As prospective purchasers of new multifamily properties, choosing the right property and setting up the right business plan for the apartment complex is risk ridden decision. If you make the right decision, you stand to make millions and if not, you can lose your entire investment or be burdened with an unproductive asset.
Pay Attention To Your Apartment Community
Correctly analyzing local demographics; crime and drug statistics and factors; schools, colleges, and education; and community features including entertainment, shopping, and restaurants are major considerations (at a later time, we will examine competition, local infrastructure, market, submarket, and property specific factors in this series on property analysis). Recognizing that identified factors can create opportunities positioning the exclusive condo apartment property mitigating investment risk and magnifying return opportunities.
During the analysis phase the prospective multi family investor is preparing for several requirements:
1) Bank information or outside investor information relevant to the opportunity or risks.
2) Marketing information that will help prepare collateral, websites, and determining leasing strategy.
3) Operational information that may impact improvement budgets, marketing budgets, customer service plans, and staffing and operations budgets and plans.
4) Repositioning plans that will determine the property goal over the course of ownership.
Here the investor is determining:
– Age profile: Older renters are more stable but less able to support a steadily increasing rent plan. A property may offer structural features that will attract older or younger apartment residents.
Good information is available on the U.S. Census website
– Sex profile: This can impact lighting needs, amenities, etc. Also, this may have an effect on the marketing message a community focuses upon.
Good information is available on the U.S. Census website.
– Ethnicity and race profile: Hispanics often are seeking higher density. A property with ample parking and the right floor plans may be able to take advantage of this. Additionally, Hispanics and minorities are expected to be 72% of household growth for the next decade. This statistic can be an indicator of growth or payment expectations because of potential demand factors.
Good information is available on the U.S. Census website as a starting point. Following up on this, the investor should visit nearby neighborhoods and apartment communities to augment understanding of this factor. Walking around the neighborhood around an apartment luxury condo kuala lumpur complex 5 or 6 blocks out on several different days and several different times of day including evenings, late evening, and late nights and including the weekend are good precautions to take.
– Income profile: A property that is significantly above the income profile of the surrounding community may struggle achieving rents appropriate for the property. On the other hand, a rundown property in a strong neighborhood is often and excellent multifamily opportunity.
Census zip code information is a useful starting point combined with the neighborhood walks around an apartment complex mentioned earlier.
– Employment profile: The employment profile can offer important referral marketing opportunity ideas. Additionally, the profile may identify likely renting limits for a property because of the salary profile of specific industries.
The census and local Chamber of Commerce are recommended source for this information.
The census website is – .
– Education profile: A high student concentration or more professional group can affect lease structure, technology access decisions, and other items impacting margins or improving or damaging the occupancy opportunity.
This should be augmented by studying the demographic profile of housing paying close attention to density, preferred amenities, and other behavioral housing choices. This can significantly impact the investment opportunity as some of these items can significantly increase or hinder potential returns. A market that has an appetite for larger floor plans can significantly reduce potential opportunity for example.
Visiting the local schools is a good addition to this process. Additionally, local school websites often offer important additional information.
Crime and Drug Statistics and factors
In general, investors should avoid high crime issues unless they have specific crime abatement experience. However, if a multifamily investor is prepared to aggressively tackle these issues when a property otherwise offers excellent condo damansara location factors, this profile can generate outsized returns.
The investor should check local newspapers, call the local police department, and should visit local businesses to learn more about this subject.
Community Entertainment, Shopping and Restaurants
Identifying local points of interest, service establishments, shopping, restaurants is an important part of information that will influence prospective new tenants to choose the community.
During the study and analysis of these items, the investor should be capturing pictures of the strongest points, lists of the best schools, shopping and restaurants, and other items. This will be a significant source of information to develop a good apartment project business plan, to create the initial website, and to plan operations and customer service plans.
Good luck and good hunting!