ETI Blog

Multifamily properties have long been recognized as one of the most resilient real estate asset classes. At the same time, rising operating expenses, higher material costs and routine resident turnover are taking a bite out of real returns, making strong occupancy rates no longer enough to sustain profitability. Owners are now sharpening their focus on stabilizing cash flow and maximizing ROI through strategic design.

Planning for Profit from the Outset of Multifamily Renovations and New Construction

Architects and multifamily general contractors in Chicago and surrounding towns have an opportunity to help property owners evaluate performance, uncover inefficiencies and benchmark key metrics against industry standards to integrate design features that will drive higher ROI in their multifamily projects.

Whether for multifamily new construction or ongoing multifamily renovations, early in the design phase is the ideal time to analyze every process and expense to uncover cost-saving opportunities and create long-term value. From material selection to energy efficiency and space utilization, strategic design and pre-construction planning can have a measurable impact on operating costs, tenant retention and overall cash flow.

By exploring the following key design strategies, architects can help multifamily property owners remain competitive and profitable.

Prioritizing Materials that Hold Value Over Time

Construction costs have gone up by almost 40% in the last five years, and material prices continue to climb, with softwood lumber, steel and aluminum seeing sustained price volatility. With these cost pressures, choosing materials that are both cost-effective and low maintenance over materials prone to frequent price swings can help stabilize the budget and contribute to a healthier bottom line.

Staying apprised of which materials directly impact profitability guards against unnecessary expenses, frequent replacements and shrinking margins.

Below are several options known to support strong ROI:

• Luxury Vinyl Plan (LVP): A popular alternative to hardwood with a higher resistance to wear and tear at a lower price point.
• Quartz Countertops: Known to outperform granite with its resistance to stains, scratches and chipping and no need for regular sealing.
• Fiber Cement Siding: Designed as a more durable alternative to EIFS and stucco with the ability to withstand moisture, cracking and weather damage.
• Engineered Wood: A stable alternative to solid hardwood that resists warping, shrinking and moisture and reduces exposure to lumber price fluctuations.
• Recycled Steel: A consistent and sustainable option that maintains structural integrity while reducing reliance on volatile steel markets.

Incorporating Features Residents Will Pay More For

The right design features can attract (and retain) residents while driving significant ROI for property owners. According to a report by the National Multifamily Housing Council, 75 percent of residents prioritize amenities when deciding to rent or renew their lease. And while it’s easy to assume that fancy finishes or the latest tech drive those decisions—and for some residents, they do—the data shows that most prioritize comfort and convenience above all.

Below is a snapshot of how much renters are willing to pay per month for their most valued features.

• Air Conditioning ($55/Month)
• Washer/Dryer ($55/Month)
• Fast Internet ($48/Month)
• Childcare ($48/Month)
• Dishwasher ($47/Month)
• Soundproof Walls ($46/Month)
• Nonsmoking ($45/Month)
• Pool ($43/Month)
• Cell Reception ($43/Month)
• Fitness Center ($41/Month)

Renovating Multifamily Units for ROI

Chicagoland’s older multifamily buildings bring plenty of charm—and a lot of opportunity. With more than 75% built before 1942 and much of the suburban stock dating to the mid-to-late 20th century, these properties are full of character but often require ongoing design updates. To stay competitive with new construction, property owners need to make strategic upgrades that keep properties relevant while maintaining occupancy and profitability.

One growing trend in Chicago involves retrofitting central cooling systems in pre-1980 low- and mid-rise multifamily buildings. With air conditioning ranked as the number one feature renters are willing to pay more for, many owners are turning to water-source heat pumps or VRF systems to meet that demand. These systems not only improve energy performance but also allow for vertically tiered renovations to keep most units occupied while work progresses floor by floor.

Beyond HVAC, prioritizing multifamily renovation projects that consistently deliver strong returns is an effective way to increase both rent potential and long-term value. Kitchen and bathroom updates have shown to produce the greatest rent increases; energy-efficient amenities lower operating costs; and well-planned community amenities can increase occupancy and attract higher-income tenants. Within this context, most apartment complex construction yields an ROI between 10 and 40 percent, depending on the scope of work, timing and location.

The best time to make these upgrades is when the market is strong. And with Chicago’s occupancy rate holding steady around 95.7%, demand is stable, making it a smart time to connect with clients on strategic goals. 

Below are the top multifamily renovations that contribute to higher ROI:

• Modernizing Kitchens: Architects can transform closed-in kitchens into more functional, contemporary spaces by introducing open-concept layouts, optimizing appliance placement and widening clearances.
• Refreshing Bathrooms: Small layout changes can free up usable space and allow for walk-in showers, floating vanities and built-in shelving. Architects can also integrate low-flow fixtures and improved lighting schemes that elevate the tenant experience while controlling water and energy costs.
• Replacing Flooring: Installing LVP in place of worn carpet or laminate offers long-term durability, water resistance and a clean, updated look and feel.
• Enhancing Curb Appeal and Maximizing Outdoor Space: Architects can elevate curb appeal and maximize underutilized areas by redesigning facades, lighting, outdoor gardens, pet-friendly zones and shaded seating to enhance the perceived value of the property from the first impression.
• Reimagining Common Areas: Reconfiguring lobbies, hallways and shared amenity spaces to support remote work, social connection and wellness-focused design can help modernize a dated building with features that compete with new construction. Small layout changes, such as carving out alcoves for package lockers or re-routing foot traffic to create lounge space, can increase usability and resident satisfaction.

Future-Proof Your Designs with Energy Efficiency in Mind

Most multifamily new construction is outfitted with energy-efficient upgrades and smart technology, but multifamily renovations are starting to close the gap with high-ROI features that today’s residents are willing to pay more for. 

According to the 2024 Greystar Design Survey, more than half of those surveyed expressed interest in technology, security and sustainability-related features, and assigned an average rent premium to each upgrade. 

As energy efficiency and smart home technology continue to grow, architects have an opportunity to integrate the following features into their designs to add more value for owners.

Technology and Security Features:

• Controlled Community Access (51% Interested/$70 Avg. Rent Premium)
• Keyless Smart Locks/Unit (61% Interested/$77 Avg. Rent Premium)
• Community Wi-Fi in Common Areas (51% Interested/$47 Avg. Rent Premium)
• Smart Thermostats (62% Interested/$52 Avg. Rent Premium)
  

Energy-Efficient Features:

• High-Efficiency Appliances (71% Interested/$79 Avg. Rent Premium)
• Fresh Air Ventilation (69% Interested/$79 Avg. Rent Premium)
• Premium Air Filters (68% Interested/$80 Avg. Rent Premium)
• Energy-Efficient Lighting (64% Interested/$72 Avg. Rent Premium)

Looking Ahead

When it comes to maximizing ROI in a multifamily renovation or multifamily new construction project, strategic design is about positioning the right pieces, in the right order, at the right time. Architects and multifamily general contractors who collaborate early in the process can bring both a broader design lens and deep technical insight to the table to achieve the highest ROI.

From selecting durable, cost-efficient materials to reworking outdated layouts and integrating high-performing systems, every detail has the potential to impact returns. And in a market where rising costs continue to challenge margins, it’s the balance between design intent and constructability that can deliver measurable value for owners.

Connect with our team at (773) 299-6574 to learn how we’ve helped clients increase their ROI through strategic design in multifamily renovations and new construction. Request a quote and find out what’s possible for your next project.