Managing a Multi-Family Property: What You Need to Know
Becoming a landlord is really exciting but can definitely be overwhelming. The more units you rent out, the more there is to manage, and the more overwhelmed you’re likely to feel. Unlike a single-family property, managing a multi-family property in Tucson (or anywhere) is very much an ongoing job that requires much more than just collecting rent each month. Managing this type of property is totally do-able with a little guidance, experience, and expertise. Here’s what we want you to know about property management for multi-family properties:
Marketing is Ongoing
Even if your property is stellar, you’ll have tenant turnover at some point. The more units you have, the more frequent that turnover will be. This means that you’ll have to consistently and actively market your properties as they come available.
This also means making upgrades and renovations, determining what amenities will bring you the greatest return, and making sure the rental unit is picture perfect. All of this can quickly become overwhelming, and if you don’t have in-depth knowledge of real estate marketing basics, things can go wrong.
Pro Tip: Consult with a professional once a year about your marketing plan or work with a property management company.
Showing Units is Time Consuming
It’s rare for tenants to be willing to move into a unit “sight unseen.” This means that as you’re marketing your vacant units, you’ll also need time to show them to prospective renters. We hope you’ll find the perfect renter quickly, but keep in mind that it’s possible that you may need to show a unit 20 times before you find the right tenant for your property. Unless you live on site, that can mean a lot of trips to the property and time away from your other commitments.
Pro Tip: Schedule multiple visits for potential tenants at the same time to make your showings easier on your schedule.
Screening Tenants is Difficult and Costly
Every applicant must be screened before you can move forward with processing their application. This requires criminal background checks, employment checks, credit checks, and personal references. Checking personal references alone can take an hour per applicant, making this one of the more time-intensive tasks on a landlord’s to-do list. As for the checks you can’t complete yourself, you’ll have to pay a third party run the checks for you.
Pro Tip: Contract with a company that runs background checks. You’ll get a better deal than if you paid per screening.
Writing a Lease Requires Legal Knowledge
The exact items required in a lease vary based on location. Arizona property management, for example, requires items in the lease that Missouri property management doesn’t. There can also be local laws dictating what goes into a lease—so Tucson may have requirements that differ from Phoenix, even though the two cities are in the same state and less than two hours apart. Make certain your lease meets all legal requirements at federal, state, and local levels.
Pro Tip: Here are basic items that you can find in almost any lease:
- Name of the primary renter
- Names of all other occupants
- Limits on occupancy
- Rental term
- Rental rate
- Deposits and fees
- Repair and maintenance expectations for all parties
- Restrictions on illegal activity
- Rights of entry for the landlord or management company
- Pet policies
Collecting Rent Can Become a Hassle
It’s important to maintain a very professional relationship with your tenants and create routine business practices for collecting the rent. When landlords collect the rent in person, this can make tenants feel as though there’s room to negotiate, which may include telling a story that will elicit sympathy and may get them an extension. But if you maintain professional distance from tenants and remain firm, this is much less likely to happen.
Pro Tip: Give tenants ways to pay you that don’t involve face-to-face interaction. Try using an electronic method or online process, or ask tenants to send the money through their banking app.
More Units=More Maintenance
In a single-family property, you may have one or two toilets to worry about, a single dishwasher, and one hot water heater. In a multi-family property, those appliances and tasks multiply by the number of units you’re managing. Expand that to include everything beyond the plumbing system and you’ll see the potential for a lot of maintenance hours on a multi-family property.
It’s unlikely that you’ll be performing this maintenance yourself, so your job here will be to find and screen contractors. Make certain they’re willing to be available to help you at all times in case of an emergency. Finding an army of trustworthy individuals to handle all of the maintenance tasks on your property can be difficult, especially if you don’t want to do it yourself.
Pro Tip: If you have a larger property, you might be able to negotiate reduced rates with contractors and repair businesses since you’ll be sending a steady stream of work their way.
Potentially Messy Tenants Can be Difficult
One perk of being a landlord is the numerous folks you get to meet. While you’ll do your best to review your tenants before they rent, no matter how thorough your screening process is, there are sure to be some interesting folks who end up renting from you. Among this cast of characters could be unreliable tenants, those engaging in illegal activities, and combative personalities who clash with other tenants.
Pro Tip: Anticipate as many of these issues as you can and address them in your lease. Have a plan in place for how you’ll deal with them so you can stick to the script when things get tense.
Property Management Companies Simplify the Life of a Landlord
All of this adds up to becoming a potentially stressful situation. Having a rental property portfolio can be lucrative, however, so don’t let the difficulties stop you from jumping in. One way to simplify things and manage more properties is to hire a multi-family property management company in Tucson. They can take charge of all the tasks—or just the difficult ones, if you prefer—and their fees can be deducted when tax time arrives.
If you’re looking for a way to make multi-family property management easier for you, be sure to contact our team at Bancroft & Associates. We offer professional and customizable solutions that are sure to make your rental property portfolio a success.