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.

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

I recently had an episode with a property manager and thought I’d share some obvious wisdom with everyone. We all have busy lives and from time to time we forget to do what we’re supposed to.

HERE’S YOUR REMINDER:

Stay on Top of Your Property Managers!

Don’t just assume that they are going to do everything you tell them to do.
I just dealt with a situation, where, had I been on top of things, there wouldn’t have been any problems. I needed a contractor to handle an electrical issue on an out-of-state multi-family property. I found one (always look for your own contractors and other servicemen - the odds are you’ll get a much better rate then the ones your property manager recommends) and set the ball in motion to get the job started last week. Today I get a phone call from the contractor asking when he can get into the property!

I was incensed!

Wasn’t my manager supposed to be handling that?
If I had stayed on top of things instead of just handing them off, they would probabaly have gotten taken care of (OR if they used their own people - managers work much harder when they get a piece of the action!). Instead, I had to get them on the phone and express my serious disappointment (ANGER).

That, my friends is another little lesson learned for me (AGAIN)!

Tags: bigger pockets, biggerpockets, contractor, electrician, landlord, lesson, management-company, manager, property-manager, real estate investing