Dynamic Star’s co-founder and development director, Brad Zackson, believes investing in multifamily properties can be lucrative and exciting. Unfortunately, some of these investments result from poor decisions. The investment process can sometimes fail for reasons beyond one’s control, but investors must always do extensive research and evaluate properties objectively. Brad Zackson says Choosing the right property also involves knowing how it will be managed.
Rental income from multifamily properties is a great way to ensure a steady cash flow stream. A multifamily property has more than one tenant, while a single-family home has just one tenant, says Brad Zackson. If one unit is vacant, you will still have cash flow from the other units. However, you must do your due diligence before investing in multifamily properties. Investors should focus on the property’s location and learn as much as possible about the city.
Every city is different, and areas within that city vary significantly. By doing so, the investor will understand the property’s true value. In addition, the vacancy rates and rental prices will be more accurate. It is also important to keep the research focused on preventing surprises. A systematic approach and the development of criteria for evaluating properties will assist investors in making smarter investments, according to Zackson.
By applying these criteria to all potential properties, the investor will be in a better position to make an objective decision. As a new investor, you risk falling in love with a property and overlooking its faults. A building’s operation and ability to serve the daily needs of its tenants are two of the most important factors for long-term value creation.
Zackson says property management helps retain tenants by ensuring that a property delivers maximum performance. Rent is usually set and collected by the property manager, maintenance requests are handled, vacant units are filled, and the property’s budget might be set. Cash flow will improve if a rental property is well managed due to turnover and vacancies.