Tips on How to Be Successful in Multifamily Investing

[Andrew Freed]

Going from 1 to 18 rental units in 2 years has been a fun journey. Here are some lessons I learned along the way that helped me succeed in multifamily investing!

• 
  Always Screen Incoming Tenants!
• • Screening tenants is one of the most important things to ensure success as a landlord. Be patient, wait for an applicant to pass your criteria. If you aren’t getting any applicants that pass your criteria, consider lowering the price. One to two month vacancy is always less painful than an eviction.
• Review Square Footage vs. Number of Bedrooms per unit
  • A great indicator for a value add opportunity is square footage. If you find a three family with over 4,000 square feet, review the layout. If it’s listed at a 6 bed 3 bath price but it has a lot of square footage, there's a good chance you can create a few more bedrooms per unit, which will translate into a better return on investment.
• Always Check for Leaky Toilets
  • A leaky toilet can result in an increase in the water bill by 3 to 4 times. Always check for leaky toilets immediately upon closing on a property. I’ve experienced leaky toilets in 50% of my acquisitions resulting in thousands of dollars in wasted water.
• Ensure current tenants are month to month for quick path to stabilization
  • When tenants are month to month, getting them closer to market is as simple as a negotiation or notice. When they are locked into a lease, it runs with the building hence month or month leases is a quicker path to stabilization.
• When turning a unit, always keep as much as you can!
  • Keep what you can during a turn to reduce costs. For instance if the unit has old cabinets, can you refinish them or change out the faces instead of replacing? It'll be greatly cheaper which will translate into a better ROI and refinished cabinets look almost as good as new cabinets.
• Parking and laundry will reduce vacancy.
  • Two of the top amenities tenants request are parking and laundry on the premises. Having these amenities will reduce the likelihood of tenants moving to another rental unit.
• Set tenants up for one automatic payment system
  • When you own many multifamily units, collecting rent each month can become a time consuming task. Automate it as soon as possible. I use apartments.com and set up autopay on day one of owning the property.

What tips have you learned? I'm a lifelong learner and always looking to add tips to my repertoire. I appreciate the insight.