Multifamily homes are great for investors because they provide multiple, cash-flowing units and can help you build a strong real estate portfolio quickly. These properties are also much easier to manage than multiple homes in different locations. They may even be able to provide you tax savings, among their many other benefits. If you’re invested in multifamily real estate, or are considering a multifamily home for the first time, you’ll want to make sure you’re doing everything you can to keep the property’s cash flowing in the right direction. In this post, we go over a few of the things that you can do to help keep your investment profitable.
Tip #1: Make sure the units are appropriately priced
First and foremost, you need to make sure you’re charging the right amount in rent for each unit. In order to do this, you’ll have to do a little bit of research on your own. Look into rents for multifamily units that are like the ones in your property. That mostly means units that are of a similar size and age, although keep in mind that certain renovations/amenities can affect that price. The location of the property and the neighborhood it’s in can also be a factor. If you’re having trouble finding a tenant after a while, you may actually be overcharging, so don’t be afraid to lower the price a bit until the unit is filled.
Tip #2: Keep the units occupied, but also screen your tenants
Of course, in order to get the most profit from your multifamily home you need to make sure every unit is occupied and producing rental income. That doesn’t mean that you should rush to fill every unit though, and that can actually come back to bite you. You don’t have to look far to find horror stories of awful tenants and costly evictions. To avoid such a situation, you’ll need to spend some time screening your tenants. Most landlords will recommend you run a credit check, since it helps you get an idea of the tenant’s ability to pay you in a timely manner, and some suggest a background check as well. Although it will likely take more time to find the right tenant, these actions can save you money, or maybe even more importantly peace of mind, in the long run.
Tip #3: Stick to practical renovations
If you want to increase the rental income of a particular unit or property, the simplest and most cost efficient way would be to Refresh it instead of doing a complete renovation. You should take care not to overspend, and instead you should focus on Carpet Cleaning, Painting, Janitorial, and Refinishing the bathrooms and kitchens – all of which Refresh can do for you with one call! Essentially, that means avoiding style choices that may not fit everyone’s tastes. A fresh coat of paint, new lighting fixtures, and deep cleaning flooring are some of the most effective ways to update a unit and increase its value, while not costing you too much. If you are planning major renovations, try and focus on high traffic areas like the Kitchen, Bathroom, and living areas. Remember, your goal is to add as much value to the property as possible while minimizing the financial hit you will take.
Tip #4: Maintain the property regularly to avoid future complications
This next tip is actually great advice for all sorts of real estate investors. You should have any property you’re investing in inspected to uncover any major issues that may need costly repairs. On top of that, regular maintenance and inspection of a property will make sure any problems that do occur don’t spiral into larger, more complicated issues. As for multifamily properties, the units will experience regular wear as they’re occupied, so you should conduct move-in and move-out inspections to uncover any items that may need attention. Not only will this prevent more costly repairs down the line, but it also means you’ll have an easier time filling any vacancies, since great units will attract more tenants.
Connect with Refresh today to supplement your regular maintenance or to get those make ready’s turned faster and more cost effectively!