Renovation Premiums

I’m curious to see what process other companies use to determine amenity premiums for renovations.

I recently joined a company that is renovating units without a proper renovation plan and as a result, pricing doesn’t make sense and units are sitting longer than they should. I’ve never determined premiums for renovations so this is a completely foreign process and I don’t know where to start. To make things slightly more complicated, there are about 4 different types of renovations that range from older renovations from previous ownership (which in my opinion should no longer be considered a reno) to kitchen or bathroom only renovations to full apt reno.

I’d like to find a way to build a case to present to ownership based off market data to propose what the premiums should be. Welcome to all suggestions and help as I really need it!

I'm going to loop Donald Davidoff into this, as I think he can give some guidance.

Initial settings are usually done through comp analysis and prior experience with renovation projects. Then we recommend monitoring the pace of leasing for reno units vs non-reno to determine whether those initial upcharges are too high, too low or "just right." If too high, then either lower or, if the ROI is no longer good, stop doing them.

That's a general sense. The specifics can vary a bit project by project. We do offer consulting services in this space if you need more that just the overview above ([email protected]). Hopefully the notes above help.