Approach to managing a 5-20 units multi family vs 30+ units multi family

5 Replies

I'm looking at two interesting deals right now. One involves a multi family of around 20 units. The second involves a 32 units apartment complex. 

On the first one, the current owner has been self managing the units and had a reasonable NOI. On the second one, the property was managed by a professional property management company.

My question to the more experienced multi family owners. Do you take a different approach when letting your property being managed, when you have 20 or less units or 30+ units? Does the approach change, if you live near the property or if the property is further away (in state of out of state)

I use the same property manager for my 20-unit as for my sfr and 2-4 units. They were already managing several apartment complexes of this size (including the one I bought). You definitely want a bigger property manager with experience with apartments because there are some different issues such as boilers, parking, fire safety.

You should get a lower %age rate for them managing a lot of units in one location.

Originally posted by @Henri Meli :

I'm looking at two interesting deals right now. One involves a multi family of around 20 units. The second involves a 32 units apartment complex. 

On the first one, the current owner has been self managing the units and had a reasonable NOI. On the second one, the property was managed by a professional property management company.

My question to the more experienced multi family owners. Do you take a different approach when letting your property being managed, when you have 20 or less units or 30+ units? Does the approach change, if you live near the property or if the property is further away (in state of out of state)

 There is no difference until you get to a size whereby you can afford pay roll.

Great topic hope to be in this situation looking forward to the insightful post of some experienced BP members.

Thanks @Jeff Kehl . For my single family rentals, I do pay some money (1/2 month first rent) to my property management company, when they find a renter. Is it the same in multi family as well? I would think this could be quite expensive.

Thanks @Ben Leybovich . Is there a magic number? 100 units? more?

Yes, it;s hard to make the numbers work under 100. But 120-140 is better.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here