Multifamily Asset Management: Essential Overview

Three Types of Management

1. Property Management
   • This includes: Rent collection, repairs, landscaping and trash, leasing, & tenant services.
2. Asset Management
   • This is the management that you will need to do to manage the property managers.
3. Portfolio Management
   • This is when you have multiple properties and need to manage performance across multiple properties.

Key Responsibilities of an Asset Manager

1. Building a Team
   • Members Needed: Acquisitions Manager, Accounting & Finance, Real Estate Attorney, Property Manager, Bank/Lender, Insurance Broker, Contractor, Admin Staff, Underwriter, Conservation Specialist.
   • Finding Talent: Network, post on job sites, seek recommendations.
   • Managing & Incentivizing: Foster a positive work culture and link compensation to performance.
2. Planning & Budgeting
   • Capital Planning: Manage cash flow and fund allocations.
   • Rental Rates: Adjust rents competitively.
   • Repairs/Renovations: Prioritize projects and manage budgets.
   • Inspections/Vendors: Coordinate property services and protocols.
   • Documents & Filings: Ensure compliance and accurate reporting.
3. Financial Management
   • Review & Reconciliation: Ensure accuracy in financial records.
   • Taxes: Manage timely tax payments.
   • Daily Operations: Track cash flow and handle transactions.
4. Metrics & Performance
   • Occupancy Metrics: Track physical and economic vacancy rates.
   • Financial Metrics: Monitor NOI, debt service coverage, and cash on cash return.
   • Operational Metrics: Assess resident satisfaction, operating costs, staff performance, and property condition.

1. Leasing Activity
   • 3 Things to Focus on: Monitoring the rent roll/expirations, leads/appointments/applications, and turning units
   • Networking: Leverage relationships for additional resources and support.
2. Managing the Property Manager
   • Planning: At the start of each year you should be discussing the operating budget, capital expenditures, planned renovations, rent rates, tenant satisfaction, and safety issues.
3. Investor Relations
   • Communication: Whether it is good or bad news, you should always be constantly communicating with your investors.
   • Distributions: Sending investors returns back to them is one of the most important tasks to accomplish.
4. Marketing
   • Channels: Social media, paid search, organic search, direct mail, creating signage, and TV/radio.
5. Market Monitoring
   • It is very important to keep an eye on the entire market as a whole. There are 6 metrics you want to watch: Rental rates, occupancy rates, new construction, cap rates, interest rates, and rental incentives.
6. Measuring Performance
   • The metrics to pay attention to: Physical occupancy, economic vacancy, historical vacancy average, vacancy relative to market comps, monthly rental income, NOI, annual debt service, loss to lease, debt service coverage ratio, cash on cash return, budget vs. actual, quick ratio, current ratio, maintenance reserves vs. capital needs, residence satisfaction, operating costs, staff performance, property condition, # of maintenance requests/response time, # of leasing prospects & conversions, lease expirations, & move ins/move outs. Yes this can seem like a lot of things to track, but with the right property management team in place, it can make the process a lot smoother and easier.

This overview provides a streamlined guide to multifamily asset management, covering key responsibilities, planning, financial oversight, and critical performance metrics.