3 Tips for successful Apartment Management and Operations

Becoming an investor in apartment complexes is a big step in real estate investing. Depending on how much time and ambition you have, you are going to either manage yourself or you are going to pay a management company to do that for you. Typically, investors will hire a company to do the work for them when the complex is 20 units or bigger. When this is the case you are passing a lot of the stress and work of to someone else.  When you are looking at a complex that is under 20 many investors will take on the management responsibility themselves. Being an owner of rentals as well as having managed a 72-unit complex in the past I’m going to give you my 3 tips to being a successful apartment investor when managing them yourself.

  1. Hire a live in property assistant manager

Obviously this is not what you need for a fourplex but when you are looking at 8 units or more this can be a big help. You are still the owner and manager of the property but you’re handing off some of the responsibilities. For example, have them do showings, collect the monthly rent, take maintenance calls, and even take care of some basic lawn care needs. All of this can be done for just giving a discount towards their rent. If you have a bigger unit where you have an office at the complex, they can staff that as well and receive free rent.          

  1. Set a standard and keep to it

The biggest mistake you can do in an apartment complex is start giving special privileges.  Once you let one tenant have a pet or accept late rent they are all going to take advantage of you. Decide from the beginning what your line is going to be and don’t change it. 

  1. Have a solid contract with a solid damage repair cost contract

It may be overwhelming at the beginning for a new tenant but it’s there to protect them as much as it is there to protect you. This way you can start off showing “I have rules and I expect you to keep them”. It will also protect you from having someone damage your property and not get all the funds you need from them to repair it.

  

These are just a few tips on what I believe helps being an investor in apartments to be a good experience rather than a bad one. Just make sure to do you your research and talk to those with experience before you take the big step.     

Why Hire a Property Manager

Having a competent property manager on your power team can add substantial value to your investment. I would recommend investors who are planning on doing a buy and hold strategy to get a good property manager to work with them. They can save you time, money and legal issues from tenants. I will outline eight reasons you should hire a property manager.

Screening Tenants: PM’s (Property Managers) have a lot of experience in screening for the right tenants for you. They know how to quickly analyze a good tenant from a bad one, saving you hassle in the long run.

Tenant Retention: It will be important for you to have long term tenants and one way to insure the tenants are happy is to have a good PM taking care of the tenants needs. A good PM will have general business practices that will ensure good tenant retention, so be sure to ask them what programs they have in place.

Rent Collection: Too often when investors try to manage properties themselves they let tenants walk all over them. A good PM will be your barrier between yourself and your tenants. PM’s are doing a job and will follow the terms of the lease and tenants know they don’t make the final decision, you do, and they don’t have access to you. Therefore, this process keeps you out of the light and lets the PM do their job.

Maintenance Cost: Knowing who to call to fix problems with your property is huge. Most PM’s know experienced contractors who have already been vetted by them, who can also give you price discounts on repairs. Keeping the properties in good condition will save you on costly repairs and keeps your tenants happy.

Vacancy: Shorter vacancy time is better for your revenue. A good PM can help improve and prepare the property for rent to maximize profits. They can determine proper rental rates to maximize the units. Lastly they can effectively market your properties to potential renters via many advertising mediums.

Legal Problems: Seasoned investors can tell you that a troublesome tenant can cause enormous legal problems. That’s why a good property manager is important to have because they will have knowledge of the most current landlord-tenant laws and can save you from any potential law suits.

Taxes: Most PM’s can help you understand what tax advantage you can claim. They can also help organize all your paperwork to give to your accountants.

Owners Benefits: A good PM will keep your stress level low because they will handle all the day to day activities on your properties. They have a network of people they will utilize so you don’t have to go searching around. They can free up your time so you can focus on other aspects of your business.

It will take time to find the ideal PM, so use this outline to find the right one for you. They can help protect your assets and keep your cash flow coming in. Make sure to interview several to get an idea on whom to go with.