You have just purchased a short sale or lender owned fourplex.  It was a good deal despite the work needed and it's vacant, all vacant: what next? 

You pretty much just purchased a business and your goals for it may be multiple but it's likely that you got it to build financial wealth or security: any vacancy is a loss, a loss of income and since we have a limited time to gather wealth it's worth putting in the extra effort to the business producing quality income.

All the steps below can be used for any property, even one you're taking over from a bad manager or one you have mismanaged and of course take any tips you find helpful to increase your profit.  They are all tested. 

First step is to  get familiar with the Arizona Landlord and Tenant Act, once you know it then move on.  This is your legal base for your behaviors and the tenants behaviors as well as consequences and actions. 

The steps below are in general but not strict order.

1. Create a plan. Even if you can afford to pay the mortgage as is, even with it all vacant you're losing cash flow.  Assuming rents at $625.00 and expenses of 35%, your losing $1,625 per month in potential income or less if you live in one. 

So it's important to get the property leased, the business running, as soon as possible but with care. 

There are certain steps to take to ensure you lease the property and that your tenants will be better.  The extra effort to attract better customers will make management much easier and the entire process more pleasant and profitable.

2. Clean exterior.  If you start by sticking a for rent sign outside, a prospective tenant drives by and sees and unkept building and yard, they will keep driving.  Primarily start with the exterior or do it in conjunction with at least one unit on the interior.

3. Clean one unit and finish it.  Have at least one unit ready for potential customers to see.  Don't show it unless it's ready. 9 out of 10 times you show a unit that's not ready you're just wasting your time.  Most people cannot see past the mess or even past the broom, mops, cleaning materials you're using to prep it.

You can do lots to an apartment.  Some use a standard color for all apartment.  This is easy and cost effective.  Others use custom colors.  This example is a house but it was purchased for the purpose of renting.  The customized colors helped the property lease in 2 weeks instead of the 2.2 months that was average for that market.  There is no reason not do do this on a smaller scale in an apartment.

Make sure everything is clean and working and visually pleasing.  Cleanliness is the most important. 

4. Start preparing a marketing plan.  You can start preparing a marketing plan earlier but photos sell and you can't really take good photos of an unprepared property.  This is your plan to get the units leased: the advertising campaign to get eyeballs and calls that result in viewings.

a. Do a rental survey; This is an overview of the competition, their condition what are the rents, deposits and other terms.  You need to know this.  You should already have an idea of the rents from the purchase process.  Just expand on it.  The market fluctuates and it may be different from when you did your due diligence in the buying process and now.

6. Stage the units.  This is an extra step but it works.  It does not require full furnished staging just the elements to help lead the eye and create a pleasing atmosphere.  Part of the staging is the paint job.

7. Keep an eye on the market.  Even if your building is now full you need to keep tabs on the pulse as a changing market will affect you in turnover or lost income. 

9. Manage well.  This is a business.   How will you collect rent, who will handle the repairs, put a team together so you're ready when the time comes.  It's not a pleasant adventure to have a pipe burst and have to call an emergency plumber: get to know a competent reliable handyman.  Who will handle evictions, questions about taxes and other matter? 

Who changes the A/C filter. This is important because these machines get heavy use in the summer and a dirty filter can lessen the life of an A/C: the last thing you want is a call at 2am that an a/c is broken.

Think of anything that must be done and who is going to do it.

10. Keep it clean. This is one of the top things missed.  Cleanliness sells better then almost anything and cleanliness will help keep tenants at your building.

11. Extra revenue generators

• Laundry facilities as revenue generators.  There are several ways to go about this: leased equipment, owned coin operated equipment or normal equipment with a month use charge.  Residents want a laundry and some will use it a lot and generate lot of extra revenue.  If you have 4 units then it's probably worth buying your own.

• Some tenants want customization: there are hundreds of things to do but how about ceiling fans for additional rent. 

By all means this is not an all including list: each property is different as are the requirements of the business owner.  This is just a basic guide and some suggestions. 

If you have any question we may be able to answer them and we'll be glad to share our experience with you and of course we can help you with the purchase.  Look below for additional resources.