One of the key factors to success when investing in apartment buildings is having the ability to keep our tenants happy. Happy tenants will stay at your property longer and this reduces turnover. High and steady turnover rates can have a negative impact on the apartment building investor’s bottom line.

The first and most obvious tool that an apartment building land lord can use is the control he or she has over the price of rent. The rent should me at market. I have found that people usually don’t mind paying a fair price for a product or service that has a high perceived value. There are many things that an apartment building investor can do to make sure that the perceived value of their renting experience exceeds the rent that their tenants are paying. I am not suggesting that you lose money every month by throwing appreciation parties for your tenants but a little bit of creativity can go a long way towards making your tenants truly enjoy living in your apartment building.

The apartment building landlord should constantly be thinking of ways to improve the experience of his or her renters. Here are some creative ways to bring more value to your tenants and keep them around as happy renters for years to come.

1. Sponsor a pot luck dinner at the clubhouse every six months so that tenants can have an opportunity to meet and mingle with their neighbors. It is reasonable to assume that a renter will feel more attached to an apartment building if there is a sense of community and group experience. Pot luck dinners will encourage the renters to meet each other. In addition, at the pot luck dinner, you can sponsor a free raffle contest. The winner might receive a $100.00 gift certificate to a local chain restaurant. This raffle can be advertised along with the dinner and it should increase the number of people who actually attend.
2. Distribute a newsletter to residents on a bi-monthly basis that offers some interesting and informative contents about the apartment building or community. This newsletter can actually be written by the residents themselves. I am sure that there are talented writers and illustrators living in most apartment buildings anywhere in the country that would be happy to help. You may even be able to have the printing and distribution paid for by a local company targeting your renters as potential customers. For example, ask around at the local pizza restaurants. You can offer them free advertising and a prominent placement in your newsletter in exchange for them handling the production cost.
3. Send out birthday cards to your renters. Everyone supplies their date of birth when applying to rent. Use this information to send out nice birthday card expressing your thanks for having them as happy renter.
4. Organize an intramural kickball team. This one may take some work but you can contact other apartment building management companies to see if they are interested in forming their own team. Your newly formed kickball team can meet theirs at a nearby park. The winner of the game could win a prize such as a tshirt. The t-shirt, of course, can advertise your rental property.

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Tags: apartment building investing, apartment building management

Many small apartment building owners make the mistake of not treating their tenants as valued clients.  It’s easy to do considering the fact that many tenants can really cause headaches with late rent payments, noise complaints and other day to day issues that can be a thorn in the side of a small apartment building owner.  Many small apartment building owners also make the mistake of taking it personally when a tenant is late paying his or her rent.

The apartment building owner may be a real clinical and calculating mathematician when analyzing the return on investment for their property but when it comes to dealing with the tenants they may take some things personally and get heated under the collar.  This is bad for business.  Professional multi-family owners and managers have learned this the hard way.

In most areas of the country tenants will have a choice of where they want to live and they have chosen to live where they are for one or more reasons.  Maybe they are living in that complex because it is close to work or the supermarket or the shopping mall.  Maybe they like the fact that the apartment building is located on a nice residential street.  Maybe they like the playground for their kids.  Whatever the reason that the tenant has for living at a particular property is known as his “reason for renting”.  However, if the “reason for renting” is countered by something equally or more negative, such as unresponsive maintenance technicians or rude and unhelpful office staff then the tenant will begin to look at other properties to live in when the lease expires.  In other words if the problems and negatives experienced by the tenant are bad enough they will become his or her “reason for leaving”.  If the apartment building owner or manager gives too many “reasons for leaving” to too many tenants it will have a costly impact on the net operating income.

The cost to replace a lost tenants over time can far outweigh the extra efforts and costs associated with maintaining a strong base of perpetual tenants with good management practices.  Going a few steps above and beyond will ensure that your tenants have a positive renting experience. 

A few things that a the owner could do to create a better living experience for his clients/tenants could be the the following:

1)  Create a community blog online where other residents could get to know each other.

2)  Create a direct deposit through your financial institution to make it easier for tenants to pay the rent.

3)  Throw a Halloween party.  Throw a pizza party.

4)  Give incentives to pay rent on time. For example, you could offer a $75.00 gift certificate to a nice restaurant for the tenants who pay their rent on time all year.

5)  If your community is large enough you can create an online newsletter.

6)  Try to arrange a group discount for all renters at your complex for car washes.  You will be surprised how many business will offer a group discount if you just ask.

As you can see, with just a little bit of creativity you can provide a tenant living experience that will foster many “reasons for renting” and fewer “reasons for leaving”.  In fact, most of the suggestions above can be implemented for little or no cost.   If you even retain just a slightly larger tenant base using the above methods you will be amazed by the return on investment.

Tags: apartment building management, apartment building owners, landlord, manager, property-manager, tenant

The decision to buy an apartment building investment for the first time can be a fearful experience for many real estate investors. The task of owning and managing an apartment building can seem overwhelming and the feeling of fear usually is due to the unknown factor of the “what ifs”. The “what ifs” are all the things that could possibly go wrong with ownership of an apartment building. Usually the “what ifs” seem a lot worse in your mind then they actually are in the real world. Remember, an apartment building investment is insured against most of the “what ifs” and proper preventative maintenance and management can prevent most problems before they arise.

Apartment Building Investment “What Ifs”:

1. What if my tenants don’t pay the rent and refuse to leave?

   What if they stay in my apartment like Michael Keaton did in the movie Pacific heights?

   Thankfully, all states have a legal process for the eviction of tenants. In some states tenants have more rights and the landlord more obligations then others. As part of your management team it is recommended to have qualified legal consul who specializes in real estate law. Just follow the process. Also, remember to be especially diligent.

2. What if a tenant slips and falls and sues me?

   If you own many apartment building rental units then chances are that you will be sued on occasion. Once again, this is the cost of doing business. Don’t believe any real estate guru that tells you that you can get rich overnight without doing any work. Remember to keep detailed records of all maintenance that you perform on the property. These records could be useful in defending lawsuits.

3. What if I can’t rent out the units and therefore can’t pay the mortgage?

   Make sure you research the rent rolls of the property you are purchasing very carefully. Look to make sure that tenant turn over is not too high. Are the rents you are asking in line with the rest of the area for comparable buildings? Are you doing enough advertising to ensure that you have a steady number of applicants to fill empty units?

4. What if there is a fire?

   Insurance will cover accidental fire damage to the building.Again, make sure that you are keeping up with preventative maintenance.

Remember, just a small amount of diligent preventative maintenance along with a good insurance policy will protect against most of the apartment building investment “what ifs”.

Tags: apartment building investment, apartment building investment management, apartment building management, apartment maintenance, apartments, landlord, real estate, real estate investing, tenant

Usually apartment buildings with more than 20 units are managed by professional property management companies and those buildings with fewer than 20 units are usually managed by the owner and a live in property manager. Regardless of who is managing the apartment building it is important to follow some general principles and tips to make sure that operations run smoothly.

The management of an apartment building should be efficiently run like any other business. The manager should look to improve the client-tenant living experience while minimizing costs and increasing profit opportunities whenever possible.

One important legal issue that should never be ignored are the Fair Housing Rules which prohibit discrimination based on race, gender, age, disability, marital status, and sexual orientation. Everyone involved in property management must follow these rules.

Another important matter to that can generate complaints with the management is the issue of who is responsible for repair and maintenance of the apartment units. The property owner should clearly write out in the lease agreement who is responsible for what repairs. State and federal laws should also be consulted because it is illegal to shut off essential utilities for the failure to pay rent. In other words, if a renter is late on rent it is illegal to shut off the electricity or water.

The apartment building manager should succinctly write out the following information in the lease agreement:

• The tenant’s responsibility to maintain a clean rental unit and also pay for damage caused by neglect or abuse.
• The tenant should alert management of any dangerous or defective situations with the property. For example: faulty wiring, water leaks, mold and fire hazards.
• The manager will provide tenants with the official policy and procedure for dealing with complaints and repair requests. For example, what the hours of operation are for the maintenance and repair staff and how fast tenants should expect a remedy to complaints.
• Have restrictions on tenant alterations on their apartment with out your permission, such as adding appliances, painting, etc.

In general, maintenance and repairs should be handled as speedily as possible to avoid further complaints from the tenants. Major issues like plumbing leaks and heating/cooling problems should be dealt with in 24 hours. An open line of communication between tenants and management is an essential ingredient to good overall relations. Management should keep the tenants informed of when and how the repairs will be made and the reason for any delays.

Tags: apartment building buyer, apartment building investment, apartment building management, buy apartment building, property management, property-manager