I recently delivered a webinar for Metrofamily NW titled: “The Top 10 Ways To Maximize Your Apartment NOI in 2021”, and in this changing market, the “tricks of the trade” are definitely changing from recent years as well. Here is a brief summary of the Top 5 (the rest will be posted next). These tips are surveyed from “Super Successful” investors, owners and property managers.
While each individual tip may not be earth shattering or provide thousands of dollars in additional Net Operating Income (NOI), they definitely can add up to thousands of dollars annually. For sellers, that NOI increase can also generate a lot of value. For example, at a 5.5% cap rate, a $1,000 increase in NOI results in an approximate $18,181 in price! (The formula is NOI/Cap rate, or $1,000/5%) A little goes a long way!
Here is a one sentence summary for each tip:
#1 BE THE ASSET MANAGER: The number one mistake owners/landlords make with apartment ownership is thinking their property manager is their asset manager.
#2: HAVE THE RIGHT PROPERTY MANAGER: In part due to recent legislation, aving the right manager is more important that ever!
#3: DECREASE TIME SPENT VACANT: This is difficult to do, but vacancies that take an extra month to turn could double your economic annual vacancy rate.
#4: PET POLICY: Since having emotional support animals has gained popularity, collecting pet rents is trending downward and may not be as viable to increase the NOI as it was five years ago.
#5: ANNUAL INSURANCE AUDITS: Insurance rates change annually from carrier to carrier, and getting three bids annually ensures you are getting the proper coverage and lowest cost.
Next post: The rest of the top ten tips, including the recent governmental legislation.
