Once you have a property manager in place to manage your multifamily property, you need to be able to track his or her performance. There are four reports that are essential to tracking a property manager’s performance. The information from these four reports will help you to evaluate the job that your manager is doing and alert you to whether changes need to be made.
The first report you need is the Profit and Loss statement. This is a standard report of income from the previous month and expenses so you can see your NOI. You should be sure that is in your hands no later than the 10th of each month.
The second thing you need to review is the check register. You want to see what checks were written from the previous month. If you can see where the checks are going, you can get a better idea of the cash flow and see who is getting paid what.
You also get an idea of whom the vendors are and you can question things that you do not recognize. The check register can also alert to you any other problems with the property. For instance, if you see an increase in the number of checks written to the plumber, you need to determine what the reason for that is.
An occupancy and traffic report can help you analyze where your tenants are coming from and what marketing campaigns are most effective. This report can alert you to which units are empty, rent ready and which ones are not. The worst thing to have happen is to have vacancies that are not rent ready and someone shows up who is ready to move in that weekend.
You can create the occupancy and traffic report in an Excel spreadsheet. Your onsite manager then fills it out on a daily basis. Each row is a day of the month and each column includes number of calls, number of showings, number of applications sent out, leases signed, follow ups, referrals, leads from ad sheets, leads from signage, leads from walk-ins, and leads from merchant coupons.
By looking at this report, you can see the relative amount of activity. If you are getting activity but not converting, then you need to find out why. That tells you that you need to re-evaluate your process.
The fourth report is the maintenance, or work order, report. When a tenant calls in with a maintenance problem there should be a work order to complete and a progression of steps. A work order summary log should include all of this information. The maintenance work order log lets you know that your tenants are being taken care of.
Whoever is managing your property needs to have a work order log. You want to see how long it takes for a work request to be filled. You do not want the turn around time to be a week. Customer service must be a priority with your tenants.
These four reports help you to monitor the overall health of your multifamily property. Good property management is the backbone of retaining tenants and keeping your property managers accountable is crucial to your multifamily property being a money-maker for you.
Tenants are the lifeblood of your properties. Marketing for tenants falls under your property manager’s job description but you need to be aware of the different ways to market. Your knowledge of marketing for tenants will enable you to direct your property managers to see how good a job they do in thinking of creative ways to get tenants. Here are some ideas to get you started.
The first place you can look for marketing ideas is through tenant referrals. You can offer $150 off rent in three-month increments. If the tenant that is referred pays rent on time, the tenant that gave you the referral gets $50 off rent. If the referred tenant is late paying the second month, they don’t get the $50. They will get it if the third month’s rent is paid on time.
Another source of referrals could be local churches. Churches can be a great resource of people who are looking for affordable housing. You could even offer them $50 for each referral that signs a contract. Not only is that a nice donation, but it generates great word-of-mouth.
Churches can also “adopt” your property. Churches have discretionary funds that can be used to assist people that are close to ending up on the street. Tenants can receive assistance when they have fallen behind on payments.
You can run ads in free local ad inserts as well as create bandit signs which are blank signs with handwritten messages on them. Some possible words for your bandit signs are: free rent, move-in specials, and under new management.
Banners are also a great way to attract potential tenants to your multifamily property. 10×4 banners are a nice size and you can order those from any number of websites or even find a local printer. You can have something as simple as “Move in Special” or “Under New Management ” and always be sure and include a phone number. The key is to catch people’s attention and draw them to your property.
Section 8 office flyers for Section 8 properties are also an effective marketing tool. You can put move in specials and cash back bonuses. You can advertise $500 cash back at move-in. You pay the tenant $250 when you get the check and $250 at the 6-month anniversary as a rebate.
Apartment placement agencies and local shop referrals with gift certificates are two more possible marketing venues. Beauty shops are one example of a local business that you can issue flyers to. You can get $25 gift certificates at the beauty shop and not only is that an incentive but it generates business for the shop owner.
Use your creativity when marketing for tenants. It does not have to be a huge, expensive campaign. Test various methods and you will soon find the ones that are effective and give you the best results.
Property management is considered to be a necessary evil by many multifamily property owners. As the owner, you do not want to be in the property management business. It will cost you some of your NOI to hire property managers but your time is much better utilized in finding deals than in managing properties. Here are some guidelines to assist you in finding good property managers.
Your aspiration should be that of the position of the asset manager of the property. You want to add value to your property and implementing a good property manager is crucial in attaining your goal of adding value. Part of your role as asset manager will be to properly manage your property managers.
The first step you need to take is finding a property manager. You can start by driving by properties that look well-managed and then talk to the manager of that property. Referrals, brokers and colleagues that own apartment buildings are also all good places to start when looking for property managers.
Now that you have some candidates, you want to get someone who is experienced with the type of multifamily property that you have. You need to look for someone with depth and who has a system in place. You’re not looking for the Lone Ranger; you want someone who has a back-up for when he or she is on vacation or out for any other reason.
Next, you need some good, solid questions and tips to get the answers you need. Here are thirteen to get you started:
1. How long have you managed properties in this area? What area of the city or what class?
2. Are you a certified property manager? What training have you had?
3. Can I see a property that you currently manage?
4. Do you have references (ask for at least 3)?
5. What is the compensation model? How do you want to get paid?
6. Ask to see a sample management contract – a proposed contract?
7. How often are your management contracts renewable?
8. Check them against the Chamber of Commerce and the Better Business Bureau and check with the real estate commission for any complaints.
9. Ask if they have any Class C experience. It’s different managing a Class C property compared to a Class A property.
10. Do you have any Section 8 experience?
11. Have they managed a property this size? Just because they’ve managed fourplexes doesn’t mean they are ready to manage a 50 or 100 unit property.
12. Request sample management reports. You want to see a report from property management software and not something done by hand. That’s a red flag that they have no systems in place.
13. What are the marketing methods for leasing this property? This is the most important question. You want to see how their thought process works. You want a property manager that markets for the tenants.
Good property management is at the heart of a money-making property. It is imperative that you put the effort into hiring effective property managers to allow you to assume your role of asset manager. The questions and tips above will put you in the driver’s seat and assist you in hiring a good property manager.
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