We don’t “Maintain” your building we “Manage” it!
There is a big difference between just “maintaining” your asset and really having a property management company “Manage” your asset. That’s right, “Manage your Asset”
Cameron Jacques is President of Kinnery’s Brokerage House and has been helping investors “financially stage” their investments for many years. Cameron is also a Multifamily real estate investor here in Long Beach and sits on the Board of Directors for the Southern Cities Apt Association.
Cameron believes Multifamily investing is an incredible opportunity to build wealth, In Cameron’s words ‘If you’re not seeing a great return on your Investment, then there is a serious breakdown in management’. This is where we come in!
We here at Kinnery’s understand that landlords will do one of three things…
- Live off their asset.
- Refinance their asset.
- Sell their asset.
all of which requires every asset to be “Managed” to its fullest potential!
When living off your asset:
If you live off the income derived from your asset, every extra penny you receive increases your quality of life. Interestingly most property management companies and owners who self-manage, run their rents anywhere from 10 to 20% below the market. Why you may ask? Well, it’s pretty simple, when rents are low, tenants generally don’t complain, or more importantly, move. Therefore, less work for the manager. As an owner it’s your prerogative to manage the way you see fit. However, Management companies should work a little harder for the 5 to 10% fee they charge. For the self-managing owners out there, ask yourself this question; if you paid a management company 5% of your buildings annual income, and they were able to increase your annual income by 10 to 20%, and take all the stress from management away from you, would they be worth it?
Refinancing your asset:
Every investor looking to build his or her portfolio will be looking to refinance the asset at some point. At Kinnery’s we’ve had many conversations with landlords about building their wealth. Most will say ‘I bought my first building and spent the next 30 years refinancing and buying’. The net income your building generates heavily impacts your appraised value. Our President (Cameron Jacques) owned a very successful appraisal management company for ten years. His knowledge of the appraisal process is second to none. Cameron knows how to “financially stage” your asset to achieve the highest appraised value. Knowing what the appraiser is looking for is key when looking to achieve your financial objective.
Selling your asset: Your assets value is based on its income.
When we speak about “financially staging” your asset for disposition, our focus and goal is being able to justify your wish list number to a perspective buyer, and appraiser. Remembering, ‘your assets value is based on its income’. I know I speak for all multifamily investors, when I say, ‘we didn’t get into multifamily investing to give everyone else a ‘good deal’ on disposition day!’.
We follow all Fair Housing and Equal Opportunity laws when selecting our tenants. Here is something you may not hear every day, we enjoy the application process. Having a good rapport with our tenants always helps with a pleasant working week.
You don’t always need to spend money to make money in multifamily. With the right management, even the slightest increase in rents, a quick review of your utilities, and vendor expenses can make a significant difference to your bottom line. At Kinnery’s we focus on the finer details to management and look forward assisting you in building greater wealth.
Timeline on flipping a unit:
At Kinnery’s we’re always fascinated by this question, what’s your “turn time?”. Many management companies tend to pride themselves on a quick “turn time”. However, a better question should be, ‘when a tenant gives notice, at what point do you start marketing the unit?’ Rushing to fill a unit is a mistake. More focus should be placed on achieving market rent, finding a tenant who loves the unit and scheduling vendors to be at the property the moment the previous tenant vacates. “Time is money” as we all know. Most of the hard work on finding a new tenant should be done prior to the current tenant’s departure.
When it comes to vacancy rates, Long Beach has fluctuated between 2 to 3.5% over the past few years. Interestingly, anything 5% and below is classifies as 100% occupancy, as we all need time to “turn the unit”. At Kinnery’s we pride ourselves, like everyone else, on having a 2 to 3% vacancy. We all know that this comes down to good management and a healthy rental market.
At Kinnery’s we do many things extremely well. Our customer service, is arguably what we strive to do best. It all stems from the basics, we pick up the phone when it rings, if we have stepped away from the phone we will immediately return the call. We understand that our clients are our priority and the reason why we come to work every day.