After acquiring a multifamily property, your work as an investor isn’t over yet. You might be celebrating a successful deal over bottles of champagne, but the challenges are getting harder from that point on.
Why? Because multifamily investing is a long and arduous process that requires you to keep constant tabs on your assets and make sure that they are generating income as expected.
One way you can monitor the health and performance of an apartment complex is to measure its vacancy rate.

Why vacancies matter

Happy Tenants Equal Better Cashflow - Why vacancies matter

The net operating income of your multifamily asset will depend on the amount of rent you or your property managers collect on a monthly basis. If you have assets with 100 units each, you’d get a handsome return if 70 of these are occupied by happy tenants. 
When your income from rent falls, on the other hand, it only means that the number of vacancies you have has increased. You have fewer tenants who pay their monthly dues. When the occupancy rate falls under 50% and you have a wide range of utilities to pay off, then you know you have a critical problem to your cash flow.

The Reasons Why Tenants Leave

Happy Tenants Equal Better Cashflow - The Reasons Why Tenants Leave

Tenants have a variety of reasons for leaving your apartment complex. It’s either they are relocating or they’re planning to move into a single-family home.
But there are also other cases that could convince tenants to pack their bags and leave:

  1. High rent
  2. Problems with neighbors
  3. Poorly maintained facilities
  4. Treatment by the landlord
  5. Rent disputes

However, there will be cases in which tenants site unfair terms and poor communication with the landlord. Often, disputes can lead to lawsuits, especially if you’re in a state where the law tends to skew in favor of tenants.
We certainly don’t want to challenge tenants in court, more so suffer from dismal occupancy numbers. So what’s the secret to keep tenants happy and secure your profit margins at the same time?

5 Tips to Effective Tenant Relations

Happy Tenants Equal Better Cashflow - 5 Tips to Effective Tenant Relations


Perspective makes all the difference. And in order to get a good sense of your tenants’ experiences, you will need to open your doors for feedback. Reach out to them and see if they can suggest anything that could help improve their stay and attract new tenants to the property.


As much as possible, you would want your property manager to screen renters and conduct background checks. Doing your homework can certainly save you time and money.


Prepare a checklist of the routines you need to do and keep track of your maintenance activities. This should help you identify important issues and fix them earlier.


Aside from fixing common and complex issues around the property, you also need to improve its appearance. For this, you can replace dilapidated floorboards or give the interior a fresh new coat of paint.


To keep your tenants happy, you can offer them rewards. For instance, you can give out free gift cards in return for timely rent payments.

There you have it. Your cash flow will depend on your vacancy rate. By focusing on your tenants and their needs, you can help reduce vacancies considerably.
Hope these will help you make the most out of your cash flow.

As informed investors we should understand the risks associated with real estate investing and that  there is no  guarantee. Please do your due diligence.

For more tips on how you can generate better income, visit Estateserve today!
That’s all for this week!

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