How can multifamily investors better maximize the performance of their properties and portfolios?
Multifamily apartment buildings continue to trend among sophisticated investors. All of the fundamentals in this sector are strong going forward, and apartment buildings provide the perfect income investment for both capitalizing on a new real estate boom, and finding protection in case residential sales falter on poor job and wage growth.
The popularity of multifamily has resulted in increased competition, especially in tight markets like the Northeast and Greater Boston area. Still, savvy investors can not only buck compressing cap rates, but are setting a new bar for returns and NOI with superior strategy and tactics.
Put these seven tips to work for your portfolio and enjoy better results…
1. Tech Savvy Property Management
While technology can sometimes make things more complex and distracting, today’s tech savvy MA property managers are delivering better results for their clients than ever before.
2. Better Multifamily Acquisitions
Leading investment firms are increasingly starting the process of demanding better returns earlier. Through better technology for accomplishing thorough due diligence, even on out of state properties, and employing local property managers earlier investors are negotiating better deals, with fewer negative surprises.
3. Better Tenant Selection
So much depends on tenant selection, yet so many rental property investors get it so wrong. Big data is providing more analytics and measurements than ever before. This is allowing the most experienced property managers to place new residents with incredible precision based upon both experience and intelligent data. This goes way beyond credit scores or income statements.
4. Get Proactive on Online Reputation Management
The most successful apartment building landlords and real estate investment companies don’t wait until there are complaints or competitors unleash a web based attack. They are proactive and build up a barrier that deters these efforts and refuses to allow them to be easy targets and victims in the first place.
5. Customer Satisfaction as a Top Priority
Do to the impact of social media and online reviews customer satisfaction needs to be among the top priorities, if not the first. Note; this applies to both residences and all applicants.
6. Better Leverage
Financing makes all the difference in spreads, cash flow and net returns. Leverage should be used. However, there can be massive differences in the NOI of different investors depending on the financing they use. Terms, interest rates and equity versus debt financing can all make a difference.
If MA multifamily investors take just one tip to apply from this report, it should be this one. Reducing taxes alone can make a monumental difference in real net returns. Consider self-directed IRAs, 1031 exchanges, and setting up captive insurance companies.