There are a lot of similarities when it comes to managing a single family property and an apartment property. However, there are some very important factors and strategies you need to consider when it comes to hiring a management company for your apartment complex that go beyond the single family management style. First and foremost is the need to create a positive "Apartment Community". Maintaining a positive and thriving community can make or break the success of an apartment complex. Communities with great camaraderie and a sense of community pride tend to have happier tenants, experience less turnover and even less maintenance. Poorly ran communities can have just the opposite effect.
Additionally, the value and cash flow of an apartment complex is very closely tied to the efficiency of management and the finances of the property as opposed to just the physical structure of single family homes. To ensure the property is always operating at its maximum cash flow and maintaining its highest market value, a good management company will consistently strive to perform the following:
- Effectively Manage the Onsite Manager - Keeping and training onsite managers is key to building a positive community. This is a position that requires a unique skill set that comes from either a person's natural personality or from someone capable of learning the art of onsite management. This person needs to be reliable, trustworthy, customer service oriented, friendly and very positive to help create and maintain a desirable positive community attitude among its residents. At the same time, the onsite manager also needs to have a certain firmness about them to be able to hold residents responsible and accountable for rents, cleanliness, their behavior and respect for the property without disenfranchising them.
- Adding Value Through Repositioning - Repositioning is the process of taking an apartment complex that may not be running at full efficiency for one reason or another and repositioning the property to operate at its highest potential. The level of deficiency can range from the most poorly operated and conditioned properties to complexes that may just need a couple of tweaks to obtain maximum efficiency. In any case, Jackson Property Management has successfully repositioned several apartment complexes. Many of these complexes generate substantial more income than before the repositioning, even after accounting for the costs of management. Reposition plans can be made with an infusion of outside capital investment for a rapid reposition or can be made with a budget from the current operations of the property. Normally, the less cash flow available for repositioning, the longer the reposition plan will take to fully execute. Either approach is fine and a budget can be built to successfully implement a reposition plan either way.
- Balancing Expenses with Investment - An effective management plan will always work to balance Net Operating Income to its optimum level. This means knowing where money is well spent and where it is not. Although it's important to keep expenses low, it can be equally important to spend or invest money back into the complex to keep it operating at an optimal level. Cut too many corners and you may find decreasing rents or attract less desirable tenants. Make over improvements and you may find the improvements did not provide the expected extra return you were hoping for. Because of these factors, Jackson Property Management recommends having regular reviews (at least annually) with the property owners or investors of an apartment complex. This helps to ensure that we have a clear understanding of your long and short term investment objectives and that we are working to achieve them.
- Raising NOI and lowering Capitalization Rates - We understand that the market value of a multi-family property is tied to the relationship between the Net Operating Income and the Capitalization Rate. Almost all management objectives, except where noted otherwise, will be in the pursuit of minimizing NOI while simultaneously lowering the Cap Rate (lower NOI means better cash flow, a lower Cap Rate mean a more stable property).
- Preparing to Sell - When it's time to sell the property, we work hand in hand with the property owner to ensure the maximum selling value. We maintain an account reporting system specifically to always be able to calculate a multi-family property's value in just a few short minutes. This is true for you as the property owner, for Jackson Property Management as your manager and for our Commercial Network of Realtors. Keeping clean and accurate books that allows for quick analysis is key in preparing the property for sale at the best price. Good and accurate accounting will instill confidence for potential buyers which naturally will increase marketability. See the reporting we will provide to you every month below.
- Current Rent Roll
- Copies of any new Lease Agreement
- YTD and Monthly Profit & Loss Statements
- Current Property Tax Bill (if paid in current month)
- Current Insurance Policy (if paid in current month)
- Water Bill
- Trash Bill
- Gas Bill
- Electricity Bill
- Pest Control Bill
- Pool Maintenance Bill (if applicable)
- Landscape Bill
- Business Permits and License Invoice or Receipt (if any)
- Laundry Lease Statement (if any)
- Maintenance Expense: vendor invoices, materials receipts, etc.
Few companies have the multi-family experience and specialization to match that of Jackson Property Management. Each property is unique and an in depth property evaluation between property owner and Jackson Property Management will normally result in better utilization of the property than a one size fits all approach. Here are a few more ROI Boosters we may be able to consider for your property.