A landlord for a single-family home, condo, townhome, or apartment building will require a different set of skills for each asset category. The building will operate on a different level, and your tenants will also be expecting and require a different approach and level of service provided. In this blog, we wanted to specifically focus on apartment buildings, from basic definition to operations and property management as an owner and landlord of an apartment building.
What Classifies an Apartment Building?
An apartment building contains several separate residential spaces. There are three size distinctions for an apartment building. Your apartment building will fall into one of these three categories. Low-rise, medium/mid-rise, and high-rise, the type your building falls in is based on the number of floors and units in the building. Low-rise apartment buildings will be three or fewer stories. Medium or Mid-rise typically structures between five and nine stories with amenities like a pool, gym, common areas, and green spaces. Your high-rise apartment complexes are going to be located in busy metropolitan areas and consist of 10 or more stories. Apartment buildings are typically owned by a single entity, often a corporation, and then leased out to individual tenants.
According to the National Multifamily Housing Council, there are 21.4 million apartment units in the U.S., with 40% of apartments being two-bedroom units. Here in Orlando, Florida, as of January 2020, the average apartment size is 963 sqft, with an average rental rate of $1,429.
Apartment Management in Orlando and Operations
Depending on your apartment type will ultimately determine the best route for the management and operations of your property. If you are low-rise or medium-rise apartment owner, you should consider using a local professional apartment management company in Orlando that will help you operate the property efficiently and at a very reasonable cost. They’ll have the local knowledge of comparable apartment buildings in the area and understand the target tenant demographic to fill and retain quality tenants. Your high-rise buildings will likely be owned/managed by the national firms like Greystar, MAA (Mid-America Apartment Communities), Lincoln Property Company, etc. Many of the large corporations do not have the ability & flexibility that a local Orlando apartment property management company will. To have an effective operating building, you will likely want to have a full-time onsite manager for a building with 50 to 70 units. An offsite management company can handle anything below that if their technology and processes are up to date. Also, state & local laws will determine if you need to have an onsite Orlando property manager.
The National Apartment Association in 2018 survey of operating income & expenses shows in the graph below of Garden-style complexes which fall under low-rise apartment buildings category. Showcase your operating costs.
With management fees coming in at only 7% of your property expenses.
Orlando Mom and Pop Apartment Buildings
A lot of smaller apartment buildings in Central Florida are independently owned properties that are being self-managed. Whether you inherited your apartment building or purchased the apartment for an investment, you will likely need some assistance or direction to manage your asset to achieve peak performance effectively. However, a survey from Buildium in 2016 expresses costs continue to be the top reason self-managing rental property owners decide not to use a property manager in Orlando, with 50 percent saying they simply don’t want to pay for one. And at face-value is an understandable perspective, however, this mindset works against your investment and the overall performance of your property. Your property management provider has a fiduciary duty to you; they have your best interest in mind to ensure the property is continuing to produce a profit. You should consider them as an essential piece in your investment strategy. Using a professional Orlando Apartment Management Company will speed up your learning curve and limit/avoid mistakes you’ll face if you decide to go it alone. An apartment management provider in Orlando will save you so much more in the long run. Now the next decision comes down to using a local apartment property manager or a larger national apartment property management provider.
Local Apartment Property Manager Vs. Nation Apartment Management Provider
Every crossroads in life, when making a decision has a cause and effect. When deciding on whether to choose local or national is no different. Each has its pros and cons, and you, as the Orlando Apartment Owner, have to weigh the options. Here are a few to consider when deciding on using a local or national apartment property management provider.
However, the most important characteristic you need to consider when choosing your Orlando Apartment Manager is their trustworthiness. In a recent report out by Buildium, 75.2% of property owners and investors expressed the most important quality in a property management firm is their reliability and trustworthiness.
Final Thoughts To Consider For Your Apartment Management Needs
Whether your Orlando apartment building has 4, 16, 32, or even 200 units, it will never hurt to have a dedicated team in place to ensure your investment is operating at its full potential. Your team is only as good as your weakest link. Do your research and due diligence when choosing a professional property management company in Orlando. A quality property manager is a key piece to your success. If you ever have any questions regarding your apartment management needs. Please don’t hesitate to reach out to The Listing Real Estate Management, Central Florida’s highest-rated boutique professional apartment management provider.