When you want to get into property investing, it’s up to you to learn as much as you can about not only acquiring properties — but managing them.
There are a number of ideas you need to get to know when you’re investing, particularly if you have your eyes on multi-family properties. By researching and embracing these concepts, you’ll grow your portfolio by leaps and bounds.
Read on to find out what you may not know about multi family property management.
Surprising Facts About Multi Family Property Management
Real estate experts are clear on the fact that multifamily properties are worthwhile investments in today’s market.
The ability to consolidate and vary leasing agreements under one roof gives the property owner more control and options. As a result, multi-family properties are perhaps more important than ever in an age in which development is rapid.
However, getting a strong handle on managing these properties will determine your success or failure when investing in these properties.
Whether you decide to outsource your property management or do it yourself, it makes sense to invest in multi-family properties. Here’s what you need to know about management:
1. It Lets You Rapidly Grow Your Portfolio
Where the rubber meets the road with real estate investing is how soundly you can grow your portfolio. Investing in and properly managing multi-family properties allows you to grow your portfolio much quicker.
For example, when you have a multi-family that consists of 10 different units, this means 10 different leases and 10 different people paying rent. For all intents and purposes, this is 10 different properties in your portfolio providing you with lots of residual income each and every month.
When you purchase a few other multi-family properties, you are rapidly double and tripling your portfolio value without it taking nearly as long as it otherwise would have.
2. You Need to Dig Deep to Account for All Expenses
It’s easy to start licking your chops and seeing dollar signs when you are getting ready to close on a multi-family property.
However, for it to be properly managed, you need to pump your brakes and seriously consider all of the expenses that come with the territory.
It is better to inflate what you forecast, rather than underestimate. Even your ongoing maintenance will probably cost more than you think it does.
Rather than having to run into unforeseen expenses, you need to have a fleshed out and balanced budget each quarter. This begins by accurately assessing your expenses.
3. These Properties Are Actually Easier to Finance
Believe it or not, you don’t necessarily have to spend an arm and a leg to get a foot in the door to financing a multi-family property.
The perception that these properties are expensive prevents a lot of would-be investors from taking those next steps.
When you speak to a property manager, they’ll not only advise you on which properties offer the greatest return on investment (ROI), but will also point you toward the best financing options.
Banks and other lenders are actually more likely to offer you lending for a multi-family property because you will be collecting more income over the course of each month. Even if a tenant or two pays late or fails to pay, you have a number of other occupants that can make up for the difference.
As such, lenders aren’t as worried about your ability to pay your mortgage note.
4. This Could Become a Live-In Investment for You
These properties are often learning experiences for first-time investors. They give you a great opportunity to actually become the property manager by occupying one of the units.
When you act as a live-in, on-site manager, the rent you collect gives you a free place to stay, while earning a profit on top of it. What’s more, you will always know what’s going on when you live on-site, and your tenants will feel comforted knowing that management is on the premises.
Even if you’d prefer to outsource the management to a company, purchasing a multi-family property gives you a prime means of growing your portfolio while having others pay your rent.
5. It Might Be a Small One, But You Still Have to Treat It Like a Community
Since it’s just a multi-family property and not a sprawling luxury apartment community, you may feel you can take a more hands-off approach to your property.
On the contrary, even properties with a half-dozen tenants appreciate community values and perks that good managers know to implement.
Today’s property managers have to raise the bar to accommodate their tenants. Make sure that you are always upgrading the amenities and send out memos that make them feel like they are part of a community, and not just paying rent.
This is important since property investors have to always be playing the long game.
Some investors may have their eyes on flipping a property, while others may want to hold it and rent it out over the long-term. Either way, building a community while you are renting retains value in the property and sets the tone for whatever your long game is.
Get the Most From Your Property Investments
These points mean a lot when it comes to your property investment needs. If you are even thinking about getting into multi-family properties, these points will take out the element of surprise, so you can hit the ground with some strategy.
If you really want to have success with these investments, it pays to let us offer our expertise.
Let us help you with your multi-family property management needs. Take the time to contact us today to learn more.