Multifamily Asset Management Keys

Now more than ever, asset management is important to the success of a real estate project. There is an emphasis on operations to maximize asset value as the cost of capital (mortgage rates) increased in recent years.

We have been hyper-focused on operations of our multifamily portfolio. As we focus on revenue and expenses, here are some of the strategies we are implementing to optimize operations:

• Unit turns

A drastic way to increase residual income is renovating a unit. This usually includes paint, new LVP flooring, and stainless steel appliances. Many of the other “premium” features - such as light fixtures, hardware, and a consistent color scheme - do not substantially increase turn costs. It creates a nicer unit for residents and increases income for us. It is a true win-win.

• Water conserving products

Installing water conserving products - such as aerators, dual flush toilets, and low flow faucets and shower heads - helps reduce the water and sewer expense. This is one of the largest expense line items, and reducing it increases net income.

• Utility fee

Most apartment complexes will have separately metered electric but most do not have separately metered water and sewer. In addition to installing water conserving products, we sometimes charge a fixed monthly fee for water and sewer.

• Complex wide internet

We are considering a bulk internet plan for one of our complexes. This would result in us, as owners, paying the internet plan, and charging residents a monthly internet fee over and above what we pay. We are eligible for bulk discounts so residents will save money every month on internet, and we will create an income line item where none previously existed!

• Invest in common areas

Enhancing a resident’s quality of life is always paramount, and some ways to do that include installing a dog park, playground, and repaving the parking lot. The happier the residents, the less turnover there will be, which decreases vacancy and turn costs, some of the largest expenses.

• Midterm rentals

One of our complexes is strategically located across the street from a hospital, so we have made connections with human resources and are now the preferred destination for traveling nurses. Those nurses usually stay for 3-6 months and have vouchers to pay for the increased cost of midterm rentals. This is a great way to increase income.

• Professional management

Finally, simply having professional management is a huge value add for residents. Some owners still do not have resident portals so residents cannot make electronic payments or log maintenance requests. We ensure our property managers have a modern portal and timely respond to any requests or concerns.