One of the most popular investment strategies in real estate is buying multifamily properties. Having multiple separate rental property units means having more stability and higher cash flow compared to single family properties. However, even though they are in high demand, offering multifamily management services can be quite a challenge, especially for a first-time property manager. Becoming a property manager is one thing, and running a successful multifamily property management company is a totally different affair. To help you get off on the right foot, here are 7 great tips for managing multifamily rental properties:
1. Start Small
With the expectation of making huge profits from multifamily property management fees, new property managers are likely to rush into taking on many properties. However, having a large multifamily property management operation too early could easily overwhelm an inexperienced manager. In the beginning, it is advisable to start small and then build up over time. For instance, you could begin by working with a client who owns a single multifamily home with only two families living in it. This will give you the opportunity to learn more about investment property management and make mistakes in a more controlled environment.
Related: 6 Tips for Starting a Property Management Company
2. Get Familiar with Professional Property Management Systems
Multifamily property management is a job that involves numerous responsibilities. From finding tenants and complying with state and federal laws, to handling maintenance issues, property managers are a busy lot. The good news is that you can use technology to make your work less stressful. Multifamily property management software will help you handle a wide range of tasks including property maintenance, rent collection, tenant acquisition, and property advertisement. With an internet connection, you can manage the income property remotely at any time.
3. Add a Few Perks
With more investors getting on board, the multifamily rentals market is becoming increasingly competitive. To stay ahead of the competition, you need to add a few unique perks. Review the basic services managers provide and see what else you can do that other local managers are not.
For example, you can work to find and analyze new properties for your clients. Check out Mashboard and learn how this tool can help you offer a special service to your clients.
4. Set Community Ground Rules
When you have multiple families residing in the same rental property, problems are likely to arise as they engage each other. For instance, some tenants might have a tendency to throw noisy parties, disturbing everyone else. Others might have dangerous pets that could harm the neighbors’ children. This is why it is important to have community rules in writing that every resident is required to adhere to. These rules should be part of the tenancy agreement which residents should sign before moving in.
In case clashes arise between families, be sure to intervene and resolve them as fast and amicably as possible. Always make an effort to settle issues through friendly negotiation first, before resorting to penalties, fees or legal action. Diplomacy is one of the most important property management skills.
5. Select the Right Tenants
Your success as a property manager will be determined largely by your ability to select the right tenants. If you don’t do your screening properly, you could end up with bad tenants that will make your multifamily property management work a nightmare. Here are some of the questions to ask to pick the perfect renters for your multifamily properties:
- What are your reasons for moving? Genuine tenants will give answers such as ‘I’m changing jobs’ or ‘We need more space’
- What is your monthly income? – This will give you an idea if the tenant will be able to pay the rent comfortably
- Have you been evicted previously? – If the answer is yes, do further investigations before allowing them to rent
- Will you allow a credit/background check? Anyone that opposes this should be treated with the utmost suspicion
Related: What Is the Ideal Type of Tenant for Your Rental Property?
6. Maintain the Rental Property Regularly
Since they are comprised of several units, maintaining multifamily properties involves a lot of work. To keep your tenants satisfied and comfortable, you need to ensure that their living conditions are habitable. Multifamily property management involves responsibilities such as repairing damaged structural features, dealing with pest infestations, eradicating mold and other toxins and repairing fixtures when they break.
There are generally four kinds of inspections you need to conduct:
- Move-in inspection – This ascertains the property’s condition before a new renter moves in
- Move-out inspection – This checks the condition of multifamily homes immediately after a tenant moves out
- Drive-by inspection – This is a quick evaluation of the exterior of a rental property
- Seasonal inspection – Seasonal maintenance includes tree pruning and snow removal in winter, and gutter cleaning in the fall
7. Install Energy-Efficient Fixtures
Though products such as low-flow toilets and faucets, EnergyStar-certified refrigerators, and LED light bulbs might cost more, they will significantly lower your rental property’s costs in the long run. In addition, these products are beneficial to the environment and will help you stay compliant as more environmentally-conscious laws are enacted. Finally, using energy-saving products will attract more potential tenants since it helps them save on their utility bills. All of this is sure to keep your clients happy.
8. Have a Solid Property Management Marketing Plan
Marketing is one of the most important roles in multifamily property management. You need to have a proper strategy for creating awareness about your property and enticing potential tenants. Since most people use the internet to search for houses, the first step should be to have your rental property listed on sites such as Craigslist. Be sure to provide a detailed description of the rental property and information about amenities in the area. Don’t forget to include lots of good quality photos showing every angle of the investment property. Besides getting listed, make use of social media sites such as Facebook and Twitter to promote the property. Offline adverts on newspapers, magazines, and flyers could also be a very effective strategy for reaching potential renters.
Keep in mind that before you have to worry about finding tenants, you’ll need to have a marketing plan in place to attract clients and property owners. Setting up an SEO-friendly website as well as using social media and taking advantage of your local network will help you get started and land your first client. Also, consider working with local real estate professionals like agents and mortgage lenders.
Related: 12 Best Property Management Marketing Ideas for 2019
9. Work with a Team
As mentioned earlier, multifamily property management is a very demanding responsibility. Having a team can make your work much easier and help you get more done. At the onset, you could have a team comprising of yourself, an assistant property manager, and a leasing agent. As the property manager, you will deal with all delicate and owner-related issues. Your assistant will be the main point of contact with renters. The leasing agent will schedule property showings and deal with all rental inquiries. As your portfolio increases, you could add insurance, accounting, and maintenance departments.
Multifamily property management is all about communication, hard work, and transparency. If you apply the tips outlined above, you will attract more property management clients and have a successful property management career.