How to Have a Successful Multi-Family Investment Property

How to Have a Successful Multi-Family Investment Property

  • Jon Grogan
  • 07/23/23

Real estate is one of the most important investments you will ever make. Not only does real estate provide you with a home to live in, but it's also one of the most stable forms of passive income. While many people choose to invest in single-family homes or vacation rentals, others search for alternative options. For some, multi-family properties are one of the best types of real estate investments. So what constitutes a multi-family property, and how do you ensure your multi-family investment property will be successful?

A multi-family property is a residential property featuring more than one home. This can include duplexes, triplexes, or even large apartment complexes. So many different types of multi-family properties are available. Investors can find plenty of opportunities to generate substantial profits. If you are searching for your next multi-family property, you will want to do everything possible to ensure your investment succeeds. Here are some of the best ways to successfully manage your multi-family investment property.

Don’t take on more than you can handle

If you are new to real estate investment, finding your first investment property is one of the greatest challenges. Even if you have purchased real estate before, buying a single-family property is very different from purchasing a multi-family property. For many, it can be difficult to know where to start. What type of multi-family property should you invest in? What type of property will give you the greatest return on investment? First and foremost, choose the right property based on your current lifestyle.

Do you have the budget to hire a property manager or keep a maintenance crew on staff? If you do not have the budget for these things, you should avoid purchasing an apartment or condominium complex. Even if you devote all of your time to maintaining your properties, there aren't enough hours in the day to fulfill all of the maintenance requests, run the properties, and keep everything organized. Start with what you can handle. For many, a duplex or a triplex is a great starting point. Some landlords even choose to live in one of the units and have their tenants pay enough rent to cover the mortgage. This can be a win-win if you want to save even more money per month.

All in all, take on what you can handle. You can always purchase more properties as you increase your net gain.

Pay attention to your cash flow

Your multi-family property can be one of your greatest sources of income. But if you're not careful, it could also be a money pit that hemorrhages money month after month, leaving you in massive debt. The last thing you want is for your income property to be a source of stress. One of the most crucial things you need to consider is your cash flow. What is your monthly net income, and how does that compare to your expenses? Expenses are inevitable as a landlord. You will need to pay for upkeep, utilities, property taxes, and other things. You will also need to budget for repairs, such as appliance repair or HVAC maintenance. If you have to deal with property damage from a flood or other natural disaster, you will have to pay for some repairs out of pocket, even if your insurance eventually reimburses you for the costs.

Pay attention to your cash flow and figure out where your expenses are going. You always want to make sure your profits outweigh your expenses.

Keep a positive relationship with your tenants

If you're in the business of owning multi-family investment properties, tenant relations are the name of the game. While your multi-family property is likely appreciating, your tenants are your number one source of income. That means your livelihood depends on keeping your tenants happy. So what are some of the best ways of building and maintaining strong relationships with your tenants?

Give them what they want. If your tenants request extra amenities, such as new appliances or a yoga studio, do what you can to accommodate them. Your tenants are always willing to pay more if you give them the features they want. By keeping a positive relationship with your tenants, you are far more likely to attract tenants who want to take care of your property and stay with you for years to come.

Take care of maintenance requests promptly

As a landlord, there's nothing more important than keeping your tenants happy, and one of the best ways to do that is to keep up with maintenance requests. The last thing your tenants want is to be inconvenienced. They are paying you excellent money to ensure your property will make their lives easier. So when their dishwasher or oven isn't working properly, they expect you to be on top of things. That means keeping your maintenance request response times low.

Depending on the size and scale of your operation, you are either on call to do the repairs yourself or have a maintenance crew who can handle service requests promptly. It's also important to remember that some service orders take higher priority than others. If your tenants are without electricity, especially during the summer heat wave, this is a massive problem. It will make the unit uncomfortable, and living without air conditioning in the summer can be dangerous. Take care of your tenants' maintenance needs, and you will establish yourself as a reliable, trustworthy landlord.

Find your investment property today

Are you searching for investment real estate? Whether it's your first property or your 10th, you need an expert agent by your side to help you find the perfect rental property. When you need the best, choose Jon Grogan. Backed by over 10 years of industry experience and an unrivaled instinct for multi-family properties, Jon goes above and beyond to help his clients find the best Manhattan Beach investment properties on the market. If you're ready to begin your property search, give Jon a call. He'll help you build your portfolio.

Work With Jon

He knew his master’s degree in counseling psychology combined with his exceptional analytical real estate talents would be a great fit to support owners, buyers, tenants, and vendors navigate through the difficulties of a real estate transaction.

Follow Us on Instagram