Like many other industries, multifamily real estate certainly felt the economic turbulence of 2022. Inflation, volatility in the labor and capital markets, and rising interest rates combined to cool an environment of record growth in occupancy and rental rates. Though its near-term outlook remains unsettled, the multifamily industry nevertheless is on track for a healthy 2023, according to Freddie Mac. I agree with this assessment.
Multifamily real estate is a long-term business that handles change well. Its workforce is a key reason. People always will need places to live, which multifamily dwellings provide. But those dedicated to multifamily real estate provide more than spaces for stuff. They support households, families, and homes.
This is a high-touch business in search of people seeking more than a commission. In our business, relationships don’t end when the sold sign emerges. That’s when they begin.
Ultimately, multifamily real estate offers career opportunities to those who embrace the concept of home. How should agents and managers get started in the business? Here’s what I look for when welcoming new employees to our multifamily team.
Differences between single-family and multifamily real estate
Real estate agents all possess some similar skills. They’re self-starters with excellent communication and research skills, a knack for engaging with people, and the ability to sell a property. Plus, they seal deals. As everyone in real estate knows, coffee’s for closers.
But some might be surprised that single-family agents usually don’t transfer to the multifamily business. Single-family agents tend to be more comfortable as commission-based independent contractors enthusiastic about charting their own destinies.
Those in multifamily real estate work as part of a team that includes leasing agents, property managers and assistants, and maintenance supervisors. Together, they form a seamless experience from leasing to living to, hopefully, renewal. And that’s an essential difference between businesses.
Renewals are the cornerstone of multifamily real estate. Properties with high renewal rates don’t lose rental income between leases. They don’t incur the extra costs of preparing a unit for turnover. And they don’t incur further costs to procure new renters. Our best employees don’t sell a property once. They continue to sell it year-round by making it a place people want to live and call home.
Crucial skills for multifamily team members
As noted earlier, multifamily real estate encompasses a variety of roles. These positions share a common thread: Interacting with the public.
Multifamily real estate is a front-facing business. Consider the property manager. The role requires skills in finance, project management, and human resources. Property managers should be familiar with state and federal fair housing laws and the Americans With Disabilities Act. And they should have a knack for sales.
However, the right candidate can learn these skills. When vetting new team members, I first want to know how they interact with people. I’ve learned over the years that, more than prior experience or industry training, personality and people skills are the top attributes of a successful new employee.
People who work in multifamily real estate are talkative and approachable. They build a rapport with leads that continues through their time as renters. They connect with people, and that’s their No. 1 predictor for success.
What we look for when hiring new multifamily agents
A good experience with a team member leads to renewals. A negative experience leads renters to look for another place to live. In multifamily real estate, we’re looking for managers and agents who make people feel at home. Here’s how prospective employees can demonstrate that.
When interviewing candidates, I might ask them to lead me through a property, either in person or virtually. They must highlight more than the unit’s square footage and crown molding. I want them to explain why I should live here instead of somewhere else. I want to see their excitement for the property and hear it in their voice. I want them to take cues from my level of interest — am I eager, disinterested, or ambivalent? — and react accordingly.
I want to know about their history dealing with the public. People in front-facing jobs (restaurant hosts, rental car associates, fitness center workers) often transition well to multifamily real estate. The best know how to talk with people instead of to them. They make people feel comfortable and want to stay, which is the essence of this business.
In multifamily real estate, a strong property supports 70 percent of its leasing activity through renewals. A friendly maintenance supervisor who responds promptly and efficiently can drive renewals. A property manager who takes time to ensure package delivery drives renewals. And a property manager who engages renters by organizing holiday events or food-truck nights drives renewals. Some people thrive being the local face of the real estate company they represent. That’s who we want to hire.
As Freddie Mac noted in its 2023 multifamily outlook, the industry still faces some concerns, but “the tailwinds remain that will help prop up the multifamily market in the long run.” I’m bullish on the business, so here’s my advice for those who’d like to join us.
- Learn as much as you can about multifamily real estate.
- Tour some properties, talk to people in the business about their career paths, and determine yours.
- Identify a property you love, examine the company that owns it, and find out whether it offers a path for growth and success.
Then dive in. The business is filled with possibilities and needs quality people. Multifamily real estate isn’t for introverts. But the right personality, one eager to connect with others, can make it a rewarding career.
Michael H. Zaransky is the founder and managing principal of MZ Capital Partners in Northbrook, Illinois. Founded in 2005, the company deals in multifamily properties.