When you invest in real estate passively, especially through syndications, you’re trusting a sponsor to manage the asset effectively and deliver strong returns. But how do you actually know if a property is performing well?

The answer lies in Key Performance Indicators (KPIs) quantifiable metrics that help investors measure the financial health and operational performance of a multifamily asset.

Whether you’re an experienced investor or just beginning to explore syndications, understanding these KPIs can help you evaluate opportunities, ask the right questions, and track progress after you invest.

Here are 8 essential KPIs every multifamily investor should know (and what they tell you).

1. Revenue Growth

This is the most straightforward indicator of a property’s top-line health:
Is income increasing over time?

Revenue growth comes from:

• Rent increases

• Added amenities (like reserved parking or storage)

• Utility reimbursements

• Pet fees or premium unit upgrades

💡 Why it matters: Healthy revenue growth means the operator is proactively optimizing income, not just relying on market forces. Investors should expect detailed business plans on how rent increases and value-add improvements will drive top-line revenue.

2. Expense Ratio

Expense Ratio = Operating Expenses / Gross Income

This KPI helps you evaluate how much of the income is being eaten up by operating costs. A lower ratio typically indicates more efficient property management.

💡 Watch out for:

• High ratios can signal operational inefficiencies, bloated vendor contracts, or lack of economies of scale.

• A dramatic shift in expense ratio over time could indicate poor oversight or underperformance.

A typical expense ratio for stabilized multifamily properties is 35%–50%, though it varies by market and asset class.

3. Delinquency Rate

This measures how much rent is owed but not collected. It’s especially important in markets with economic instability or during times of job loss.

💡 Why it matters: Even a property with full occupancy can suffer if tenants aren’t paying rent. High delinquency reduces cash flow, impacts investor distributions, and signals ineffective collections processes or tenant screening.

Ask your sponsor how they track and manage delinquency, and what collection procedures are in place.

4. Occupancy Rate

Occupancy is a core indicator of asset health.
Is the building full? Are units leased quickly?

💡 What to know:

• Stabilized occupancy is typically considered 90% or higher.

• A well-operated property in a solid market should consistently maintain high occupancy, unless undergoing major renovations.

Also, pay attention to economic occupancy vs. physical occupancy. A building might be physically full, but if tenants aren’t paying (see delinquency), the income doesn’t match.

5. Turnover Time

How long does it take to get a unit rent-ready and re-leased after a tenant moves out?

💡 Why it matters: Every vacant day is lost revenue.
Quick turns reflect:

• Efficient maintenance & make-ready crews

• Strong leasing teams

• Effective marketing systems

Turnover is where strong asset managers shine reducing downtime keeps revenue flowing.

6. Leasing Conversion Rate

This KPI tracks how many inquiries or showings convert into signed leases.

A low conversion rate may indicate problems with:

• Pricing (too high for the market)

• Unit condition or presentation

• Leasing staff or responsiveness

• Competition in the area

💡 Why it matters: High marketing spend means nothing if it’s not converting. Effective leasing is the heartbeat of a healthy multifamily asset.

7. Renewal Rate

Renewal Rate = # of renewing tenants / total eligible leases

It’s cheaper to keep a tenant than to find a new one. Every move-out comes with costs: cleaning, repairs, vacancy loss, leasing fees.

💡 A high renewal rate signals:

• Tenant satisfaction

• Good management

• Fair rental increases

• Fewer turnover costs = higher net income

A healthy renewal rate is typically 50%–70%, but the goal is always to keep it climbing.

8. Profit and Loss (P&L) Statement

This is your quarterly report card. The P&L breaks down:

• Total revenue

• Total expenses

• Net operating income (NOI)

• Cash flow after debt service

• Budget vs. actual variances

💡 Why it matters: This is where all the KPIs come together. The P&L is what investors should review every quarter to assess:

• Are returns tracking as projected?

• Are expenses being managed?

• Are value-add initiatives impacting NOI?

If something looks off, it’s okay to ask questions. Transparency from the sponsor is key.

Final Thoughts: Know What to Watch

When you invest passively, you may not be in the day-to-day operations but you should never be in the dark.

These 8 KPIs are the critical metrics your sponsor should be tracking and reporting on. They’ll tell you whether the property is healthy, where risks might lie, and if the business plan is truly working.

📩 Want to see how we evaluate and track KPIs in our deals?
Let’s talk about how we manage risk, optimize performance, and deliver strong returns to investors.

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