Renting Your Multifamily Units: Three Issues to Be Aware Of
Multifamily housing is both an efficient and practical way to maximize the profitability of a property. While there are benefits to owning properties in diverse markets, when you have a multifamily property to manage, you can more easily focus on addressing the needs of your tenants all in one place.
However, there are key differences between managing several single family properties and managing a multifamily property. You’ll want to keep these three points in mind as you endeavor to manage your property:
Increased Administrative Requirements
Before diving into managing any property, you will need to first have your business plan in order, including your administrative process. This means everything from your branding/marketing to your accounting needs to be coalesced into a well-oiled machine. If you are doing it all yourself, you must take the time to sort out the details prior to accepting any applications, as it only gets more complicated as transactions begin. Remember, you can be audited at any time, so having your paperwork records in order is an absolute must.
Multifamily properties, whether it’s two units or thirty, will automatically multiply your administrative workload exponentially. Every application, every unit, and each tenant, must be filed and accounted for carefully. With multiple leases, contracts and letters going back and forth, this can be daunting for one person to handle. Organization, consistency, and processing administrative needs on a daily basis is part of managing a multifamily property.
Neighbor Conflicts & Resolutions
Nearly everyone who has rented a property has had to deal with a complaint made either by or about a neighbor. With a single family residence, tenants are much more likely to understand that you cannot control the annoying habits of a neighbor whose lease you don’t hold. In a multifamily setting, you may find yourself often being pitched between two units.
When tenants live close to each other and share common areas, it’s natural that their lives will overlap in some way. Ideally, it’s in a pleasant, neighborly, manner. Often, it’s a bit less than that. Remaining compliant with Fair Housing laws requires that you, as the landlord, not become personally involved. That introduces your own implicit biases into the equation and can lead to legal trouble down the road. The best solution is to address any lease violations quickly and plainly, in writing, to any unit who is in violation. Outside of lease violations, you simply cannot mediate between tenants who personally dislike each other. Documenting complaints and all communications should already be part of your administrative process – continue to do so. Inform the tenants of the legal limitations of your involvement – you only manage the properties and leases, not tenant behavior.
Though your tenants live separate lives in individual units, they share one roof. When it springs a leak, everyone will have work to do. Shared walls, floors, plumbing, and roofs make maintenance a particularly tricky task. One irresponsible tenant can damage an entire property, and as we saw in this year’s ice storm (which will likely increase the need for apartments), there are some forces that can affect an entire building at once. While some tenants know how to properly assess a situation and change their behavior as needed to prepare (and because you send out seasonal and extreme weather tenant letters – or you should be) – it won’t matter much if one tenant does absolutely nothing to prevent damage to the property.
Communicating with your tenants in advance is the best course of action. Responding to work orders as quickly as possible is another. The benefit of multiple tenancy in a structure is that while there may be one tenant who will not report an issue, there will be another who will. Maintaining the repair and integrity of your property will ensure that it is a reliable source of income for years to come, and your tenants are your eyes and ears in that respect – use them!
We understand that managing a multifamily property is a big undertaking. Even a duplex is a lot of hands-on, round-the-clock work. Frontline Property Management has the experience and the staff to handle your multifamily management needs! Our tenant coordinators work every day to maximize your occupancy as well as handle your everyday administrative needs.
When you are ready to work with a team that protects your frontline so that you can increase your bottom line, contact us!