Accepting the Right Tenant When Renting Multi Family Property

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As rental vacancy rates continue to drop. Housing prices froth, it’s time for landlords to get a game plan for selecting the best renters for their portfolio…

Housing on a Tight Rope

Debates are raging about whether US housing is swelling into another bubble. Historic data suggests this is highly unlikely for a number of years. The truth is that much of the country still isn’t back on par to where we were before the dip. Right now foreclosures are still being processed, home prices are heading up, mortgages are tougher to get than they used to be, and rents are heading up. It’s a landlords market. If single family home sales and price growth did slow, it would be even more of a landlord’s market.

This market is allowing rents to be raised dramatically, and is proving to be incredibly profitable for owners of multifamily apartment buildings properties.

However, it is worth noting that homeownership is at incredible lows. Nationally this rate has been marching back towards the 50% mark. Still with new and shadow single family inventory coming online, buyers desperate for properties, and the economy badly needing more transactions expect, expect mortgage lending to be loosened to facilitate more action.

For now rental vacancies have been dropped back to levels not seen in 2 decades. But there could be changes in the works. So while it is a landlord’s market now, it is important for real estate investors to know when it is time to hit the gas, and pump the brakes when it comes to leasing and raising prices.

Sky High Rents

Rents have risen to amazing highs thanks to millions of captive renters, and new leasing strategies. Profit margins have also risen due to more efficient property management. But even though there may be bidding wars over some rental units today rental property owners need to keep an eye on the big picture. Let’s face it – the truth is that in many places it is already twice as cheap to buy a home as it is to rent. It doesn’t take a genius to figure out that as renters get bombarded by offers of mortgage credit that some will start making the leap. So find some balance in between squeezing tenants out and maximizing income. On this subject it is also worth considering the sustainability of Airbnb short term rentals, even where it is legal.

Looking Beyond Rates

There is more for rental property owners to consider than just the top line rental rate and upfront deposit when selecting a tenant too.

Thorough screening is important. That means credit and background checks, rental history, income, and debt to income ratios. But it is also critical to be able to look at the big data and hone in on what really makes a tenant the best pick. That isn’t always just the one with the biggest deposit or willing to pay the most rent, or even best credit score.

Again; you need to look at net operating income. Who will actually deliver the most of it? This also has to factor in who will take best care of the unit, be the least problem, and will be the most loyal. After all, long term tenants are still the most profitable.

So taking all the data who is most likely to deliver the best NOI over the next few years?


This can be a confusing time for landlords. It is one of the best times in history to own rental property, and to add more of it to an investment portfolio. Rents are up, and right now landlords have their pick of renters. It may not stay that way forever. So who you put in your properties now could largely dictate your returns for the next few years. The savviest investors will put this in the hands of experienced local property management professionals that have the data and know how to decode it for the best returns.

Stock Market Volatility Drives Need for Direct Investment in Real Estate

investment in real estate property worcester ma

The stock market rollercoaster of August 2015 has been a big wakeup call for individuals to seek more reliable investments. For many that means direct investment in real estate.

Over just two days of trading in August stocks lost over $2 trillion in value. Some individuals reportedly lost billions. Even gold and oil free fell. Experts warn that this was just a taste of what is likely to come. We’re all told to diversify broadly and look at the very long picture, but that doesn’t work for everyone’s timeline, if virtually all stocks are sinking, and if you pretty much get totally wiped out.

In contrast real estate can offer incredible security. For those seeking growth now the time is ripe to get into real estate too. Even when real estate markets fluctuate, which every type of asset class does, the income can keep flowing. For most this is the most important part. Whether you are intelligently letting passive income pay for your spending and living expenses while young, compounding investment returns by reinvesting yields, or are in retirement, cash flow is king.

The only thing that has held some back in the past is that although they appreciate the safety and return potential of real estate, they haven’t wanted to have to roll up their sleeves and do DIY work or deal with tenants as hands-on landlords. That’s fine, you don’t have to. There are vehicles which can help streamline and automate real estate investing for busy individuals. Just make sure to avoid those with stock like qualities such as publicly traded REITs. Turnkey real estate investments are one option, but so is getting together in small private partnerships or solo investing, and getting a good property management company to handle all of the day to day.

There are many types of real estate to invest in. And you can still diversify between the bastions of safety but low growth like Boston, and faster growing markets on the outskirts like Worcester County. Retail and mixed use properties can be great choices, but multifamily apartment buildings, and portfolios of single family rentals can be less reliant on the performance of the stock market. Everyone needs housing all the time, and rentals continue to grow in demand, and returns.

So how will you decrease your exposure to wild stock market swings, and ensure the income and wealth you need and desire?

7 Tips for Maximizing MA Multifamily Investment Property Performance

Maximize Multi-Family

How can multifamily investors better maximize the performance of their properties and portfolios?

Multifamily apartment buildings continue to trend among sophisticated investors. All of the fundamentals in this sector are strong going forward, and apartment buildings provide the perfect income investment for both capitalizing on a new real estate boom, and finding protection in case residential sales falter on poor job and wage growth.

The popularity of multifamily has resulted in increased competition, especially in tight markets like the Northeast and Greater Boston area. Still, savvy investors can not only buck compressing cap rates, but are setting a new bar for returns and NOI with superior strategy and tactics.

Put these seven tips to work for your portfolio and enjoy better results…

1. Tech Savvy Property Management

While technology can sometimes make things more complex and distracting, today’s tech savvy MA property managers are delivering better results for their clients than ever before.

2. Better Multifamily Acquisitions

Leading investment firms are increasingly starting the process of demanding better returns earlier. Through better technology for accomplishing thorough due diligence, even on out of state properties, and employing local property managers earlier investors are negotiating better deals, with fewer negative surprises.

3. Better Tenant Selection

So much depends on tenant selection, yet so many rental property investors get it so wrong. Big data is providing more analytics and measurements than ever before. This is allowing the most experienced property managers to place new residents with incredible precision based upon both experience and intelligent data. This goes way beyond credit scores or income statements.

4.  Get Proactive on Online Reputation Management

The most successful apartment building landlords and real estate investment companies don’t wait until there are complaints or competitors unleash a web based attack. They are proactive and build up a barrier that deters these efforts and refuses to allow them to be easy targets and victims in the first place.

5. Customer Satisfaction as a Top Priority

Do to the impact of social media and online reviews customer satisfaction needs to be among the top priorities, if not the first. Note; this applies to both residences and all applicants.

6. Better Leverage

Financing makes all the difference in spreads, cash flow and net returns. Leverage should be used. However, there can be massive differences in the NOI of different investors depending on the financing they use. Terms, interest rates and equity versus debt financing can all make a difference.

7. Taxes

If MA multifamily investors take just one tip to apply from this report, it should be this one. Reducing taxes alone can make a monumental difference in real net returns. Consider self-directed IRAs, 1031 exchanges, and setting up captive insurance companies.

How Early Should I Contact A Property Manager For A New Acquisition?

Property Manager

How soon should real estate investors contact a property manager when buying new property in Massachusetts?

Securing a property manager is often one of the last things that real estate investors get around to. If you are on your tenth rental property in close proximity in Mass. you might already have this down to a science. Yet, many who are still starting out, or who are buying their first investment properties in the northeast, or who may be expanding from expensive Boston, to more appetizing deals in Worcester County, MA this can be a critical factor. So do you wait until you’ve bought a property and an issue arises? Or do you get a professional local property management company in place long before you close and take control of the property?

Get the Real Scoop on the Property

Speaking to a local property management expert even before you ink a deal might be a smart move. Sellers will often notoriously oversell the appeal of the property. Sometimes they gloss over repairs, over exaggerate potential value and appreciation, and even misrepresent rents and renter performance. Talking to an independent local pros can help get a truer picture of value, potential income, occupancy rates, and maybe even unveil some property specific challenges or benefits. You might be kicking yourself pretty hard later if you don’t get this input upfront.

Seamless Transition & Optimizing Performance

Having a property management company on the job even before you take over a new rental home, apartment building, or commercial income property can make a huge difference. They can get in, accurately assess the situation, alert teams to upcoming vacancies and start lining up tenants, get crews ready for maintenance, and make sure the transition is smooth for existing tenants. If there is a lapse in management maintenance issues can grow out of control, and then costs money. Then there is the legal side. If heating and power isn’t performing, people get hurt, and there is no buffer, huge legal costs can mount fast. No one wants that.

Picking the Best Property Manager

If MA real estate investors wait until there is an issue to recruit a manager there is little time to make a good choice. A bad manager can make a delicate situation a lot worse. It’s smarter to take a little time to interview and screen different property management options so that you can choose the best in advance.

The Vital Importance of Great Condo Property Management

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Just how important is property management when it comes to condos? What are some of the ways a good management company can make a big difference?

The need for great property management is often overlooked by real estate investors, and even condo and homeowners associations themselves. So just how bad can it get? How can a good condo management firm help?

The Devastating Expense of Poor Condo Management

There are obviously two parts to managing condos. There is the property management of the community on behalf of the association. Then there is property management for individual unit owners who acquire condos as an investment, or who do not live in them full time. Both types of management can have a massive impact on individual unit performance, and the solvency of the entire community.

It all really trickles down to values.

Poorly managed condos bring down both the value of individual units, and the entire property.

This is seriously bad news for all owners. And it can happen a lot faster than you think. Poor unit management can degrade unit value and income potential. In a condo building neglected maintenance, and bad tenants and owners can absolutely roll over and afflict neighboring units too.

Then there is the association and community property. Poorly maintained property and records can quickly limit which lenders will make loans in the development, the appeal of buying in the complex, and then the values.

When the housing market dove in the early 2000s many associations literally went broke, or at least pulled back so far on services and maintenance that units couldn’t be bought and sold, even if people would take the risk on buying them. The result is already that even though we are now in great times, many are still gripped with fear of buying condos and other properties in associations.

Nine Ways a Good Property Management Company Can Help

  1. Property maintenance and repairs
  2. Delivering discounts on vendor services
  3. Weight in getting vendors to perform better
  4. Enforcement of condo association rules
  5. Minimizing the impact of rogue board members
  6. Dealing with tenants, and tenant-landlord compliance
  7. Optimizing budgets
  8. Professional bookkeeping and record keeping to optimize values
  9. Facilitating the exit of bad apples, while encouraging good owners and tenants to come in


Management makes all the difference when it comes to condos. It’s the difference between bankruptcy and worse, versus very profitable and enjoyable investments. Unfortunately, in spite of the best intentions some board members and unit owners don’t have the broad and deep industry expertise to optimize management in all aspects. That’s where a great property management company can make all the difference.

New Twist On Trends Puts Retail Back In Investor Spotlight


A dynamic twist in trends, reportedly has retailers looking to invest in their real estate again. So as the spotlight is turned back on brick and mortar shopping where are the opportunities for commercial real estate investors, and what strategies are critical to remember during renovations?

A booming Massachusetts rental market has been both swelling the pockets of multifamily apartment building owners in the Northeast, and discouraging some commercial real estate investors from jumping in. Almost everything has been moving in favor of multifamily property owners recently. According to the Boston Globe vacancy rates have dipped to around 4%, while rents have skyrocketed by over 20% in some areas. Even mortgage interest rates have been sliding down again. This is providing incredible cash flow levels for landlords. However, asking prices of income investment properties are certainly rising too, which can be a concern for the adamant bargain hunter looking for a steal.

For those looking for a new real estate sector to tackle which promises significant growth ahead, it might be worth taking another look at what Massachusetts retail property has to offer, including local shopping plazas and mixed-use buildings.

Until recently many were concerned that rapidly developing technology could negatively impact brick and mortar retail. However, that now does not appear to be the case, with the lines literally blurring between virtual and reality, and several signals that suggest the retail sector has come full circle, and back to the neighborhood, and local high street.

Since last year there have been rumblings in the retail industry as some major technology platforms and companies began investing as much as 100% of new funding in brick and mortar real estate and offline sales mediums.

2014 Internet Week in NYC held last month revealed several more up and coming retail brands, including what would be considered tech startups launched by young entrepreneurs which are that are not just downplaying online shopping, but are actually morphing themselves into brick and mortar retail stores.

Both big and small businesses alike have also realized that real estate is far more important to their long term success and profitability than it has been before.

However, many existing retail properties require some serious rehab, especially in order to attract the best tenants and reach their full performance potential. Whether it is gutting an anchor tenant space, or simply upgrading fascia, signage and curb appeal, the amount of strategy put into project planning and timelines can make a huge difference.

Especially when there are existing tenants, keeping public perception and passing traffic in mind is critical to maximizing performance. What’s going in the space? How great is it going to be? Why should we look for a place to live closer to this shopping plaza, or try to negotiate a lease there now? These are all questions that should be dealt with and answered.

Exterior repairs and retail property repositioning can be an incredible opportunity, with plenty of PR ops. Or it can be a letdown. The same goes for office buildings and multifamily too. Talk to an experienced property management firm and leverage their expertise to maximize your investment property potential.

Multifamily Property Investments: Big Dangers & Bigger Returns


Multifamily property investing continues to be a hot trend. However, while an incredibly profitable real estate sector, with a bright outlook, realizing the potential returns and rewards multifamily has to offer frequently comes down to management and execution.

Many investors, including the best funded, too often underestimate the importance of property management and some of the potential risks which lurk for those attempting a lack luster DIY approach to maintenance.

So how can multifamily real estate investors reduce risk and increase profit, and what are the best practices which can make all the difference?

Multifamily Property Buzz

Multifamily housing continues to be hot. Urbanization seems to be all the rage today. Whether this is really what consumers want, or density is being sold to Millennials and Boomers by municipal government and developers seeking to maximize tax revenues and profits could be debated. However, the fact that multifamily will continue to be the cornerstone of many portfolios and an in demand product for many years isn’t in question.

Local authorities across the country are increasingly bending rules and allowing re-zoning for multifamily and mixed use properties. Funding for these projects has become plentiful. Rising rents and single family home prices and interest rates, the need for affordable housing, and generations of captive renters are sure to keep up property performance.

Via Bloomberg News, Billionaire Sam Zell even recently proclaimed he expects homeownership in America to drop another 10% to a low of just over 50%. Even if the market turns dramatically in favor of homeownership. Multifamily properties can be repurposed and transitioned with condo conversions (and vice-versa).

Multifamily property investment has many advantages. Savvy real estate investors love it for achieving a lower ‘cost per door’ and consolidated property management, among other reasons. One of the best benefits of this commercial property sector is also the high ROI available on making improvements, as well as being able to value-add during any stage of the property cycle.

The Unforeseen Dangers of Daily Multifamily Property Management

Popular industry media outlet, Inman News recently ran a series on the dangers of property management. According to an April 2014 report covering data from the Bureau of Labor Statistics “real estate workplace deaths (are) again on the rise”.

Most have heard of the recent spate of Craigslist killers and assaults at real estate open houses. However, the data shows some trends which some might find quite disturbing.

Real estate workplace deaths actually rose 19% year over year to the most recent information published by the BLS. Of course there were the usually transportation incidents and slips, falls and trips. Fires and explosions and exposure to substances and dangerous environments also made the list of fatality causing factors. More startling may be the number one cause of deaths being assaults and violent acts (both by humans and animals). According to the hard data landlords and property managers are the most at risk, ahead of brokers and real estate agents.

Best Practices for Multifamily Property Management in 2014

Between the above personal dangers, liabilities and potential health care cost increases of setting up a personal in-house team, and the fact even the largest private equity and hedge funds have appeared to back down from their buying spree due to management and repair challenges the following should be considered best practices for today’s investors, landlords and property owners…

  1. Use a third party professional property management company
  2. Do repairs right the first time and tackle them early
  3. Ensure regular inspections
  4. Carefully calculate the personal and investment liability of DIY and direct employees

Real estate Investment Businesses Now Rock Best Success Rates


According to new data real estate investment businesses are now among the most successful. Between this and new real estate statistics is shaping up to deliver a great windfall in wealth for property investment firms, with great sustainability for the long term.

As technology startups may be cooling, new research compiled by Statistics Brain shows that new real estate businesses are among the most likely to succeed and last. More specifically apartment building operators are ranked as having the 2nd best rate of survival and success after 5 years. So it’s a great time for a real estate startup or to expand real estate investing. The big question is where?

A new MBA reports shows that while commercial mortgage performance has been improving Fannie Mae’ commercial and multifamily property loans saw defaults double in the first three months of 2015. At the same time data compilers DistressedPro and RealtyTrac reveal a sharp rise in new foreclosures and delinquent residential mortgage loans. Some of these may be new defaults, many are probably the last of the legacy of the foreclosure crisis of the early 2000s. This means many potentially discounted properties coming to market, as well as many more individuals and families being poured into the rental market.

On the other end of the market reports a tremendous surge in home search activity. In fact, the listing portal says 35% to 50% more buyers are frequenting its site this year. used these figures along with statistics on those areas which are seeing homes sell the fastest to create a new list of the Hottest US Real Estate Markets in 2015. The Boston, MA region comes in, in the top 6. However, those looking for more value, less competition, and more inventory to choose from may look further west in Mass. to grab the deals they really want on multifamily properties.

In conclusion; the numbers certainly support this as being one of the best time to increase real estate investments in Massachusetts. It’s a great time to incorporate and scale real estate investment activities, especially in the multifamily apartment building sector. The deals are there, and so is the demand for units. Substantial spreads are available for those that act quickly to capitalize on the difference between distressed property sales and the new rising market, and who focus on serving others as they need to liquidate assets, and seeking rental housing.

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Real Estate Trends for Investors to Watch

What were the real estate and finance trends for real estate investors?

Overall capital flow and transaction volume was set new highs, but more significantly will be new, and recurring twists in the market which changes where the value and best returns are. This is likely be especially be seen in northeast markets like Massachusetts.

US Markets Switching Up Positions

While San Francisco, Miami, Austin, and even New York and Boston have bounced back, and are pushing highs, 2015 is likely to see not only the smart money, but many lower level investors and lenders embracing secondary markets in earnest. In Massachusetts this means markets like Worcester could see performance outpacing central Boston.

Foreign Real Estate Investors

While around 80% of global investors said they planned to expand their positions in US real estate, a new DLA Piper State of the Market Report suggests foreign investors will be the most active in the US real estate market in the year ahead. Expect major changes overseas to drive even larger and wealthier investors to America.

Commercial Mortgages

According to CCIM coverage the US is facing a 2 year “tsunami of loans” coming due. On one hand this brings concern to borrowers that took out commercial mortgage loans when underwriting was incredibly lax and LTVs were high. Of $350B in loans coming due, many won’t qualify to refinance, especially unless they can come up with sizable chunks of principal to pay down. On the reverse side of the coin this will create incredible opportunity for value investors to step in with solutions, or acquire Worcester, MA multifamily and retail properties at deep discounts.

Retail Takes the Lead

The PwC Real Estate Investor Survey in the 3rd quarter of 2014 should expectations are that retail will lead the commercial real estate world in 2015 and into 2016.

Condo Hotels Make a Comeback

In November 2014 the CCIM Institute reported that it believes the JOBS act has made condo hotels easier to sell, and together with improving fundamentals is becoming more profitable.

Rising Rents, But…

Rents on retail and multifamily properties are only expected to rise for the foreseeable future. However, some already hot markets could run into affordability issues, and eventually the need for rent controls of some form or another. This makes the case for investing in cheaper secondary and tertiary markets like Worcester even stronger.

Easier Borrowing, Maybe

Relaxed lending is reportedly on its way, facilitated by the government. Many argue borrowing is already significantly easier, though just how much easier it will become in the coming years, will have to be seen as the issue is so political.

How Professionals Can Efficiently Find A Safe Haven In Real Estate

Real estate

Real estate may seem the safest and most rewarding investment option on the landscape today, but how do busy professionals take advantage of the property market efficiently?

The fears about stocks, tech, bonds, gold, and oil all seem to be kicking in. Yet, over half of American professionals admit they are poorly prepared for retirement. Even among those that are confident, many might be being a little too optimistic. At the same time while real estate beckons many individuals simply don’t want to toss their careers to become full time house flippers or landlords. So what’s the solution?

This is a pressing issue facing boomers and generation X. And it is as bad for educated professionals with good salaries as everyone else. Millennials may have time to take a few detours, attempt launching their own startups, and then panic and hustle to catch up on savings and investment later, maybe. But what about your doctors, professors, lawyers, teachers, and others?

Real estate beckons due to standing out as one of the only investment options that offers literal concrete safety. And the icing on the cake is high yields, cash flow, and asset appreciation. With today’s combination of low asset prices, rock bottom interest rates for leverage, and a sunny outlook for growth it’s hands down the best option on the table. In fact, it’s virtually a necessity for everyone’s portfolio. But there are challenges.

Many people just aren’t gifted with the skills for the manual labor it takes to fix up properties. Others don’t want to be dealing with late night tenant phone calls, or simply can’t fit it into their schedules. What busy professional do you know wants to be trudging off to unclog toilets at 2am, forgoing vacations to bang on doors for rents, or get into verbal lashing matches with renters?

Fortunately real estate investment has changed by leaps and bounds in the last couple of years. Digital signatures, online data, easy to navigate property search platforms, and online banking make it almost a breeze to get from A-Z. You can now find, bid on, negotiate, and fund real estate deals without ever leaving your office or oceanfront balcony. Many can do it without ever picking up a phone anymore. That just leaves property management.

The best property in the world, with the greatest potential is only going to perform as good as the management. So one of the first steps in the process needs to be selecting a reputable and effective local property management company. They ought to be on the ground day one, and preferably even familiar with the property and deal before that. Providing they hit the ground running right away busy professionals can effectively create their own turnkey real estate deals. This maximizes value, spreads, and net overall returns.

Then it’s just a matter of getting on with life, with the confidence your future and current finances are performing well…