The calculation for pricing the inspection of multi-family dwelling properties is based on the price per unit, or, in other words, a cost per front door. It can be a more challenging process to bid due to the variables to consider for each subject property, such as the size of the units, the number of bedrooms and bathrooms, the type of HVAC systems, etc. For example, some buildings may have a large central heating unit, while others may have individual systems for each apartment.
Most jurisdictions define a commercial building as a structure containing more than four dwelling units. Four or fewer is considered a residential building and requires a residential SOP.
The two constants for a multi-family fee matrix include:
- Range of units. This is the range of units associated with a particular cost.
- Dollar amount per unit. This is the cost for inspecting units within a certain range.
Note: To determine the dollar amount, the inspector must understand their capabilities and combine that with what’s necessary to make a profit and compete with other inspection firms. Understanding the hourly cost of your inspection and your pricing using the square foot per hour is a particularly helpful approach.
Example Fee Matrix
The following is an example of a range of units and the associated cost per unit. This fee matrix is in descending order instead of ascending because many clients look at projects on a scale instead of exposure. Think economies of scale. This table could be reversed, if desired.
- 5 to 8 units: $125 per unit
- 9 to 15 units: $110 per unit
- 16 to 24 units: $90 per unit
- 25+ units: $75 per unit
Some inspectors adjust their fees to account for a base price. The base price would consider the roof, exterior, common halls, and other general features.
Additionally, some instances may require the inspector to view their fee matrix in a more abstract way to adjust for certain variables. For example, although a building might have 15 units, you might refer to the eight-unit price to bid on a job with individual HVAC systems in each unit. This would account for the extra effort necessary to perform the inspection and write the report, compared to a building with a central HVAC system. In short, you can adjust your prices up or down a level on the fee matrix depending on complexity of the building.
Example Project #1
The subject building has 12 units with a central boiler. Each unit has two bedrooms and one bathroom, with a living room and a kitchen.
Calculation: $250 (base price) + 12 units × $110 per unit = $1,570
Example Project #2
The subject property has 12 units with individual HVAC units. Each unit has two bedrooms and one bathroom, with a living room and a kitchen.
$250 (base price) + 12 units × $125 = $1,750 (bumps up the per-unit fee one level)
Conclusion
Creating a multi-family fee matrix can help inspectors bid jobs quickly and consistently. In order to determine the constants, the inspector must have a good idea of their capabilities and costs, as well as how a building’s variables may affect them. Inspectors may choose to price-shop other local firms to ensure that their rates are competitive. CCPIA members can download the Calculation Template for Pricing Jobs for further assistance. It’s a worksheet designed to help members create a multi-family dwelling inspection fee matrix based on the calculations discussed in this article.
Article Written By: Rob Claus, CMI®
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