Multifamily real estate is an increasingly popular option for investors. With its track record as a stable investment through economic uncertainty and access to steady cash flow, it is an enticing alternative to traditional investments like the stock market or single-family homes.
However, finding success in multifamily real estate doesn’t come without a solid marketing and management plan. This article discusses best practices for multifamily property management and tips for multifamily investors to hire the right property management for their projects.
Have a Process for Selecting Ideal Tenants
The first step in developing an effective management system is to establish a process for screening and selecting tenants. This is an essential process that protects your investment and your tenants. Just as you must do your due diligence in vetting the best investment, you must also follow through on due diligence in selecting the tenants who will rent from you.
Some things you should cover during the screening process include the following:
- Monthly Income
- Credit check
- Background check
- Personal references
- Prospective tenant questionnaire and interview
A thorough screening process will ensure you find the best tenants for your multifamily investment and provide a level of protection for your tenants.
Establish Rules and Expectations for Tenants
Clear rules and expectations set the stage for establishing boundaries with tenants. Putting all the rules and expectations in writing is vital to avoid misunderstandings and conflict. Additionally, having tenants sign an agreement before moving in serves as a contract for both parties to refer to in the event of a dispute. The contract should also outline the steps taken when community rules are broken.
Community rules and expectations should consider the following:
- Quiet times
- Pet policies
- Waste management and recycling expectations
- Care for common areas
- Rules for outside guests
- System for addressing grievances
Keep Up with Maintenance and Repairs
You must keep each rental in working order and ensure all rental amenities are in good shape. This means you need to conduct regular property inspections and address all maintenance and repair requests as they arise. Perform a property inspection before and after each tenant to check the property’s condition and make needed repairs. You would also complete a seasonal exterior inspection to address gutter and window cleaning, tree pruning, snow/ice removal, and sidewalk repairs.
Technology for Streamlining Administrative Tasks
Now that we are well into the twenty-first century, getting on board with technology is essential to do business more efficiently. Many property management software programs on the market will make running a multifamily property more manageable.
Some features found with property management software include the following:
- Payment tracking
- Maintenance scheduling and reminders
- Communication tools
- Performance metrics
- Online payments
Hire a Property Management Company
It takes a lot of work to manage a multifamily property.
If you don’t have the time and resources to manage a multifamily investment on your own, you should consider hiring a property management company. This will save you the headache of tackling all the administrative tasks and ensure your investment is managed effectively.
Not all property management companies are created equal, so you must research any management company you consider working with to ensure they align with your needs.
Tips to Finding the Right Property Management Company
Part of your due diligence as a multifamily investor is being selective with whom you decide to work with. The right property management company will be able to follow the best practices of managing a multifamily property without you having to micromanage them.
Some key indicators of a good management company are:
- Responsiveness and good communication
- Demonstrated experience and reliability
- Provide a clear business plan and screening process
If a prospective partner can’t provide evidence to support one of these critical indicators, you should consider it a red flag and do more digging.
Do you want to maximize your multifamily investment with a reputable management partner?
Gimme Shelter Equity is excited to announce the addition of Welcome Home Property Management to our lineup of exceptional multifamily real estate services. Welcome Home Property Management will oversee four of our current investment properties, providing us with greater control and the opportunity to enhance the management of your investments.
Contact us today to learn more about our multifamily real estate opportunities and have your questions answered.