Whether you own a small apartment building with a few units or a large high-rise with both residential and business space, multifamily cash flow follows the same basic principles to achieve long-term profitability. But managing that cash flow can be a bit more challenging, especially in today’s tumultuous real estate environment.
As one of the Midwest’s top multifamily real estate firms, Farbman Group knows what it takes to maximize the cash flow and overall long-term profitability of any sized property.
If you think you could be making more money from your multifamily property, chances are you can. By reviewing the building’s operations, you may find areas where you can reduce costs without jeopardizing the tenant experience—all while maintaining or even improving quality of those services. This can range anywhere from utility rebates and energy-efficient upgrades to preventative maintenance programs and a vendor selection process.
One of the expenses comes in the form of property management. If your current multifamily management company isn’t doing all they can to help generate cash flow and improve the bottom line, it may be time to consider putting the job up for bid at the end of the term. Property management is not only about recording deposits, paying bills and maintaining the property. It is also about being a valued business partner.
Add Additional Revenue Streams
Multifamily cash flow can be heightened if you add additional revenue streams to your operations. From pet fees and garage rentals to furnished units, housekeeping, short-term lease options and more, smart, value-add investments can be made in a variety of areas that open the possibilities for more dollars to be spent on your property.
Enhance the Appearance
Sometimes, all a multifamily property needs to boost cash flow is an aesthetic facelift. Increased public perception and rent premiums can be earned when a building is visually modern, well maintained or rich with desirable amenities. Sometimes, even simple upgrades like new, in-unit hardware and appliances, renovated landscaping, and improved signage can up the value of your building.
Refinance Your Property
Reducing the interest rate on your multifamily property by even a small percentage can potentially help save you hundreds of thousands of dollars in the long-run—even if it means paying closing costs on a new mortgage. Calculate the break-even point by determining the cost of refinance, divided by monthly savings, which is how many months it will take to recoup the expense. With interest rates remaining at record lows for a little while longer, now is the time to take advantage of this cash flow-increasing practice.
Managing multifamily cash flow requires a combination of strategy, foresight and organization. A little preparation can go a long way. Sometimes it even helps to bring in an experienced partner who can help you reach new levels of growth and consistency.
If you’re interested in receiving a complimentary, no-obligation multifamily real estate consultation, contact Farbman Group and get in touch with an expert today.