You’ve sealed the deal, and now, an attractive apartment property is a major part of your real estate portfolio. You’re happy, and so are the passive investors who helped to make your apartment syndication deal possible.
Now, it’s time to get serious, as your work has only begun. After all, acquiring an asset is helpful only if you take the right steps to manage it once it’s yours. The question is, where exactly do you start?
Fortunately, I’ve compiled the ultimate guide to effective real estate asset management, filled with the best real estate investment strategies. Here’s a look at the most critical things to add to your real estate investment management to-do list right away.
Real Estate Asset Management Step 1: Follow the Money
After you’ve purchased your apartment property, it’s time to take a good look at the budget. You need to make sure that the numbers are accurate; otherwise, your revenue-generation opportunity may end up costing you more than you bargained for.
So, to ensure that you remain financially afloat, examine your anticipated rental income each month, and compare this with your monthly expenses. These expenses may range from taxes to utilities or insurance fees. Also, be sure to calculate potential costs related to property upkeep and maintenance. You should also have money set aside for emergency expenses or vacant unit coverage. Be sure to budget in the cost of using a property manager to oversee your apartment community as well—which brings us to the next point.
Real Estate Asset Management Step 2: Secure a Property Manager
The great thing about hiring a property manager when you’re investing in apartments is that you don’t bear the burden of keeping up with finding and signing on new tenants, maintaining the units and grounds, executing leases, managing the budget for the property, and other similar duties. For a percentage of the rent you collect each month, this third-party service will complete these duties for you. You can also rely on the service to manage a range of tenant issues on your behalf.
Real Estate Asset Management Step 3: Complete Inspections
Just because you’ve relinquished control to your property manager doesn’t mean it’s time for you to coast. Quite the contrary. While your management company focuses on completing the tasks you’ve delegated to it, you should double-check the work it is doing to make sure that your business is being handled to the values and standards of your company.
Also, when tenants move out or in, be sure to walk through their units to ascertain that your property is in tip-top condition. If you notice any damage or appliances not working, for example, address them right away. Feel free to also complete regular inspections while your tenants are living at your property. Just be sure to give them 48 hours’ notice in writing prior to performing your property inspections.
Real Estate Asset Management Step 4: Maintain a Desirable Property
This is one of the most critical steps you can take when it comes to real estate investment management. After all, nobody looks forward to going to or staying at a property that appears run-down. Investing in landscape maintenance and appropriate outdoor lighting can go a long way in making your apartment property look cared for.
Real Estate Asset Management Step 5: Market Your Asset
If your apartment happens to be in an area with a lot of demand for housing, then advertising your available units is a smart move. This will enable prospective tenants to learn more about what your property has to offer, as well as how to contact you for a rental opportunity.
Your property management service can handle your advertising for you. However, whether you’re doing the advertising or you’re outsourcing it to a property manager, make sure that your ads end up on social media—an increasingly popular tool for marketing real estate rentals.
Real Estate Asset Management Step 6: Choose the Best Tenants
According to federal law, you cannot discriminate against a tenant on the basis of protected factors, like sex or race. Still, it’s paramount that you do screen them based on whether they can afford to cover their rent obligations each month. Check their references, including personal references and former landlords, to see how good (or bad) they are about taking care of the units they rent out. And verify their incomes to make sure that they can meet your established rent levels.
Real Estate Asset Management Step 7: Think Outside of the Box
Remember that your apartment property is more than just a piece of real estate sitting along a busy corridor: It’s an asset. That means your goal should be to improve your property’s value long term. Let’s take a look at a couple of ways you can do this.
First, look for any hidden costs that you may have previously overlooked. For example, when it comes to your property’s electricity, you could use one meter for the entire property, or you could allow every unit to have its own meter. Do some investigation to find out which option would save you the most money, then go with it.
Also, have you ever considered providing rental insurance to your tenants? Not many landlords have. But if you can become the anomaly by doing this, you could easily generate more revenue on a monthly basis without adding a whole lot of work to your plate.
Master the Real Estate Investment Management Process!
Embarking on the real estate asset management process can no doubt be an intimidating experience. However, it can also be an exciting and fruitful one if you know which steps to take from the start.
I have extensive experience with business development in real estate, particularly when it comes to apartment syndications. In fact, expert investor Theo Hicks and I offer free education through a top-notch Apartment Syndication School. So, we can help you through this process.
Get in touch with me today to learn more about how to successfully manage your property and thus watch your bottom line grow like never before.