By Graham Hill
Of the countless ways to store and build wealth, one of the strongest asset classes chosen by investors is real estate.
Real estate is conspicuous and the value is often easy to recognize. Almost all of us have first-hand knowledge of appreciation and rising selling prices in our own homes, and in the residences owned by friends or family. For investors looking for mostly-predictable, mostly-stable assets, real estate is an obvious choice. With some positive experience with home ownership, and some basic curiosity about real estate investment strategies, many investors begin to explore the potential for both appreciation and cashflow via ownership of rental properties.
Imagine you have some capital for investment, maybe you already own an investment property (or two), you want to increase your sophistication, and you have some related questions. Which neighborhoods in your community offer the best real estate investments, and why? Is the commercial business district still a good place to buy? Are there locations in the local market that offer the new investor more potential for increasing values? Are there areas in the community where the most knowledgeable investors are divesting? If you need help, which particular brokers, property managers, or contractors are reliable and interested in working with new investors at your stage of growth?
For real estate investors looking to deepen their knowledge of the local market, peer connections can be a valuable resource.
“Position yourself where landlords hang out. If you have a local real estate club or landlord association, I recommend attending their meetings and striking up conversations with as many folks as you can.”
— Brandon Turner, author and real estate investor
Across the United States, and in major real estate markets around the world, there are relatively unknown groups where owners of income-producing real estate exchange ideas, make introductions, and even meet up in person to share experiences and knowledge.
These groups are known as landlord associations or apartment associations.
What Landlord Associations Are
Landlord associations and apartment owner associations are membership organizations with a common goal: to provide support to owners of rental property.
While the members are primarily investors and owners of apartment buildings (and other multifamily real estate), in practice, the membership base also includes local real estate brokers, property managers, insurance providers, tax specialists, construction company operators, and other interested parties in the community.
These various members come together (in person or online) to network, to exchange tips and local information, and sometimes even to join together to influence policy to benefit their collective goals.
Origins of Landlord Associations
Informal groups of property owners sharing information have always existed. Emerging from the casual conversations of individual investors, structured groups that serve rental property owners may be organized by a central administrator, by a passionate leader in the investor community, or by a broker (or other service provider) motivated to bring groups of property owners together.
Over time, a landlord networking group may become a formal body with membership requirements and dues. Landlord associations may cater to local needs, but generally offer a range of benefits including lists of local resources, tools for landlords, online and in-person seminars, introductions, and members-only social engagements.
Three Functions of Landlord Associations
Apartment and landlord associations come in several forms, with each variety emphasizing some combination of three primary functions: networking, education, and advocacy. Networking involves gatherings, forums, seminars, and social opportunities for members. Education covers lists of resources for rental property operation, shared case studies, and how-to information, often tailored to that region or area. Advocacy refers to awareness of governmental policy changes and collective action, where the group coordinates resources to address local policymakers and elections.
Big-name associations in the US include the National Apartment Association (NAA) and the American Apartment Owners Association (AAOA). These national or industry-wide associations commonly have a stronger focus on advocacy, acting as collective groups of rental property owners with shared interests. Larger apartment owners’ groups have staff that work to develop resources to support their members.
“One of the biggest ways successful rental property owners use AAOA is through our tenant screening tools, which go far beyond a standard credit check.”
— Alexandra Alvarado, American Apartment Owners Association
Smaller, regional apartment owners’ groups, like the Apartment Professionals Trade Society of New York (APTS), may offer more personal interactions and function more on the basis of direct relationships, where social and personal connections carry more weight. Local owners’ groups may also provide better opportunities to find mentors or specific properties for sale.
Off-Market Deals and Member Networks
While these landlord associations are not explicit marketplaces for investment property, the relationships in these communities can provide a basis for buying and selling within members-only networks, including off-market real estate transactions that are not advertised to the general public.
While off-market transactions are relatively rare in residential property sales, in multifamily and commercial real estate, as much as 50% (or more) of the transactions in a local community are never listed online, but are only traded within the personal networks of real estate investors and brokers.
Landlord associations do not guarantee access to private deals, but they can place investors in the same rooms as other owners and local professionals. In-network sales of real estate are often faster and easier for owners than a public sale, and can be a preferred way to transact for experienced buyers and sellers.
The availability of these off-market properties is typically shared within the community first.
Landlord Associations Around the World
Because rental property owner associations provide a similar benefit to owners regardless of location, these associations exist almost everywhere rental property is found. There are landlord associations in the UK, most European countries, Australia, Canada, and other countries around the world.
Local expectations for the services that landlord associations provide may be slightly different in each market. Associations in the US are commonly called “apartment associations,” whereas in Europe and Australia, the more common term is “landlord association.” For landlord associations in Japan, there is a stronger focus on the networking aspect. Singapore is a notable example of a location where there are almost no landlord associations, as the local government discourages concentrated ownership of rental properties by individual investors.
Joining a Local Landlord Association
While many landlord associations require membership, joining is accessible to anyone who knows the associations exist. For the price of an annual membership and some time online or at a local event, an investor can ask questions, find pre-vetted local agents or vendors, and learn about properties that are not publicly listed.
Signing up for a membership is straightforward. From there, individual effort will often determine how much value is created for the investor. While not every investor will find a mentor or new business partner, apartment associations offer extensive context for education and one-on-one communication.
