence the cost of constructing an apartment building. These include the size of the units, the number of units, the type of construction materials used, the availability of labor and materials, and the location of the building. Generally, the cost per square foot ranges from $95 to $645, with an average of $310 per square foot.
Different types of apartment buildings also impact construction costs. Here are some examples and their average cost per square foot:
- Infill apartments: $95 to $205 per sq.ft.
- Low-rise apartments: $180 to $275 per sq.ft.
- Mid-rise apartments: $210 to $310 per sq.ft.
- High-rise apartments: $270 to $675 per sq.ft.
The number of stories in an apartment building also affects the cost. As the building size increases, the overall costs rise. For instance, a 5-story apartment building may cost between $8.3 million and $15.3 million, while a 50-story high-rise can range from $89 million to $401.25 million.
Cost to build a 3, 4, 5, 6, 10, 15, 20, 30, 40, and 50-story apartment building
Similarly, the number of units within an apartment building can greatly impact the total cost. A 4-unit building may cost between $1.2 and $4.2 million, while a 100-unit building can range from $23.8 million to $240.8 million.
Cost to build a 4, 6, 8, 12, 16, 20, 24, 50, and 100-unit apartment building
Benefits of Prefabricated Construction
To reduce costs, many construction firms opt for modular or prefab building methods. Prefabricated construction involves constructing various components off-site and then assembling them at the building site. This method minimizes delays caused by weather conditions and streamlines the construction process. On average, the price per square foot for a prefab apartment building ranges from $150 to $400.
Construction Cost Breakdown
When estimating the cost of an apartment building, it's essential to consider different cost components. Here is a breakdown of the typical costs as a percentage of the total project cost:
- Architect Fees: 9% of the total cost
- Structural Engineer Fees: 1.5% of the total cost
- Contractor or Builder Cost: 25% of the total cost
- Foundation: 9%
- Electrical: 10%
- Plumbing: 12%
- Floor Structure: 12%
- Walls and Exterior Finish: 14%
- Roof and Cover: 10%
- Windows and Doors: 5%
- Interior Finish: 8%
- Kitchen: 8%
- Bath Detail: 4%
- Interior Features: 4%
- Floor Finish: 4%
New apartment building construction breakdown
Maintenance and Ownership Costs
Owning an apartment complex comes with various costs, including maintenance expenses. Monthly maintenance fees range from $50 to $1,000 per building, depending on the building's needs and location. Additionally, the cost of owning an apartment complex should ideally be between 20% and 50% of the income generated by the complex to ensure a profitable investment.
Single-Family vs. Multi-Family Investment
Investing in real estate can take different forms, such as single-family or multi-family residences. Single-family investments involve purchasing a house and renting it out, while multi-family investments entail owning apartment buildings. Multi-family investments generally require more upfront capital but offer multiple income streams, making them easier to finance.
Enhancements and Additional Costs
If you want to build luxury apartments, the cost will increase significantly. Luxury apartments are high-end properties with lavish amenities and first-class features. The cost to build a luxury apartment starts at $550 to $650 per sq.ft.
Adding a parking garage to an apartment building is another consideration. The costs range from $14,000 to $30,000 per space for parking garages and $1,500 to $10,000 per space for surface lots.
Conclusion
Building an apartment building is a significant undertaking that requires careful planning and consideration of various factors. Costs can vary greatly depending on size, location, materials, and the number of units. By understanding the different components and considerations involved, you can make informed decisions when embarking on an apartment building construction project.
References: AmeriBuilt, Apartmentguide, Britannica, Brookings, Census Counts 2020, Craftsman Book Company, Federal Housing Finance Agency, FIXR Cost Guides and Cost Database, Investopedia, Millionacres, Multifamily.loans, My Home by Freddie Mac, Rentcafe.com, Spendonhome.com, The New York Times.
