Top 5 Tips to be a Good Multifamily Owner
With almost two decades on the property management side of multifamily, I recently switched positions and became an Asset Manager for a multifamily ownership group. This shift came to the table with a strong level of self-awareness and a consistent inner (and a sometimes outer and audible) mantra of “Don’t be that owner!”
While it’s easy to research everyone’s opinion on what makes a good property management partner, there’s remarkably less available to highlight what makes a good multifamily owner. Remembering that this partnership is an essential component in the success of any asset, I think it’s valuable to list out some concrete basics that, in my humble opinion, can be the makers and breakers of achievement. Would love to get everyone else’s thoughts and contributions too!
1.) Honest Communication. As in any relationship, communication and its translation are the pillars of stability. Owner partners need to make sure that their communication output is consistent, clear and collaborative and that it’s being received in the intended manner. Whether through a weekly property call, email, or site visit, the pattern of the communication needs to be steady and dependable. It all goes back to the concept of asking for what you want. But a side aspect of communication is that a good owner’s words are mirrored in their actions. If you say you’re transparent, collaborative, open to new ideas and seeking creativity, please put your money where your mouth is. It’s simple – Say it. Mean it. Do it.
2.) Accept your blind spots. Knowing that you don’t know it all is called being human. No matter how good any of us are, we can always learn from others. At the end of the day, when you partner with a PM company, you’re admitting that they are providing something you need, whether that’s the market insight, accounting and physical management services, staffing, etc. As an owner, the best thing you can do is admit that you don’t actually know it all and that you need help. It brings a cooperative spirit to the partnership that enhances the ability to collectively gain from individual deficits.
3.) Learn to accept the word “No”. When you hire a PM company, you’re hiring that individual and company to effectively operate your asset, which means to reduce and prevent liabilities to you, your asset and themselves. As owners, we have a tendency to create liabilities as we don’t carry with us the specific knowledge base and operational skill sets that our PM’s do. Remember – it’s why the PM was hired to begin with! One of my favorite quotes is “The road to hell is paved with the best of intentions” and I believe that to be abundantly clear when it is applied to owner requests. Just remember that there’s a rhyme and reason for good decisions. Sometimes “no”, “not yet”, “not right now” and “let’s talk about that offline” are the winningest remarks that may save you thousands of dollars, sleepless nights and days of regret. Think of your PM company as your most valuable asset (pun intended!) and your strongest insurance policy.
4.) Engage. Be present and available. Be responsive. Ask questions and learn from your team, your online reputation, your residents and vendors. Walk your asset and know it’s strengths and opportunities for improvement. Ask for feedback. Respond as a partner, with a mindful approach to tone, motivation and feedback. Be part of the solution and be the change you wish to see… you know the list of applicable euphemisms.
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5.) Stay in your lane. Know the inherent boundaries of your role. The focus of an owner is to financially improve the asset, maintain productive operations to stimulate growth and success for investors, etc. The role of the property management company is to hire, staff, operate, maintain and keep everyone involved happy, all while meeting budgetary constraints, dealing with emergencies and making money for you. They have a system, a process and an SOP to handle almost every situation. Their name is on the lease as an agent for you, so please let them be effective by staying out of their way. It’s ok to ask questions and suggest plays but at the end of the day, remember that your job is different than theirs. The end goal is the same, but the lanes are different and each role is essential.
Source: Multifamily Insiders