A Guide To Managing Your Multi-family Property

February 9, 2023

Multifamily Real Estate Investments, Residential Real Estate Investments

Rental Policy

Develop a clear, fair rental policy that outlines in detail the expectations from the tenants of the property, including behavioral rules, rent payment process, service request procedure, and non-compliance consequences. This will ensure that your tenants know the rules and policies governing their tenancy and must agree to them before moving in. No one can claim ignorance should they breach the guidelines, and action can be taken transparently and reasonably to remedy the situation.

Select the right tenants

Signing the wrong tenant is like inviting misery into your life. They could cause damage to your property, not pay rent on time, drive away neighboring tenets, and, in general, make life difficult for you. And while no screening method is 100% reliable, at the very least, ensure you conduct comprehensive reviews and background checks on the prospective tenant. Selecting the right tenant erases half your maintenance troubles as they will take care and responsibility for their rented units.

Maintain strong relationships

Try to maintain friendly, trusting relationships with your tenants. Chances are good they would be willing to overlook minor issues and, for more significant matters, work with you in a way that solutions are affordable, practical, and not rushed.

A strong relationship will also help maintain occupancy, as they may be more willing to extend their rent on their unit.

Create and stick to a budget

If you are not carefully monitoring your expenses, they can run away and strip away the profits you should be enjoying from your investment. Make an accurate budget to capture your operational costs, repairs, and refurbishments, and stick to it. Additionally, set aside 5% – 10% of your income towards an emergency fund that can be used when unforeseen dilemmas arise.

Preventive maintenance

Practicing scheduled and structured maintenance can go a long way toward increasing the longevity of your assets and equipment. Develop a schedule of maintenance tasks that must be completed daily, weekly, monthly, or annually. Also, include any license renewals and inspections that need to be renewed on a plan so you or the management team don’t lose track of critical regulatory inspections that could result in fines.

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Review rental rates

Make sure you get the most out of your investment by periodically reviewing the rental rates, measured against market conditions. This will also help you understand if you remain competitive to avoid avoidable vacancies.

Hire a property management company

Depending on the scale of the property, the number of tenants, and the average monthly income, outsourcing management and maintenance work to a professional property management company may be worthwhile. They will handle administration and maintenance tasks and take care of marketing the property and filling vacancies. This additional expense may be worth it in the long run for the peace of mind and professional experience when handling your property.

Foster a strong community

Encourage a sense of community within your tenants and surrounding businesses. This can be done through events and activities such as holiday parties or exclusive promotions from local restaurants. This leads to maintaining solid relations with tenants and will also help reduce vacancy rates. Additionally, this sense of belonging and community can make the residents treat the property like their own, so they will take better care of the facilities and report any issues before they become unmanageable, so your costs for maintenance could be reduced.

Offer ancillary services

Consider offering services such as on-site laundry facilities, sports facilities, vending machines, a restaurant or coffee shop, etc. This can make the property more attractive for tenants and lead to other forms of revenue generation in the long run. Operational costs for added services or amenities should be calculated during the evaluation process to ensure that you break even or generate profit from these value additions.

Maintain accurate records

Keep track of all your income and costs (including rent payments, maintenance costs, and financing costs) to assess your property’s performance and to make sure you are making profits and hitting your investment goals. This will help you make more informed decisions for your current and future investment plans.

Conclusion

While owning and managing a multi-family property such as a condominium or apartment complex can be a challenge, it is one worth overcoming in light of the overall earning potential both in the long and short term. Following these 12 tips can help you master the property management aspect of your investment and give you the confidence to take on bigger challenges for greater rewards in the future.

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