Why we underwrite maintenance before we underwrite rent

When a multifamily building trades, the conversation is almost always about rent — current rents, market rents, and the gap between the two. Maintenance is a footnote. We invert that order.

Before we look hard at what a building earns, we look hard at what it will cost to keep. Roof age. Plumbing risers. Electrical capacity. The foundation and the envelope. These are the items that, ignored, quietly consume a decade of returns.

A building bought on an optimistic rent assumption and a pessimistic maintenance one is a building bought wrong. The rent might arrive. The capital bill always does.

So our model begins with a capital plan: what this building will need over the next ten years, scheduled and funded. Only then do we ask what it can reasonably earn.

It is a less exciting way to underwrite. It is also why our buildings are still standing well, and still earning, long after a more optimistic projection would have expired.