Multi-Family Guide 101: What You Need to Know in Oakland

Multi-Family Guide 101: What You Need to Know in Oakland

Investing in multi-family properties is an excellent way to diversify your rental property portfolio and increase both your cash flow and your long term ROI. When you’re identifying the right opportunity, you need to look at the investment differently than you would when buying a single-family property.

We have a few tips for investors and landlords in Oakland who are buying or already renting out multi-family properties.
 

Before You Buy: Analyze the Financials

Buying a multi-family property that already has tenants in place will save you the trouble of having to find and place qualified renters. But, you want to take a close look at who those tenants are and what they’re paying in rent. Make sure the rents are at the market level, and examine their lease agreements to ensure the terms won’t cause any financial hardships during the purchase or during the tenancy. If you’re buying an unoccupied multi-family property, make sure you have some good data on what you can expect in terms of rental values, and how long of a vacancy period you are likely to have.
 

Before you invest in a multi-family property, analyze the numbers and make sure the cash on return will match your investment goals. Depending on how you structure the sale and your financing, you’ll want to be sure you’re earning enough rental income compared to your expenses.
 

Budget More than Necessary for Maintenance

Property maintenance is going to be one of your largest expenses with a multi-family property, and it will help you to budget more than you’ll actually need, just in case there’s an expensive repair or several units have a problem at one time. You should set up adequate cash reserves that will help you cover larger maintenance expenses and also protect you against vacancies and pay for turnover costs. Try to save at least 10 percent of all rents collected every month in a maintenance reserve fund.
 

Prepare for More Tenant Management

With a single-family property you have a single household with requests, problems, questions, and needs. Investing in a multi-family property means responding to the needs of several tenants, and sometimes managing disputes between those tenants. Customer service becomes even more important, and you’ll find there’s more to do in terms of keeping your residents happy and turning them into long-term renters. Make sure you’re prepared for hands-on tenant relations.

Work with a Professional Management Company

There are a lot of great reasons to work with a professional Oakland property manager, and when you own and lease multi-family properties, it’s even more critical. Oakland tenants have a lot of rights; the landlord/tenant laws in California are pretty complex. You need an experienced professional who can protect your property and your interests, while keeping you compliant. Your property management team can also help with the placement and management of tenants, routine and emergency maintenance responses, and all the accounting and documentation. You’ll find that you can earn more and spend less on your Oakland investment property when you work with a property management company, especially when you own multi-family buildings.

We manage a number of multi-family homes in and around Oakland. If you’d like more information or you have questions, please contact us at Prime Property Group, Inc..

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