Keys to Multifamily Asset Management for Investors
What are some things you would look for with the property manager to know that they’re doing a good job?
Well, so, you know, one of the things is obvious. What kind of income and expenses do you have on the property? Are you making the right numbers? Are you hitting your budget? Do you have enough revenue coming in or the revenue that you’re supposed to have coming in? If if they are spending money, what are they spending on? Is it actually going to improve the property? Is it going to help retention? Is it going to help us raise the rent? What’s the plan with that? And of course, the other big thing, too, with managers is a good manager should actually create or help you create a budget for your property. And we actually had one, the one that I talked about earlier, that overspent like crazy. We asked him to help us create a budget for this property that we had in Pennsylvania. And his response was literally “Budget? Budget? You know, you’re the owner. We tell you how much money we need to take care of stuff and you just send it to us.” “It’s like, dude, this is a business.” I know a lot of people say that apartments are real estate. No, it’s not. Apartments are a business. You’re buying a business that generates a stream of income. And just like any other business, when you go down to Walmart and Joe’s Crab Shack and all these other businesses that you live near, they have budgets. They have budgets for payroll, for repairs, for taxes, all the stuff that goes along with it and even expectations for revenue. And you need to have a budget in order to know that you’re on track, right? If you don’t have a budget, you can’t keep score. And if you can’t keep score, how do you know if you’re winning or losing?