The ability to improve your multi family management capabilities boils down to you being a good asset manager. The sole purpose of multi family management is to increase equity by raising NOI to cap out the property. Asset management boils down to four areas: property management, repositioning, adding income sources and reducing expenses.
It is important that you understand the difference between asset management and multi family property management. Multi family property management is the day-to-day operation of a property. Multi family property management involves keeping the multi family apartment property up, collecting the rent and maintaining it.
Asset management on the other hand is adding value to the multifamily property. Asset management is the fun part of owning multifamily apartment property. It is more than multi family apartment management. This is where you let your creative juices flow and think up ways to raise rent and decrease expenses. Every time you consider a multifamily property deal, you need to be examining it through asset management lens and not just the multi family apartment management angle.
You are not a retail buyer. You are not looking to improve your multi family property management skills but are looking for ways to improve your multifamily apartment property and add value to it. Multi family Property management is pushing the rents, raising the collections, increasing the occupancy, and keeping expenses in check without much capital expenditure. All this involves making improvements without investing a lot of money.
Repositioning is when you change the appearance, and the image or reputation of the multi family property. If you are rehabbing properties and changing the tenant mix it may involve capital. Conversion from an all bills paid apartment property to an individually metered multi family apartment property may be entailed. Even a simple name change can many times help change the reputation.
Adding income sources may involve adding onsite laundry facilities or putting in vending machines. You could also amenities like cable or internet services. Other possibilities include a childcare facility or storage units. While these may add the scope of work in mult family apartment management but it will certainly increase your net rental income if done properly. Fac is, you can really get creative when it comes to thinking of additional sources of revenue for your multifamily property and then even hire the services of a professional multi family apartment management firm.
Reducing the expenses on your multifamily apartment property is a process of multi family apartment management that entails looking at every expense in operations to see if it can be curbed without affecting the value it provides to the tenants. Ofcourse you should not look to become slumlords but instead means that every expense should be something that can be optimized. Your responsibility to your tenants is to provide safe and decent housing and your responsibility to yourself is to minimize your multi family management costs.
When evaluating a multifamily property keep in mind the multi family management aspect and it will assist you in determining whether it is an investment deal worth pursuing. At the same time, if you currently manage a multifamily property, you always need to find ways through which you can add value to your property. Proper multi family property asset management will enable you to cap out your property in the shortest time possible.
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