Why Multifamily Needs Community ManagementOct 20, 2021
There are plenty of multifamily investment opportunities out there that have a community/complex filled with more than just one owner. If the community as a whole doesn't have unity in its approach to maintenance and standards of living, then a bad tenant next door could end up killing your rental property value.
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What goes on inside of these properties, isn't only what, the only thing that goes on inside of the development and what happens outside, how people interact with their neighbors and the property itself impact whether they want to renew leases, how much they want to pay, and how happy they are as a tenant.
There has to be one sheriff in town. So two ways to deal with that. If you're fractionalized ownership like us, there has to be an HOA. If it's one complex, right, then this becomes a little bit different. So we wanted to explore that a little bit more. What are some of the things that pop into your mind?
Let's say we have 200 doors over here. 200 doors over here. One of them is one full property. It's one tax ID. The other is 50 properties. It's a bunch of, bunch of fourplexes or something. What are some of the key differences in how that those communities would be managed?
Chase Leavitt: Well, let's talk about the 50 different units...
Steve Olson: That's a little more intensive.
Chase Leavitt: Yes, let's talk about that. Because that's what figure is, right. Pretty much. So, as far as the HOA goes, if there's an HOA involved, which we'd like to set up.
HOA is going to manage basically everything that's on the exterior and it can be set up differently in different communities. If we're not talking about FIG, you can go in different directions with it, but typically you're going to have a clubhouse involved.
It's being managed and taken care of. You're going to have landscaping, snow removal, and then we can talk about different utilities that are involved as well, such as water, sewer garbage. Um, just anything on the exterior of the building
Sherida Zenger: and the maintenance of the exterior of the building, which also the HOA is going to have insurance, which is going to cover the roof.
That's a big thing that I know a lot of people ask about, but it's nice because if w HOA is taking care of something, you know that every door in the project's going to be taken care of this. Rather than if chase Steve and I all own in one little project and we own thirds of it. Steve may take care of his lawn.
I may take care of the exterior and Chase may take care of, you know, some of the amenities, but if his looks really crappy and mine looks really good and Steve's looked really good, Chases is going to bring down our value or vice versa.
But if you have one person, one HOA in there managing the whole thing, making it all look good, it's going to help your investment over the long-term...
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