A surprisingly high percentage of people see owning their own business as a desirable goal. How high? For men and women, respectively, it’s around 70% and 60%.
Some view real estate investment and management as the right business opportunity. It lets you stay local and deal with a comparatively small customer base once you have tenants.
If you’ve never done the work before, though, multi-family real estate management can prove challenging. Keep reading and we’ll give you some key tips for getting started.
1. Do Your Homework
A real estate investment property isn’t just about how things look now, but how things will likely look in 5, 10, or 15 years. You must consider neighborhood trends. Is the area in decline, gentrifying, or stable.
How much will renovations cost? Can you charge enough in rent that you’ll recoup those losses in a practical timeframe? What will the market bear?
Is the property positioned near useful shopping opportunities or a major local employer?
You must balance all of this information and weigh whether you’ll ultimately gain from the investment or not.
2. Leverage Technology
Like most major industries, real estate benefits from a healthy ecosystem of software. Multi-tenant management software helps keep you organized as you advertise, screen, and sign leases with new tenants.
Try out demos of different software packages and find one that suits your work approach. Remember, features don’t mean much if you hate the software and can’t find anything in it.
3. Tenant Selection
Tenant selection will play a huge role in the successful and enjoyability of your real estate experience. You will need some basic screening factors, such as minimum income and personal recommendations.
There are some areas you must avoid asking about at all costs because they violate the Fair Housing Act. Some of the topics you can’t ask about include:
- Marital status
- Sexual orientation
You can’t disqualify someone for any of these reasons or even criminal convictions in some states.
4. Use Checklists
Make copious use of checklists. They help you formalize processes and make sure things don’t get missed. A basic move-in inspection checklist and move-out inspection checklist ensures you don’t charge a tenant for problems they didn’t create.
Unless you have a lot of free time or you’re a licensed contractor, you should develop good outsourcing relationships. At the least, you should have numbers for a reliable electrician, plumber, and contractor.
It’s also quite common for investment real estate owners to outsource lawn care/landscaping duties to a professional service.
Parting Thoughts on Multi-Family Real Estate Management
Multi-family real estate management is a lot of work. You can simplify the process with substantial research, leveraging software and checklists, and outsourcing.
Tenant selection matters a lot because good tenants prove profitable while bad tenants soak up time and resources. Just take care you don’t violate any provisions of the Fair Housing Act while screening potential tenants.
Outland Real Estate specializes in real estate along California’s Central Coast. For assistance locating or purchasing a multi-family property in that region, contact Outland Real Estate today.