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Additional Key Factors for Evaluating a Multifamily Opportunity

Dustin Edwards • Nov 06, 2020

Beyond CAP Rate and GRM, What to Look for in a Multifamily Property

Multifamily Property
When you are looking for a multi-family property in Long Beach, Lakewood or nearby cities there are intangible factors to consider outside of the economics of the property. When new investors start in multi-family investing they may focus on key metrics such as GRM (Gross Rent Multiplier) and CAP Rate (Capitalization Rate) but those numbers alone won’t tell the full opportunity of the investment.  

Getting beyond the metrics is essential whether you are buying a residential multifamily (i.e. 2-4 units) or getting into commercial multifamily units (5+). As we have had the opportunity to not only manage multifamily properties but help our clients purchase them as well we invite you to consider additional key factors to help you in finding the right property for your investment goals.

What Parking is Available?

Even in today’s transformative society with the availability of Uber/Lift and additional mass transit going in throughout LA County parking is still a valuable element of a multifamily property. As you are evaluating your options look to see the following in regards to parking:
  • How many spots are available?
  • Is the parking covered?
  • Are there garage spots in addition to covered parking?
  • Would prospective tenants in this area expect to have 1 or even 2 parking spots per unit?
  • What is the availability of street parking?
  • Are there nearby parking lots for rent if parking is not available?
Parking is one of those intangible items that can keep tenants staying for years and even pay a premium. Of course if there isn’t easy parking available that doesn’t mean the investment isn’t worthwhile as there are apartments in Alamitos Beach that have high occupancy rates and rely on street parking. The key element is to have this as part of your evaluation process.

What is the Laundry Situation?

For those that have primarily lived in or invested in single family homes you might forget to have laundry as part of your evaluation process but we invite you to add it to your list. Having accessible laundry units is one of those items that can save tenants time and have them enjoying your property for the long-haul.

  • In-Unit Laundry - We have seen a growing trend of units include in-unit laundry as units are remodeled. Also with new additions of ADUs you could be required to have in-unit laundry. Having in-unit laundry (whether stackable or side by side) is a great added value to your rental property.
  • On-Site Laundry - If you don’t have in-unit laundry the next best opportunity is to have on-site laundry. Having on-site laundry adds convenience for your tenants and can provide a modest income stream for you as well.  
What are the size of the units?

Rents in Southern California (including Long Beach and Lakewood) have certainly been increasing steadily over the years. What of the largest factors in the gross monthly rent that you can yield is based on the size of the unit (i.e. lease income per square ft). While neighborhood (think those close to the Ocean) certainly plays a factor, in general, the larger the units the higher the rent.  

With that being said, consider the following aspects about the size of the units as you look to invest in multifamily properties:

  • Are there smaller units available as part of the mix? (i.e. studios or 1 bedroom units) - Studios and 1 bedroom units can help you tap into a younger demographic of renter, early professionals who have a strong income, want to live alone, but can’t quite afford the more expensive rent that is commensurate with a larger unit.
  • Who is the typical tenant in the area? - Are the typical tenants in this area in a certain age demographic? Are there a higher concentration of families vs. individuals? Understanding the makeup of the neighborhood can help you analyze what the optimal configuration would be for your purchase.
  • How are the larger units configured? - Consider that if the multifamily has a 2 bedroom/2 bathroom units as part of the mix, what is the layout? Are the bedrooms and bathrooms separated so that each has its own bathroom? Well designed layouts (or ability to improve the layouts or even the condition of the units) gives you the options for a wider array of possible tenants.
When it comes to deciding on your next multifamily investment (even if it’s your first) there are many items to consider. To help you understand your options you to call us today at (562) 888-0247 and let us know you’d just like to discuss more about multifamily investing. 




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By Dustin Edwards 01 May, 2024
Everyone wants to feel safe in their homes. As an investment property owner, it's up to you to decide whether or not to include security measures in your property. Many of the costs associated with the security measures can be included in the rent, meaning not only can you keep your property safe, but you can earn more income in the long run. However, you would still want your tenants to have renters insurance to protect their assets. Today, we’ll discuss the top five security measures you can add to your property and why they're beneficial to you and your tenant. Security Cameras Cameras are probably one of the first security measures people think about when asked about security. Cameras provide more benefits than just surveillance. They provide an extra level of security for the safety of the tenants and their belongings. Additionally, security cameras can be useful when repairs are required. Cameras can aid in supervising repairs and maintenance to ensure you’re receiving the agreed-upon work. During vacancies when the property is empty, security cameras can help keep the property safe from potential intruders. Doorbell cameras are incredibly popular now. They provide the aforementioned safety of a camera that can be accessed remotely, as well as the ability to communicate with visitors. Although one must be careful never to say you're not home, just say you're unavailable to strangers. Security Lights Security lights with motion detectors are another effective tool when adding security measures to your property. These lights brightly if a potential intruder attempts to get near your home. They can provide enough illumination to see the intruder or, at the very least, scare them off. Nowadays, you can find a combination of security cameras and motion-activated security lights, such as the floodlight cam wired plus from Ring . Additionally, because these lights only turn on when motion is detected, they’re more cost-effective than traditional lights with a switch. Illuminate the Property Light generally deters intruders as it's more difficult to hide. Adding lighting to the landscaping can increase the security of the property while creating a relaxing atmosphere. Lights can also be used in other areas of the property to accent features such as trees, benches, or artwork. This can help your property stand out while giving your tenants an additional feeling of safety. Keyless Entry Keyless entry is seen as both a convenience feature and a security feature. They usually use an electronic passcode, biometric data, or grant access through a smartphone app. Physical keys can be lost, stolen, or duplicated. You reduce the risk of unauthorized entry by eliminating the need for a physical key to enter the property. Many keyless entry systems include several features, such as remote locking and monitoring. Although keyless entry is a great new technology for keeping your tenants and properties safe, they’re best used with other security systems. Security Company Nothing beats having an extra pair of eyes on your property for security. This is where security companies like ADT and SimpliSafe come in. While companies may deal with security in varying ways, they aim to protect your investment. While safety is the primary role of a security company, remember that many tenants may be willing to pay more for a premium amenity like a home security company. Keeping your property and tenants safe is incredibly important to the longevity of an investment property. If you’re looking to improve the security of your Long Beach rental property or need help managing your beach city rental property, we invite you to call us today at (562) 888-0247 or fill out our Owner Application online .
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