New London Multifamily Value‑Add Checklist

Are you eyeing a New London multifamily and wondering how to turn it into a reliable, higher‑yield asset? You’re right to slow down and build a plan. Micro‑location, code items, utilities, and the right capex sequence can make or break your returns. This checklist walks you through the exact steps to validate demand, avoid compliance surprises, pick a smart utilities strategy, prioritize renovations, and model your after‑repair value and rent‑up timeline. Let’s dive in.

Market intel comes first

Before you price a rehab or an offer, confirm that the location and tenant base support your plan. In New London, institutional anchors and proximity to transit and the waterfront drive demand and seasonality. Document nearby anchors such as the U.S. Coast Guard Academy, Connecticut College, and Mitchell College, along with Coast Guard and Navy presence. Confirm each institution’s current status and typical calendar. Pay attention to proximity to the train station, ferries, hospitals, downtown, and beach areas. Micro‑neighborhood differences like downtown, Fort Trumbull, Ocean Beach, and East New London can shift achievable rent more than a citywide average.

You should also check recent transactions, vacancy, and any new supply that could hit absorption. Use city planning and permit records to spot projects in the pipeline. Round out your view with household and income data from the U.S. Census Bureau’s American Community Survey.

What to capture in your market file

• A 0–1 mile rent map by unit type and a quick amenity walk score
• Likely tenant archetypes by micro‑location (students, military, families, seniors)
• Supply risk: 2–5 comparable multifamily projects under construction or planned
• Recent sale comps from the last 12–24 months with implied cap rates

Legal and code checks

The best value‑add fails without clean compliance. Confirm zoning, use, occupancy, and any local registration or inspection requirements before you underwrite rent premiums or new layouts. If the property sits in a historic district or has exterior work planned, verify review requirements. Pull tax history, pending assessments, and insurance claims. Check flood and wind exposure. Resolve any open permits or code violations early.

Compliance items in Connecticut

• Lead and asbestos rules apply, especially for pre‑1978 buildings. Renovations that disturb painted surfaces must follow EPA Renovation, Repair and Painting (RRP) protocols with certified contractors.
• Smoke and carbon monoxide detector standards and landlord responsibilities apply under Connecticut law. Confirm the current requirements and verify installed devices.
• Accessibility requirements may apply to certain scope and building types under the State Building Code.
• Local occupancy limits and any short‑term rental rules should be checked if you plan to reconfigure units or change use.

Inspections that protect your upside

Strong inspections save you from scope creep and emergency capital.

Building and systems

• Full building inspection by a licensed inspector or engineer, covering structural elements, envelope, and roof
• HVAC and boiler check, with capacity and remaining life
• Electrical service and panels inspection for load, safety, and potential for individual metering
• Plumbing inspection, including line condition, water heater capacity, and any lead piping risk
• Asbestos and hazardous materials survey for older buildings
• Lead‑based paint risk assessment for pre‑1978 properties
• Pest and mold inspections where indicators exist
• Environmental screening, including a Phase I ESA if the lender requires it

Permits and timelines

• List every permit you will need for plumbing, electrical, mechanical, roofing, and structural work, along with lead or asbestos abatement if present
• Map municipal rental registration or inspection schedules and any deadlines for renewals
• Add contingencies for abatement, change orders, and inspection delays
• Line up contacts: New London Building Department and Code Enforcement, New London Assessor and Tax Collector, the Connecticut Department of Public Health, and local licensed inspectors and engineers

Utilities strategy and billing

Utilities can make a good deal great or turn NOI into quicksand. Start by mapping the current setup: fully master‑metered, partially sub‑metered, or individually metered. Then choose a recovery model that fits your building, budget, and tenant base.

Common options include individual meters, sub‑metering with a billing vendor, and RUBS (ratio utility billing). Individual meters often deliver the cleanest alignment but may require electrical or gas upgrades. RUBS has lower upfront cost but depends on clear lease language and tenant acceptance. In southeastern Connecticut, confirm rules with the local utility territory. For water and sewer, check city billing practices. Explore energy efficiency incentives that may offset costs for boilers, heat pumps, insulation, windows, and lighting. If your building predates 1978, budget time and costs for EPA RRP compliance when work disturbs painted surfaces.

Data to gather

• Utility expense history for 12–36 months by type: electric, gas, water, sewer, and trash
• Existing meter configuration: unit‑level meters, master meters, or sub‑meters
• Feasibility and capital cost to convert to individual meters or add sub‑meters
• Estimated NOI impact and payback period for meter conversion or a RUBS program
• Lease language and legal permissibility to pass through utilities under Connecticut law
• Available incentives or rebates and any required pre‑approval steps
• Vendor options for sub‑meter billing and their compliance track record

Practical decision rules

• If the property is master‑metered and utilities exceed 10–15 percent of operating expenses, analyze the capital to convert to individual meters against a RUBS setup. Compare tenant acceptance, required electrical upgrades, and NOI impact.
• For water and sewer where usage varies, consider sub‑metering and low‑flow fixtures to speed payback.
• Add energy efficiency upgrades to your capex plan to reduce operating expenses and improve marketability.

Capex priorities that move rents

Sequence your work to protect safety, avoid rework, and lift rents where tenants perceive the most value.

Recommended order:

1. Health and safety and code items
2. Systems with near‑term failure risk
3. Common areas and curb appeal
4. Unit interiors: kitchens, baths, flooring, paint, fixtures
5. Energy and utility improvements
6. Longer‑term capital like roof, exterior cladding, and site work

Expected impact on rent and NOI

• Kitchens. High perceived value. Even a modest refresh with new appliances, counters, lighting, and hardware can lift rent and reduce vacancy.
• Bathrooms. Strong impact, especially where layouts are dated. Modern fixtures and ventilation help leasing velocity.
• Flooring and paint. Lower cost but high visual impact. Often essential before lease‑up.
• Systems. HVAC, hot water, and boilers may not drive big rent bumps, but they prevent concessions, lower expenses, and reduce turnover risk.
• Roof and envelope. Protects your entire rehab and avoids water damage claims.
• Energy upgrades. Lower operating costs and enhance marketing around better utility bills if tenants pay utilities.

Plan and budget smart

• Complete a life‑expectancy audit of roof, boilers, panels, and water heaters, then build a prioritized replacement schedule
• Define scope levels per unit: turn, moderate rehab, or full gut, and collect multiple local bids
• Package bids with clear specs and note permitting requirements and fees
• Phase work to minimize downtime and keep units leasing
• Document expected rent premiums by upgrade with nearby comps

Simple ARV and rent‑up model

Use a transparent model so you can show your assumptions and test the outcome.

Key definitions:

• Current NOI = current effective gross income (EGI) minus operating expenses
• Stabilized NOI = projected NOI once renovations finish and target rents are reached at a stabilized occupancy, often 93–96 percent
• ARV (after‑repair value) = Stabilized NOI divided by market cap rate for similar New London assets
• Projected upside = ARV minus purchase price, rehab cost, and transaction costs

Inputs to collect

• Current rent roll and current vacancy
• Historical utility expenses and any pass‑throughs to tenants
• Target market rents by unit type from a rent comp study
• Rehabilitation budget by unit and common areas
• Stabilized vacancy rate and a lease‑up timetable
• Market cap rate for comparable New London multifamily

Step‑by‑step workflow

1. Gather 6–12 rent comps within 0.5–1 mile by unit type and condition. Calculate median rent by type.
2. Set a rent uplift target by rehab level. For minor refresh, target a portion of comp median. For full rehab, aim closer to the comp median. Document the rationale.
3. Calculate stabilized EGI:
   • EGI = sum of target rent per unit type × unit count × stabilized occupancy
   • Add other income such as parking, laundry, and pet fees
   • Subtract a concessions allowance if the market requires it
4. Estimate stabilized operating expenses, adjusting for metering changes and any efficiency savings.
5. Compute Stabilized NOI = EGI minus operating expenses.
6. Estimate ARV = Stabilized NOI divided by the market cap rate from recent sales or broker guidance.
7. Compute upside = ARV minus purchase price, rehab budget, and closing costs. Compare results to your return targets.

Timing and sensitivity

• Plan a phased lease‑up over 6–12 months depending on unit size, seasonality, and tenant mix. In New London, align turn timing with school calendars and military turnover where relevant.
• Run scenarios at 90, 100, and 110 percent of target rent to see sensitivity.
• Vary the market cap rate by 50–100 basis points and vary rehab cost by 10–20 percent to stress test outcomes.
• Keep a clear source note for every assumption, from comps to contractor bids and utility bills.

Common New London pitfalls

• Lead paint and asbestos in older buildings increase cost and contractor requirements
• Undersized electrical service that cannot support individual meters without upgrades
• Roof and envelope issues that compromise interior work during storm seasons
• Historic district or coastal review that adds time to exterior scopes
• Student or military turnover that affects lease‑up timing and seasonality
• Water and sewer bills that swing with occupancy if not separately metered
• Municipal permitting timelines that require careful sequencing of trades

Documents to request

• 12–36 months of P&L and general ledger
• Utility bills for electric, gas, water, sewer, and trash
• Current leases, rent roll, and security deposit ledger
• Certificates of Occupancy, open permits, and any code violation history
• Prior inspections, fire safety reports, and maintenance logs
• Most recent property tax bills and any pending assessments
• Insurance summary and any claims history
• Existing warranties on roof, boilers, and major equipment
• Site survey, any environmental reports, and prior capital project specs

Ready to evaluate your deal?

If you want a second set of eyes on rent comps, scope, and lease‑up, you can lean on an operator who buys, renovates, and manages buildings. From due diligence and rehab budgeting to leasing and ongoing management, we help you move from pro forma to performance. Start with a quick review of your target property and get a practical plan you can execute.

Get your next steps with a quick call to Adam Duffy. Get a Free Property Valuation & Investment Plan.

FAQs

How should I choose rent comps for a New London value‑add?

• Focus on 6–12 nearby properties within 0.5–1 mile, match unit type and condition, and use the median rent by type, then adjust for micro‑location and amenities.

What utility billing options work for Connecticut multifamily?

• Individual meters, sub‑metering with a billing vendor, or a RUBS allocation; pick based on capital needs, tenant acceptance, lease language, and local rules.

How do Connecticut lead paint rules affect renovations in older buildings?

• Renovations that disturb painted surfaces in pre‑1978 buildings must follow EPA RRP lead‑safe practices and use certified contractors, which adds cost and time.

How long does rent‑up usually take after renovations in New London?

• A conservative plan targets 6–12 months to stabilized occupancy, adjusted for unit mix, seasonality, and tenant demand from institutions and nearby employers.

How do I estimate ARV for a New London triplex or fourplex?

• Project stabilized NOI using target rents and expenses, then divide by a local market cap rate from recent comps to estimate ARV and compare to total project cost.

What permits or approvals are common for meter conversions?

• Electrical and gas service upgrades typically require permits and inspections; confirm meter policies with the local utility and coordinate city inspections early.