Properly implemented, tracked and monitored property management processes and procedures are integral to the establishment of successful multifamily residential real estate. These types of property management best practices include effective standard operating procedures, installing well-run maintenance programs, obtaining package discounts on insurance and other items, monitoring unit inspections, and developing resident retention programs. These all serve to increase NOI (net operating income) while preserving, protecting, and enhancing the property's physical assets and resident welfare.
Beyond establishment of effective protocol, extensive involvement with governmental agencies like HUD (Housing and Urban Development), the USDA agency for Rural Development, and the California Housing Finance Agency (CHFA) is crucial to developing a successful place of business that is also a happy place for people to live. HUD alone has eight major operating branches, several of which interact with multifamily housing developments. These include Fair Housing and Equal Opportunity, Healthy Homes and Lead Hazard Control, and the Housing Office (responsible for the Federal Housing Administration). Each branch has separate concerns regarding the proper operating standards of multifamily property management.
Local housing authorities and community development agencies that serve various types of residences are also integral to successful multifamily property management. In addition to extensive involvement and frequent contact with such agencies and organizations, regulatory compliance is clearly critical. This includes regulations from HUD, Low Income Housing Tax Credit (LIHTC), and other related agencies, and necessitates an experienced compliance coordinator to monitor and assist with these issues. Development of residences qualifying for the Low Income Housing Tax Credit can bolster a community and yield substantial tax deductions, but only if the guidelines of section 42 of the Internal Revenue Code are met. Failure to comply with HUD, LIHTC, or a number of other regulatory bodies can result in fines, reducing or eliminating profits and jeopardizing the ongoing successful operation of the property.
Historically, investment in real estate has proven a generally sound strategy for increasing capital when held for adequate periods of time. Implementing multifamily residential properly management best practices is a key component in enhancing capital growth, as the decisions pertaining to property positioning, maintenance practices, and long-term strategy will greatly impact the value of the asset at time of disposition. This includes everything from structural soundness to grounds keeping to reputation. Only through a comprehensive approach can stable, long-term growth be achieved. Focusing on properly implemented, tracking and monitoring property management processes and procedures, including the creation of a best practices protocol will help ensure optimum value for multifamily property holdings.