How Much Does It Cost To Build a Multi-Family Home?
The national average cost to build a multi-family building ranges from approximately $6.53 million to $71.39 million. Typically, constructing a 5-story mid-rise multi-family complex with 50 units would cost around $15.13 million. For smaller-scale projects like a basic 4,500 sq.ft. duplex multi-family building, costs begin at $1,173,700. On the higher end, luxury high-rise multi-family buildings with 100 units can reach costs of up to $188.76 million. These expenses can vary based on factors such as building size, materials used, location, and the level of luxury or complexity involved in the construction process.
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Type | Cost Range |
National Average | $13.75 million |
Average Range | $5.94 million – $64.9 million |
Low-end | $1,067,000 |
High-end | $171.6 million |
Multi-Family Construction Cost per Square Foot
When building a Multi-Family building, the construction cost per square foot is a crucial factor in determining the overall budget. This cost typically excludes expenses for finishing, architect and contractor fees, land purchase, landscaping, parking lots, and many interior and “soft” costs like design, material selection, and delivery.
Several factors influence the final construction cost of a Multi-Family building, such as unit sizes, number of units, building size, materials used, availability of labor and materials, and other considerations. Construction costs per square foot for Multi-Familys vary widely depending on location and type of structure. Smaller Multi-Family buildings with five or fewer units generally have lower construction costs per square foot than mid-rise buildings, and mid-rise buildings tend to have lower costs per square foot than high-rise Multi-Familys.
The cost range for Multi-Family construction per square foot now ranges approximately from $114.95 to $780.45, with an average cost of around $375.10 per square foot. These estimates can vary based on whether the project involves luxury Multi-Family, mid-range housing, or builder-grade developments.
Multi-Family Housing Costs by Type
The type of multi-family housing you choose significantly impacts the total project costs, particularly the construction cost per square foot. Larger buildings often employ different construction methods that increase overall expenses. Some multi-family units incorporate mixed uses, such as offices or storefronts, and include amenities like pools, gyms, social areas, and lobbies, all of which impact construction costs.
Multi-family housing varies in shape, size, and complexity, each factor influencing construction costs. Buildings with more corners and unconventional shapes generally incur higher construction expenses. The number of units and the overall building size also play crucial roles in determining the final cost. Below are various types of multi-family housing categorized by their average cost per square foot.
Apartment Building Type | Cost per Sq.Ft. |
Infill | $104.50 – $225.50 |
Low-Rise | $198 – $302.50 |
Mid-Rise | $231 – $341 |
High-Rise | $297 – $742.50 |
Infill Multi-Family Building
The cost of an infill multi-family building now ranges from $104.50 to $225.50 per sq.ft. This category includes duplexes, triplexes, six-packs, and walk-up buildings. These structures often mirror single-family homes in style and architecture, primarily constructed with timber. Typically housing 2 to 6 units per building, infill multi-family properties are cost-effective due to their builder-grade materials and straightforward construction.
Low-Rise Multi-Family Building
Constructing a low-rise multi-family building now averages $217.80 to $332.75 per sq.ft. These buildings usually span up to 4 stories and are built with wood framing. Commonly known as 3-over-1 buildings, they feature apartments on three floors above ground-level units that may include shops or amenities. Predominantly found in suburban settings, low-rise multi-family buildings typically accommodate 5 to 50 units with elevators, dual staircases, and double-loaded corridors.
Mid-Rise Multi-Family Building
The cost to build a mid-rise multi-family building now ranges from $254.10 to $375.10 per sq.ft. These buildings are larger and often combine wood framing with concrete or steel podiums. Typically 5 to 10 stories tall (though some reach 12 stories), mid-rise multi-family buildings house 50 to 200 units. They offer amenities such as gyms, concierge services, and retail spaces on the ground floor, along with multiple elevators and corridors.
High-Rise Multi-Family Building
Building a high-rise multi-family property now costs $326.70 to $816.75 per sq.ft. These buildings exceed 12 stories and are predominantly constructed using concrete and steel due to zoning regulations. High-rise multi-family buildings can rise to heights of 20, 30, or even 40 stories, accommodating 4 to 20 units per floor. They are equipped with upscale amenities like gyms, pools, and concierge services. Their design must withstand substantial lateral forces from wind and seismic activity, increasing costs approximately every 10 stories.
Multi-Family Building Construction Cost per Floor
As multi-family buildings increase in size, their construction costs typically rise accordingly. This trend is due to several factors, including the increased number of units per floor and the materials used. There isn’t a fixed cost per floor; instead, costs vary based on the total square footage and the specific design of the building.
The expenses escalate with each additional floor for several reasons. Each floor allows for more units, thus escalating the overall materials and labor costs. For instance, constructing a 5-story multi-family building is generally more expensive than a 4-story one due to the added units and materials involved. Moreover, as buildings progress to high-rise structures, the construction materials shift from wood to steel, further driving up costs. This change reflects the complexities of taller buildings and the need for stronger structural support.
Below provides a general overview of construction costs based on the number of stories. These figures are approximate averages, and actual costs can vary significantly depending on various project-specific factors.
Number of Stories | Cost per Square Foot | Total Cost Range |
3 Stories | $104.5 – $302.5 | $3.74M – $4.29M |
4 Stories | $195.8 – $302.5 | $5.5M – $7.37M |
5 Stories | $231 – $341 | $9.13M – $16.83M |
6 Stories | $231 – $341 | $11M – $19.47M |
10 Stories | $231 – $341 | $13.64M – $22M |
15 Stories | $297 – $742.5 | $26.07M – $61.88M |
20 Stories | $297 – $742.5 | $32.56M – $88.28M |
30 Stories | $297 – $742.5 | $45.76M – $132M |
40 Stories | $297 – $742.5 | $65.23M – $264.82M |
50 Stories | $297 – $742.5 | $97.9M – $441.38M |
Multi-Family Building Cost by Number of Units
Multi-family buildings can vary widely in the number of units they contain, each differing in size and scale. It is common for one building to have a mix of studio, one-bedroom, and two-bedroom apartments, each varying in size. Therefore, the number of units alone can often be a poor indicator of the total price of a multi-family building. A large building with fewer, but more luxurious, two-bedroom apartments can cost significantly more than a smaller building with the same number of mid-range studio and one-bedroom units. Consequently, the cost range per number of units in a building can be vast. Below is the average cost range for multi-family buildings based on the number of units. Keep in mind that this is a very broad range, and additional parameters are needed to narrow it down accurately.
Number of Units | Building Cost |
4 Units | $1.32M – $4.62M |
6 Units | $3.96M – $19.47M |
8 Units | $3.96M – $20.79M |
12 Units | $3.96M – $22M |
16 Units | $3.96M – $24.2M |
20 Units | $3.96M – $26.84M |
24 Units | $3.96M – $33.55M |
50 Units | $9.13M – $88.33M |
100 Units | $26.18M – $264.88M |
Multi-Family Building Cost by Number of Units
Build a 4-Unit Multi-Family Building
A 4-unit multi-family building costs between $1.32 and $4.62 million. These buildings can vary significantly in design, ranging from a single-story structure to a four-story complex, depending on the layout and available space. This type of building is often seen in suburban areas where land is more abundant. They can be standalone buildings or part of larger communities, particularly those aimed at seniors and families. Construction materials are often similar to those used in single-family homes, such as wood framing and vinyl siding, which can help keep costs lower. The flexibility in design and material choice means that the costs can vary widely based on location, materials used, and the level of finish.
Build a 6-Unit Multi-Family Building
The cost of constructing a 6-unit multi-family building ranges from $3.96 to $19.47 million. Typically, these buildings have at least three floors, though the number of floors can increase depending on the size and luxury of the units. These buildings can either stand alone or be part of a larger complex. They are popular in urban and suburban settings, where they might be designed to look like large single-family homes. This design approach, known as a six-pack, can help integrate the building into residential neighborhoods. The wide cost range is influenced by factors such as the quality of materials, whether the building includes amenities like elevators, and the overall architectural design.
Build an 8-Unit Multi-Family Building
The price to build an 8-unit multi-family building ranges from $3.96 to $20.79 million. Buildings of this size can have between three and six stories and often feature a variety of apartment sizes. This variety can attract a diverse group of tenants, from singles to small families. In high-demand areas, maximizing the number of units per building can be crucial for meeting housing needs. At this scale, the use of more durable and fire-resistant materials, such as steel framing and brick exteriors, becomes more common. These buildings are often part of larger complexes, which can include shared amenities like parking garages and recreational areas, further impacting the overall cost.
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Build a 12-Unit Multi-Family Building
A 12-unit building could have three to six stories and cost between $3.96 and $22 million, depending on its scope, scale, and materials. Buildings of this size typically feature a mix of studio, one-bedroom, and two-bedroom units. This mix can provide flexibility in tenant demographics and help ensure a steady occupancy rate. In addition to residential units, buildings of this size might also include shared spaces like laundry rooms, storage areas, and small fitness centers. The choice of materials plays a significant role in the cost; taller buildings might require more robust construction techniques and materials, such as reinforced concrete and advanced HVAC systems.
Build a 16-Unit Multi-Family Complex
A 16-unit multi-family building costs between $3.96 and $24.2 million. These buildings can range from four to ten stories, with a mix of apartment sizes and possibly some luxury units. Larger buildings like these often include amenities such as lobbies, gyms, and communal outdoor spaces. The overall cost is heavily influenced by the number of floors; a four-story building is less expensive to construct than a ten-story one due to the increased structural and safety requirements of taller buildings. Additionally, these buildings might be part of larger complexes with multiple buildings of varying sizes, which can help distribute costs and provide a community feel.
Build a 20-Unit Multi-Family Building
A 20-unit building typically ranges from four to ten stories and costs between $3.96 and $26.84 million. These buildings often feature a diverse mix of apartment sizes and luxury units, catering to a broader market. In addition to residential units, 20-unit buildings frequently include communal spaces such as lobbies, fitness centers, and outdoor recreational areas. The cost increases with the building’s height due to the need for more advanced construction techniques and materials, such as stronger foundations and more complex HVAC systems. High-rise buildings, particularly those over six stories, also require additional safety features like fire-resistant materials and emergency exits.
Build a 24-Unit Multi-Family Building
A 24-unit building can range from four to ten stories, costing between $3.96 and $33.55 million. These buildings often include a variety of apartment sizes, with some units featuring three or four bedrooms. Larger buildings like these typically offer more amenities, such as fitness centers, game rooms, and rooftop terraces, which can attract a wider range of tenants. The inclusion of these amenities raises the cost per square foot, especially in taller buildings where the structural and mechanical systems become more complex. The building’s design and materials also significantly influence the cost, with high-quality finishes and energy-efficient systems increasing the overall investment.
Build a 50-Unit Multi-Family Building
A 50-unit multi-family building costs between $9.13 and $88.33 million. At this scale, the building is considered a mid-rise, with construction costs increasing due to the need for more robust structural support and advanced safety systems. If the building is a luxury high-rise, it could exceed 12 stories, significantly impacting the cost. Mid-rise and high-rise buildings require advanced materials like steel and concrete, as well as complex HVAC and elevator systems. Additionally, amenities such as swimming pools, fitness centers, and concierge services become more common, further increasing costs. High-rise buildings also require extensive planning and compliance with stricter building codes and regulations.
Build a 100-Unit Multi-Family Building
The cost of a 100-unit multi-family building ranges from $26.18 to $264.88 million. These buildings can vary widely in size, from mid-rise structures with five floors to luxury high-rise complexes. The cost is heavily influenced by the building’s height, luxury level, and included amenities. High-rise buildings, especially those in urban areas, are more expensive to construct due to the need for advanced structural support, safety systems, and high-end finishes. Amenities such as pools, gyms, lounges, and rooftop gardens are common in buildings of this size, contributing to higher costs. The location also plays a crucial role, with urban areas typically incurring higher construction and land costs due to increased demand and limited space.
Prefab Multi-Family Building Cost
Given the popularity of high-rise multi-family complexes in urban areas, many construction firms are turning to modular or prefab building methods to cut costs. This approach can significantly reduce construction expenses, lowering the cost per square foot and reducing many additional soft costs, such as designer fees. The average price per square foot for a prefab multi-family building ranges from $165 to $440 per sq.ft. This cost efficiency extends to high-rise buildings, making them much more affordable.
Prefab or modular construction involves building many components off-site. These various parts are then transported to the building site for assembly. Because most of the construction occurs in a controlled environment, there are fewer weather-related delays. Additionally, computer-aided building technology streamlines the construction process, making it faster and more efficient. This approach lowers costs and allows your building to be completed quickly.
Multi-Family Building Construction Cost Breakdown
Many variables determine the overall cost of a multi-family building, including materials and labor, as well as the fees for an architect, general contractor or builder, and structural engineer. Costs can vary widely depending on location, material types, and building style. High-rise buildings require more materials overall and for their structural integrity, resulting in higher total material costs.
Every project is unique, but you can get a general idea of how a large-scale project like a multi-family building breaks down in costs. This includes the labor and materials for each section as a percentage of the total project cost. Architect, designer, and builder fees are additional costs on top of the total construction cost.
Here’s a typical breakdown of the construction costs for a multi-family building:
he breakdown in a table format:
Project Area | Cost Percentage |
Floor Finish | 4% |
Interior Features | 4% |
Bath Detail | 4% |
Windows and Doors | 5% |
Interior Finish | 8% |
Kitchen | 8% |
Foundation | 9% |
Electrical | 10% |
Roof and Cover | 10% |
Plumbing | 12% |
Floor Structure | 12% |
Walls and Exterior Finish | 14% |
Additional Fees
Fee Description | Cost Percentage of Total Cost |
Architect Fees | 9% |
Structural Engineer Fees | 1.5% |
Contractor or Builder Cost | 25% |
Multi-family Maintenance
Maintenance costs for multi-family properties vary widely based on factors such as materials used, number of units, and unit types. Monthly maintenance fees can range from $50 to $1,000 per building. Costs often fluctuate based on the specific needs of each building, which can differ depending on location and tenant demographics. Urban areas and luxury buildings typically have distinct maintenance requirements compared to properties in other areas.
Cost of Owning a Multi-Family Complex
There is also a wide range of costs associated with owning a multi-family complex. Factors such as building size, number of occupants, condition, materials, and location significantly impact ownership costs. Owning a multi-family complex is typically viewed as a source of income, where rental revenues exceed operating expenses and the initial purchase price of the building, assuming competitive financing terms. The cost of ownership for the complex should ideally range between approximately 20% and 50% of the revenue generated by the complex. However, rising construction costs can impact the developer’s or owner’s profit margins.
Single-Family vs Multi-Family Investment
When considering an apartment or rental property as an investment, it’s important to weigh the costs and benefits of single-family versus multi-family residences.
Single-Family Investment: When you invest in a single-family property, you purchase a house that you rent out to tenants. If the property sits vacant or you have difficulty finding renters, you may experience periods without rental income. During these times, you still bear the responsibility of maintenance and ownership costs.
Multi-Family Investment: Investing in a multi-family property means you have multiple rental units, providing multiple income streams. If one unit is vacant or a tenant is late with rent, the income from other units can help cover the property expenses. Multi-family investments typically require a larger upfront investment compared to single-family properties. However, because of the diversified income potential, banks often find them easier to finance.
Considerations:
- Upfront Costs: Single-family investments generally involve lower initial costs compared to multi-family properties.
- Income Stability: Multi-family investments offer greater income stability due to multiple rental incomes.
- Financing: Banks may be more willing to finance multi-family properties due to their income-generating potential.
- Maintenance: With single-family homes, you may face higher maintenance costs per unit compared to a multi-family property where maintenance costs can be spread across multiple units.
Enhancement and Improvement Costs
Build Luxury Multi-family Units
A luxury multi-family unit is a high-end residential option that offers extensive amenities and premium features. These units are spacious, often situated in prime locations, and equipped with top-tier appliances and furnishings. They typically include services such as concierge assistance and amenities like movie theaters, fitness centers, or spas. The cost to construct luxury multi-family units starts at $605 to $715 per square foot. In urban areas, costs can exceed these figures due to higher land and construction expenses.
Build a Parking Garage
Most multi-family buildings provide above-ground parking, with parking ratios typically allowing for at least one car per unit. Some developments may offer higher ratios, accommodating two or more cars per unit. The cost to build a parking garage varies depending on factors like location and design. Generally, constructing a parking garage costs between $15,400 and $33,000 per parking space. Surface lots are less expensive, ranging from $1,650 to $11,000 per space. These costs reflect construction expenses, including materials, labor, and site preparation.
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Conclusion
Constructing multi-family buildings entails significant costs influenced by various factors like building type, size, and location. From low-rise to high-rise structures, each type comes with its own set of construction expenses, reflecting differing materials, amenities, and design complexities. Costs range from approximately $104.50 to $742.50 per square foot, with total project expenses varying widely based on the number of units and building height. The construction of luxury multi-family units can push costs even higher, exceeding $600 per square foot. Additional factors such as maintenance and ownership costs further impact overall financial considerations. Understanding these cost dynamics is crucial for developers and investors navigating the multi-family housing market, ensuring informed decision-making in this evolving sector of real estate development.
FAQs
The cost of building a multi-family home varies significantly based on factors like size, location, and building type. Here’s a breakdown:
- National Average: The average cost ranges from $6.53 million to $71.39 million.
- Example Costs:
- A 5-story mid-rise complex with 50 units: Approximately $15.13 million.
- Basic 4,500 sq.ft. duplex: Starts at $1,173,700.
- Luxury high-rise with 100 units: Up to $188.76 million.
Construction costs per square foot vary based on factors like building height, materials, and location:
- Average Cost: Approximately $375.10 per square foot.
- Range: $114.95 to $780.45 per square foot.
Multi-family housing costs are influenced by design complexity and amenities. Here are some examples per square foot:
- Infill: $104.50 – $225.50
- Low-Rise: $198 – $302.50
- Mid-Rise: $231 – $341
- High-Rise: $297 – $742.50
Costs vary widely depending on the number of units:
- 4 Units: $1.32M – $4.62M
- 6 Units: $3.96M – $19.47M
- 50 Units: $9.13M – $88.33M
- 100 Units: $26.18M – $264.88M
Ownership costs include maintenance, upkeep, and potential vacancies. Costs typically range from 20% to 50% of the revenue generated by the complex.
Multi-family properties offer diversified income streams and greater income stability compared to single-family homes. They can be easier to finance due to their income-generating potential.
Luxury units cost between $605 and $715 per square foot, depending on location and amenities.
Building a parking garage typically costs between $15,400 and $33,000 per parking space, depending on location and design.
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Process To Get To Build a Multi-Family Home Cost Estimate Report
Here I am going to share some steps to get your to build a multi-family home cost estimate report.
