7 Pieces of Advice for Successful Multifamily Property Management condos

Our Top 7 Pieces of Advice for Successful Multifamily Property Management

You’re probably familiar with how we stumbled into real estate investing by house-hacking our first duplex property. But while single-family properties and small multifamily properties may seem like the first step to becoming a real estate investor, that’s not the only route. You can invest in and personally manage multifamily properties, moving up one asset at a time and steadily grow your real estate property management experience and your portfolio at the same time. 

You don’t have to represent a REIT or be a big-bucks tycoon to own a multifamily apartment complex!

The appeal of multifamily properties, such as apartment buildings and complexes, is that they generally provide higher returns and more stability than single-family rentals (SFR) because the rents paid from multiple units may typically pay the mortgage even if one unit is vacant.

Whether you’re a novice or looking to make the jump toward more commercial real estate possibilities, it’s critical to grasp the ins and outs of investing in real estate plus what it takes to be a successful property manager. You already know that investing in real estate is a great way to build and diversify your income streams, but make sure you also understand what it takes to efficiently and profitably manage your investment property.

When you invest in multifamily properties, you’re also agreeing to take on a few key property management responsibilities. You must continuously take steps to keep your rental property in good working order and maintain its appearance. At the same time, you’ve got to ensure that you are earning enough rent to make a profit and that you keep the families living in your units happy.

Here are our top seven pieces of advice (from experience!) for properly managing and making a profit from multifamily property.

Slow & Steady Growth Wins The Race

It’s no use for you to expand your ownership to multiple properties if your property management skills are lacking. That will only cause you financial trouble, excessive vacant units, and maybe even legal action as a result of you being spread too thin and unable to properly manage your assets.

So, unless you’re hiring a property management company, it’s imperative that you grow one multifamily property at a time, carefully selecting the right property and honing your asset management and property management skills with each move. This is especially important if you’ve never participated in multifamily property management before or if you’re new to the real estate investing game altogether.

Investment properties of scale (4 – 400+ units) require long-term care and commitment to maintain full occupancy and happy renters. If you have previous experience managing single-family rental homes or commercial properties, you might have some insight into the necessary skill set. However, if you’re brand new to multifamily property management, I’ll tell you right now that there’s more to it than screening tenants, and hiring contractors.

It’s easy to bite off more than you can chew, accidentally overextend yourself, and become overwhelmed. And that can poorly impact your cash flow and returns, plus burn bridges with potentially great tenants.

Even if you’ve maintained a vacation rental, Airbnb, or hired a cleaning team for a commercial rental, this still doesn’t necessarily equip you for real estate investing involving multifamily properties. Multifamily real estate investments require precise planning and strategy.

By starting small, planning ahead, and expanding strategically, you can ensure resident retention, a relatively low number of property maintenance issues, and a more controlled environment on each property you own. When multifamily owners focus on a single property at a time, set community ground rules, and provide attention in excess of what tenants generally expect, they secure a solid reputation and build long-term wealth.

In doing so, you allow yourself the time needed to master the fundamentals of multifamily property investing and management, slow and steady. Starting with a single multifamily property and learning to manage it well before selecting your next investment opportunity will allow you to steadily grow your portfolio and maintain profit with each additional asset purchase.

See The Value In Curb Appeal

Of course, you’ll have to repair damaged structural features, but what about more minor or cosmetic repairs? You score points with potential and current residents anytime you can improve the look and feel of the property.

What features or services would you want if you were a renter? If your home is being marketed as family-friendly, double-check that the playground equipment meets current safety standards and is up to date. If you have high expectations for your renters, you must provide equally high-quality landscaping, property maintenance plans, a move-in inspection, a move-out inspection, and require a security deposit to establish the tone.

The problem is, that while you can sell a single-family home quickly for a profit, multifamily properties and apartment buildings are long-term investments. Your best returns are usually from investing in your tenant benefits, facilities, and lifestyle improvements. Periodic tree pruning and gutter cleaning as part of the management agreement is a big plus – your renters won’t do this work anyway and it’s beneficial to the appearance and value of the property.

When you invest in the property, your residents take notice. As far as upgraded kitchens and bathrooms, consider the local job market and the neighborhood around your apartment complex to figure out which types of amenities would be most appealing to potential and current renters. Make sure you calculate your overall return to ensure you’re making improvements that will help you raise the asset’s value and allow for a rent increase.

Starting out as a landlord with your first multifamily property may not make you wealthy overnight. However, working to provide cost-effective lifestyle improvements and benefits to entice renters to stay long-term will aid in your success as an individual investor over time.

Even adding something simple, such as a high-speed internet connection and recommended list of service providers can win you points with renters. What simple, low-cost extras can you provide to make their experience a breeze?

Give Your Tenant Screening Process A Boost

Consider your tenants to be long-term investors in your home. Finding the right tenants is a key part of the process to becoming successful in property management since they assist you in paying your monthly mortgage, alert you to damages or concerns around the property, and occasionally boost the tangible asset value of your property. All of the above plays a part in increasing your income.

The beauty of owning multifamily rental property in the United States is that there are always potential residents looking for places to live. Sometimes they just need more space or live nearby and are looking to upgrade or downgrade. People move for all sorts of reasons and you want your rental units and your tenant screening process to be top-notch so that when the right renters stop by, you’re ready to impress.

When screening individuals, take into account their whole financial history. Consider a variety of asset classes, types of taxable income, and other payment methods. This will allow you to make sure that a renter can afford to pay their lease on time each month after examining their entire financial picture. It’s also recommended to run a background check on them to help you determine whether or not they’ll require a co-signer.

As a multifamily property manager, your tenants should happily agree to occasional property inspections, one month’s rent as a deposit (at least), and access to the property with notice for occasional maintenance. You can keep further tabs on the property and through software and drive-by inspection once they move in.

Go Above and Beyond Just Providing a Place To Live

Owning and maintaining a multifamily rental property involves more than just being a rent manager and responding to resident maintenance requests. While those aspects are certainly part of the job, you also have to work diligently to maintain your property and keep it in proper working order. 

You’ll want scheduled maintenance, landscaping, and seasonal services like snow removal and appliance check-ups to keep everything humming along and avoid water heater or air conditioning unit breakdowns, pest infestations, or other avoidable inconveniences from happening – for you and your residents’ sake!

If you’re just covering the monthly mortgage payments and costs, but not addressing underlying maintenance issues, you’ll find it tough to increase rent, which will ultimately affect your net worth. The best way to increase the value of your buildings over time is to undertake seasonal maintenance and upgrade units on a regular basis. When you go beyond simply repairing damaged structural features and bare-minimum attention, your premesis goes from “just okay” to “wow, this is nice!”

While you concentrate on keeping the property in good working order, also think about ways to make it more appealing for resale in the future.

Lean Into Lead Generation

When you compare industry experts to new rental property owners, the distinctions are obvious. The large operation multifamily property managers are excellent at marketing the property, which results in consistent rent collection, the constant inflow of new potential renters, and a reliable monthly income from the property.

This might be where community events, software, and even a rent manager might be of service because when people spread the word about how efficiently your real estate is managed, you’ll no longer have to worry about low occupancy rates or dips in income.

Many vacation rental and real estate professionals understand how to effectively use marketing, advertising, and content production to attract guests to their homes and this helps guarantee that they’re making a profit every month. Be creative about how to reach potential residents with automated marketing so you can be free to focus on managing your residents’ needs efficiently and explore additional diversification strategies.

Use Multifamily Property Management Software

Property management software is designed to serve landlords and owners/ property managers. The software is designed to help property management simplify and automate their daily activities and streamline building operations. Typical apartment management software was developed to help managers handle buildings containing 50 or more units, but most providers also have Lite versions for smaller buildings with less than fifty units.

The best software will provide an integrated solution for property managers and owners to organize tenants, generate financial reports, sync and reconcile bank accounts, schedule maintenance, pay contractors, book tours, and automate marketing. This relieves the property manager from remembering who paid rent when, who’s past due, which rates certain units require, when move-in or move-out dates are, when the landscapers are coming, and whether rent collections are covering the cost of owning and managing the apartment.

The key is to find the right software that fits your needs, plus the distinct needs of the asset. Most multifamily property management software is set up to charge you an upfront fee and then a monthly subscription that’s usually based on the number of units or doors.

Learn How To Manage Multifamily Property Fast With Friends

For new investors and property managers, the real estate industry can seem intimidating and competitive. When investing in rental properties, no matter if they house single or multiple families, efficient property management is essential to your success. You’ve got to pay attention to your current residents, the land and building’s condition, handle property maintenance, and keep your eyes on the horizon toward new tenants just in case someone decides they want to move – that’s a lot to shoulder!

One of the best ways to achieve success in anything in life is to surround yourself with people at least one step ahead of you. In other words, make friends with other real estate investors who have experience with property management. Whether they run their own multifamily property management companies or know someone who does, they may be a gold mine of information and a great pal to have coffee with! Find a way to add value to their lives in return for their excellent counsel.

At Goodegg Investments, we’re here to assist you with the expertise and guidance that you need in all areas of real estate investing and apartment complex property management. Whether you’re interested in purchasing a multifamily property directly, through syndication (group investment), or via a REIT strategy, we’ve got years of successful multifamily property management to offer! When it comes to real estate investing, often the advice you receive is the key determining factor in whether you achieve your financial objectives, acquire wealth effectively, and expand your portfolio as a successful property manager and investor.

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