The 5 Essential Elements of Multifamily Property Management

There are many new technologies which have streamlined the management and leasing processes, however the critical management fundamentals are very much the same as they have always been. With property prices rising to new heights, any investor will need to focus on optimizing property management as a way to drive value, because market tailwinds can’t be counted on by themselves. Here are my 5 essential elements for successful property management of a multifamily property. If a property is not performing up to its potential (e.g. its’ not fully occupied), then one of these elements is at play. A full analysis of each area will help an owner or property manager identify the issue(s) and move swiftly to rectify it.

1.     First impressions count: Why ‘property curb appeal’ matters so much

2.     Asking the correct rental rate: Finding the Goldilocks sweet spot

3.     Sufficiently advertising the vacant unit: easier than ever before

4.     Vacant units needs to be ‘move-in ready’

5.     Staff: Harder to evaluate but might be the most critical component

If every one of these items is addressed, your property should be humming along at full occupancy (assuming the property is in a “stabilized” condition).  If its not, then one or more of these issues is at play and needs to be addressed. These elements need to be looked at relative to the property’s status within its operational strategy. For instance, if the property is undergoing a massive renovation, then the curb appeal and unit availability might be less than ideal during the construction period.

1.     Property Curb Appeal – First impressions are essential with a rental property. At a bare minimum, the street frontage, landscaping, and path to the unit must be clean, free of debris, and in great shape. The property in general should be clean, swept, free of trash or debris, painted, and all broken items must be repaired and in good working order. This may all seem obviously, but it’s easy to let little things go, and lots of little things will add up to make a property seem tired, dated, dirty, or drab. It is amazing what new landscaping and just a fresh coat of paint will do to make a property seem new and fresh.

2.     Rental Rates – This is where the principal of supply & demand comes in. Any good property manager is constantly monitoring the sub-market for what their competition is doing, with regards to rental rates and move-in concessions. Setting aside the issue of effective rents, which I will cover in a future post, the rental rates need to be set at the perfect level to attract qualified applicants. The “Goldilocks Principle” is in effect here- the rental rate needs to be not too high, not too low, but just right. There are different ways to analyze your product in relation to others.  A Rental Market Survey is the most rational and analytical way to price your vacant unit. By comparing your unit to other vacant units currently on the market, and taking into account the relative value of unit and property amenities, you can reach a reasonable conclusion as to your asking rate. Of course, the proof is in the pudding. A good rule of thumb is, if your vacant unit attracts more than 1 – 3 qualified applicants, your rate is probably a little too low. If you get zero qualified applicants (in a reasonable time), then your rate is probably too high. The sweet spot is 1 – 3 qualified applicants. 

3.     Advertising – With today’s explosion of web-based and rental app listing services (not to mention A.I.), there are more ways than ever to advertise your vacant unit, saving you time and money. There is always the old fashioned sign in the front of the property. In really hot markets, like Santa Monica or West Hollywood, you could literally get away with only a front sign, but why limit your options when the websites are (mostly) free? Websites allow you to save your unit profile, description and photos, so re-listing is as easy as updating the move-in date and clicking re-list. You can post virtual (video) walk-throughs and testimonials, etc. Communicating with potential renters is now mostly via text and email, although good old fashioned phone calls still exist.

4.     Rent-Ready Product. This sounds simpler than it is. So often I’ve started worked with owners who have buildings with several vacant units, and none of them are 100% ready to rent. Every day a unit is “off-line” is one day’s revenue the property is missing. Those days add up, and they can be the different between 95% and 90% occupancy over a year. Logistics and project management come into play here, so having a reliable and efficient process (or crew) for getting a unit ready is essential. Whether it’s just a basic cleaning and repair of minor issues, or a full renovation of the entire unit, having a consistent process for taking a unit from just-vacated to rent-ready / photo-ready is a critical part of the management process.

5.     Staff – I’ve placed staff last for a reason. Staff is harder to evaluate than the other 4 issues, which can be evaluated and measured with a sober and rational approach. Technology has made it easier to appraise the performance of the manager, leasing agent, maintenance tech, etc., but sometimes it’s not so obvious. Of course, if you know you have a subpar worker (or even the entire team, as potentially with a new property take-over), then the issue might be the logistics of the transition or difficulty finding a suitable replacement. Other times you are scratching your head looking at an otherwise “perfect” manager wondering why the building isn’t performing. By digging deeper into all the areas a manager covers (and applying metrics to as many areas as possible), you can usually determine the weaker areas of a manager or employee. Ultimately, property management and property performance can be measured and the staff, no matter how nice or hard working, needs to be held accountable by their results. Knowing which areas to apply metrics to is where an experienced property manager really brings value. 



When evaluating the performance of a property, an owner is looking at NOI and NOI growth. A building’s vacancy can be a strong indicator of the potential to increase rents. For instance, if your property is sitting at 100% occupied, with little to no move-outs, then almost surely the asking rents are too low. There is an optimum vacancy rate to achieve the highest possible revenue, which varies from property to property. It depends on the speed at which units can be re-rented and is usually between 2-5%. This ensures there is a steady rate of turnover, so your new vacant units can take advantage of the higher current market rents.

Jon Snow has been in multifamily property management and investment for 20 years, having managed portfolios as large as 3,500 units across multiple States for institutional clients. After working for several owners and 3^rd party managers, including one of the largest managers in the Los Angeles area, Jon started his own property management company to better serve owners and operators looking for institutional quality management. Jon also manages a real estate investment fund focused on the acquisition, development and management of multifamily properties throughout Southern California. For more information please visit www.crescent-canyon.com.