Arizona Rental Housing Journal - June 2014 by Professional Publishing, Inc

Rental Housing Journal Arizona

June 2014 - Vol. 6 Issue 6 8. Shoptalk

2. LED Lighting will help you save money

9. Experts on… The Ultimate Set of Property Management Tools

4. ARLTA Provides Resident Remedies when ‘Casualty’ Damages Occur

12. How Financial Spring Cleaning Can Lead

5. 4 Ways to Make Your New Home More Eco-Friendly

to a Richer Long-Term Outlook 13. What Americans Want in Apartment Landscaping

6. Ernest F. Oriente, The Coach 7. Dear Maintenance Men:

15. 7 Fun Tenets of Business that You Can Apply to Life

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Tucson Multifamily Housing Market Update

he second largest metropolitan area in Arizona, is gaining attention for purchasing opportunities, in the multifamily housing market. There were approximately twenty one verified closed arms length transactions, between January 1st, 2014 and May 20th, 2014, of 8 unit plus properties. Six of these sales were to California buyers. Over 25% of the sales were either distressed property sales and/or suffered from deferred maintenance. One sale was sold via auction and one was a bankruptcy sale. The average size complex sale consisted of 60 units and all sales ranged from 5 unit to 272 unit properties. Actual cap rates of the sold properties ranged from 5.98% to 14%. and averaged 7.48%. Price per square foot of improvements ranged from a low of $20.44 to a high of $104.32 and averaged $51.99 per square foot. Closed sale price per unit ranged from $14,211 to $69,412 and averaged $36,724. Sold complexes were primarily in central Tucson. The highest price per unit sale of $69,412, was a property in the Catalina Foothills. None of the sales involved newly built student housing, near the University of Arizona. Continued on page 2 Professional Publishing Inc. PO Box 6244, Beaverton, OR 97007

The Dilemma of Increasing Rent in Single Family I get it!

strong case can be made that property managers and rental property owners should be raising rents in the Greater Phoenix area (not so much in Tucson), but they are hesitant to do so. In April’s RentCheck™ report from ARMLS® for the first time in eleven months, we finally saw an increase in single family median rent. Yes, in a strong rental market reflecting solid demand and low vacancy, it took

eleven months for rents to increase. The increase was $55. Why? As Executive Director of the Arizona Real Estate Investors Association – AZREIA, I talk to quite a few rental property owners each month and I facilitate a couple of large group discussions every month. One of the topics that turns into a debate, just about every time, is increasing rents in the single family space. The debate focuses

around the dilemma of trying to raise the rent when you are turning the property or renewing the lease. Owners of single family rentals have been “trained” to not push rent $25 - $50 a month if it could cause an additional month of vacancy. The math behind that reasoning (assuming a $1000 rent rate) is why lose $1000 in revenue for $300 to $600 in increased rents. If the vacancy increases to two additional months or longer

the math gets increasingly worse. I get it. Let’s play the math out a little further. In doing so, let’s look at both a one month and a two month vacancy scenario. A one month vacancy is $1000 in lost revenue and a two month vacancy adds up to $2000 in lost revenue. Assuming a $50 increase in rent where are you after one year? Continued on page 8

Insight Into a Successful Apartment Management Company What Really Makes it Work!

recently had the opportunity to visit with Dick James, the owner of Dick James & Assoc., a wellrespected apartment management company currently managing more than 6,000 units in three States. In life, there are individuals that you meet that you appreciate for their enthusiasm about their work, treating everyone in their company as “family” and taking a sincere inter-

Current Resident or

est in every employee. Dick’s web site (www.djaproperties.com) notes that “they care for every property like they own it”. He attributes his success to this mandate – plus some very basic philosophies. His answers to my questions provide insight on how a successful company works. Jim Kasten: How did you get into managing apartments?

Dick James: I was a very active apartment broker in the Sacramento area for many years, and then I started putting together a large number of partnerships that invested in and purchased apartments. I had worked with a number of management companies with mixed results, leading my wife and me to the decision that we thought we could do a better job Continued on page 4

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LED Lighting Will Help You Save Money and Give You Better Lighting at the Same Time

ne important place to find savings is in your electrical/ lighting Budget. Every year we waste over 57% of the energy we import or generate in the form of leaks and unused heat. Inefficient lighting, especially the incandescent kind, greatly contributes to this while providing poor lighting quality. Both incandescent and fluorescent bulbs, in a variety of applications, give off more energy in heat than they do in lumens, effectively draining power while trying to do their job. Commercial owners, especially those in the office and retail sectors, spend over 34% of their energy cost on simply powering their lights, and this does not account for the repair and replacement of the fixtures and ballasts. As energy costs continue to rise, even in the Pacific Northwest where we enjoy cheap energy, small increases in the cost per kWh can mean hundreds more on your energy bill. Switching to a more efficient and durable light source, like LED lighting, will reduce energy consumption, increase the lifetime of your lighting assets, and reduce your environmental impact so your property can run smoother, simpler and brighter. Longevity: Longevity is the first category to

explore when comparing lighting methods. In a test reported in the 2011 Energy Efficiency Annual Report by the New England Gas Company, the Phillips Ambient LED 12.5 watt A19 indoor bulb, a common LED light, was tested against the CFL GE Energy Smart 13 watt bulb. Although the two bulbs compared favorably in energy efficiency, the LED lasted 17,000 hours longer than the CFL. You would need three CLF bulbs to match the longevity of the 25,000 hour lifetime of the LED. When factoring in replacement cost, which can mean hiring a professional at $30-$60 an hour, the CLF become much more costly than advertised. LEDs range from 25,000 hrs. – 90,000 hours in lifetime, no other single lighting method comes close. Energy Savings:

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The primary reason for switching to LEDs is to save on your daily energy consumption and cost. According to the U.S. Commercial Buildings Energy Consumption and Intensity Trends report retail locations using over 40% of their energy consumption on lighting, business and building owners need to make a change. H o w e v e r many commercial owners have yet to make a switch because of the relamping cost, especially since many owners just switched from incandescent to florescent bulbs in the last five years. The reduction in consumption can reduce the utility bill while increasing the value of the building. Let’s take a large department store, which uses 300 250 watt halide high-bay fixtures. In one hour this store will use 75,000 watts on these lights. If these were replaced with 400 24 watt LED high bays, the store would use 10,000 watts in that hour. If these lights are on 14 hours a day, with a cost of $0.10/watt the store would be saving $32,000 on energy every year. LEDs are 80% efficient, which means they convert more energy into light, reducing waste and consumption. Control systems can also be put in place so the lights can be dimmed, brightened, or turned off based on specific preferences. In addition an asset boost is possible. In a 200,000-square foot office building that pays $2 per square foot in energy costs, a 10% reduction in energy consumption could be an additional $40,000 of NOI. At a cap rate of 8% this could mean an asset value boost of $500,000. The energy savings don’t stop at the lighting when LEDs are installed. Because less heat is generated, HVAC systems don’t have to compensate for the heat generated by light bulbs in your office and have more power available to deal with the 90 degree summer heat. Lighting is Better and Brighter Although the lighting debate focuses on the environment, cost, and energy efficiency it’s important to include quality of lighting. Quality of light is often determined by the color temperature, measured in kelvins, and the color rendering index (CRI), which indicates how accurately the light renders colors. These are important because color temperature

changes based on the application, i.e. retail lighting, kitchen lighting, classroom lighting etc, and CRI determines if the enlightened colors will appear correctly to the human eye. LED lights have an advantage in both of these areas because they are adjustable and can be manufactured for specific color temperature while also ensuring colors are well lit. With increased control over temperature and CRI owners can provide better lighting for each application they need. These applications can range from office and parking lot lighting to retail and restaurant lighting, yet each needs different intensity and temperature to create an atmosphere or to improve safety and visibility. Tax and Government Incentives: Most owners are still worried about initial implementation cost. However, there are a number of programs offering incentives and rebates for making important lighting upgrades. Lightingtaxdeductions.com and Energy Trust of Oregon’s Lighting Incentives Sheet, allows owners to supplement the cost of their upgrades either upfront or through tax deductions. In addition The Energy Policy Act of 2005 provided energy efficient commercial buildings a tax reduction program for lighting systems that exceeded lighting code standards (Energy Policy Act Tax Deduction Information). Each of these programs are very specific, depending on the type of building, the lighting applications, and the costs they will cover, but they are incredibly helpful is getting your project off the ground despite high costs. With the Energy Independence & Security Act of 2007 the U.S. began to implement stringent lighting standards aimed at efficiency. The bill called for certain inefficient lighting to be phased out by manufacturers and suppliers. As of Jan. 1st, 2014, 75 watt and 100 watt incandescent bulbs were cut from manufacturing, thus, forcing consumers to find more energy efficient options. Rebates still remain to make retrofitting easier but as energy efficient lights become standard these rebates will be phased out as well, so don’t miss your chance. Environmental Plus: Although saving energy is a plus for the environment, efficient light bulbs are not made out of thin air. Many light bulbs( including florescent bulbs) are produced with and contain harmful chemicals like mercury and lead. Sophisticated recycling techniques are needed to make sure these metals don’t enter our water ways, where they could be very harmful. LED bulbs on the other hand, contain no mercury and aren’t considered a hazardous product, Continued on page 5

Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

Increasing Rent ...continued from front page Month

$1000 Rent

1 2 3 4 5 6 7 8 9 10 11 12

$ 1,000 $ 2,000 $ 3,000 $ 4,000 $ 5,000 $ 6,000 $ 7,000 $ 8,000 $ 9,000 $ 10,000 $ 11,000 $ 12,000

In the one month scenario, you breakeven in month 21 and you are ahead by $150 at the end of year two. With no vacancy, you are ahead $1200. In a two month vacancy, you still have $900 in less rent received. In the two month scenario you do not reach breakeven until month 42! Naturally, all this assumes the same tenant is in place throughout the scenario or there are no additional months of vacancy other than the assumptions in the first year. What should you do? Go for the rent increase and risk the revenue downside or rent the property for at, or near, current rent to protect revenue and cash flow? It depends. First, what type of market are you in. Right now we have a strong single family rental market in Greater Phoenix, so the risk in trying to increase rents is less. Personally, I would try to increase the rents, but be nimble in the negotiations. In and around Tucson, recent meetings and conversations suggest the single family rental market is a little sluggish, so it would be a greater risk to try and increase rents. It also depends on how many units you have. If you just have one single family rental minimizing your vacancy is paramount, especially if your cash flow position is small due to debt service and other expenses. You may be a little more risk tolerant with more units to spread the risk

Market Update

$1050 Rent 2 Months Vacant Vacant Vacant $ 1,050 $ 2,100 $ 3,150 $ 4,200 $ 5,250 $ 6,300 $ 7,350 $ 8,400 $ 9,450 $ 10,500

$1050 Rent 1 Month Vacant Vacant $ 1,050 $ 2,100 $ 3,150 $ 4,200 $ 5,250 $ 6,300 $ 7,350 $ 8,400 $ 9,450 $ 10,500 $ 11,550

Month

$1050 Rent

13 14 15 16 17 18 19 20 21 22 23 24

$ 13,000 $ 14,000 $ 15,000 $ 16,000 $ 17,000 $ 18,000 $ 19,000 $ 20,000 $ 21,000 $ 22,000 $ 23,000 $ 24,000

$1050 Rent No Vacancy $ 1,050 $ 2,100 $ 3,150 $ 4,200 $ 5,250 $ 6,300 $ 7,350 $ 8,400 $ 9,450 $ 10,500 $ 11,550 $ 12,600

$1000 Rent 2 Months Vacant $ 11,550 $ 12,600 $ 13,650 $ 14,700 $ 15,750 $ 16,800 $ 17,850 $ 18,900 $ 19,950 $ 21,000 $ 22,050 $ 23,100

After the first year, you are $1500 less in revenue in the two months vacant scenario, $450 less in revenue in the one month assumption, and you are $600 ahead if you can raise the rent without any vacancy. Okay, so what happens in year two?

$1050 Rent 1 Month Vacant $ 12,600 $ 13,650 $ 14,700 $ 15,750 $ 16,800 $ 17,850 $ 18,900 $ 19,950 $ 21,000 $ 22,050 $ 23,100 $ 24,150

$1050 Rent No Vacancy $ 13,650 $ 14,700 $ 15,750 $ 16,800 $ 17,850 $ 18,900 $ 19,950 $ 21,000 $ 22,050 $ 23,100 $ 24,150 $ 25,200

over. Also, it is always good practice to complete a rent survey for your market area. Understanding what others are receiving, or asking, in rent is valuable information and can significantly help in reducing your marketing time. Smarter investing, Alan Langston Executive Director Arizona Real Estate Investors Association - AZREIA 480990-7092 www.AZREIA.org AZREIA serves its 1700+ members through chapters in Phoenix, Tucson and Prescott providing extensive market information, education, networking events and support.

...continued from front page

Of the twenty-one sales, seven were verified cash purchases and the three were purchased with seller financing. Bank of the West financed two of the purchases. The other purchases were either financed by institutional lenders or the source of financing was not verified.

Data was provided by sources deemed reliable, but not guaranteed. Jade Bossert is an Associate Broker with Tierra Antigua Realty in Tucson. She has sold real estate in Arizona since 1979.

Visit us online at www.rentalhousingjournal.com

Rental Housing Journal Arizona â&#x20AC;˘ June 2014

RENTAL HOUSING JOURNAL ARIZONA

ARLTA Provides Resident Remedies when ‘Casualty’ Damages Occur

anagement from time to time will have to address unforeseen problems that occur at apartment communities and rental units. These can range from a fire, to a roof leak, to flooding from a broken pipe. Commonly called “acts of God,” these incidents are normally not the landlord’s responsibility, unless he or she was negligent in not addressing the potential problem. For example, management knows of a leak in the roof and took no steps to correct it. The Arizona Residential Landlord and Tenant Act (ARLTA) addresses this topic: A.R.S. § 33-1366. Fire or casualty damage A. If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that the enjoyment of the dwelling unit is substantially impaired, the tenant may do either of the following: 1. Immediately vacate the premises and notify the landlord in writing within fourteen days thereafter his intention to termi-

nate the rental agreement, in which case the rental agreement terminates as the date of vacating. 2. If continued occupancy is lawful, vacate any part of the dwelling unit rendered unusable by the fire or casualty, in which case the tenant’s liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit. B. If the rental agreement is terminated, the landlord shall return all security recoverable under A.R.S. § 33-1321. Accounting for rent in the event of termination or apportionment is to occur as of the date of the tenant vacates all or part of the dwelling unit. Unfortunately, ARLTA does not state what a casualty is or what constitutes substantially impaired enjoyment of the apartment. One court case addressed this provision. (This case occurred in a state trial court, so it is not binding on similar future cases.)

In this case, the renters moved into a house that had Polybutylene piping. Prior to this tenancy, the house experienced a minor leak. Approximately one month after move in, the renters discovered yet another small leak. The landlord decided the best solution was to re-plumb the entire house. Due to a holiday and a weekend, it took six days to complete the replumbing. The renters did not have any water during this time. The landlord testified that he offered to pay for a hotel room for the renters until completion of the project. The residents, however, stated he made no such offer. The renters gave the landlord notice and moved out the day after completion of the re-plumbing. They claimed the living conditions were intolerable due to the lack of water. The landlord argued the residents breached the lease by moving out, and insisted they pay rent for the remainder of the rental agreement. The renters counter sued for return of their deposit plus double damages, rent paid during the month the leak occurred, and all moving and hous-

ing expenses for the two months after they vacated. The trial judge found that the lack of water for the six-day period was a casualty and substantially impaired the enjoyment of the rental premises. This allowed them to legally break the lease and move out. However, the judge only awarded the renters part of their security deposit, part of one month’s rent, and no court or attorney’s fees. It did not award the landlord any damages. This decision took into consideration the landlord’s timely response and decision to make all repairs necessary to make the premises fit and habitable, including the huge expense of re-plumbing the entire home. It also considered the resident’s situation. The leaks did not damage any of their property, and they had full use of the house during the repairs. They did not make any effort to go to a hotel on their own, and did not have renter’s insurance. Again, this is one judge’s decision, but it does shed some light on what may be a casuality.

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RENTAL HOUSING JOURNAL ARIZONA

4 Ways to Make Your New Home More Eco-Friendly

our new house might have a pretty big environmental footprint. Buildings, including homes, account for nearly 40 percent of all energy consumed in the U.S., according to the Environmental Protection Agency. Now that you own your home, you can plan remodeling and renovation projects to make your living space more environmentally conscious. Insulate Your Walls Insulate your home and use less energy to heat and cool it. Newer homes tend to come with insulation, but they might benefit from more. Older homes tend to have less insulation. The Department of Energy recommends a home inspection to learn the R-value of the insulation before you add more. R-value is the resistance to heat; the job of insulation is to keep heat on the correct side of the wall (out in summer, in during winter). First check with your local utility company to see if it offers free home inspections for heating efficiency. If not, they might have a list of recommended contractors whom you can pay to inspect your home. Add Window Treatments Window treatments can also help you reduce your heating and cooling costs, while making your home look a bit more stylish. Hang roman blinds or a pair of thick curtains in your windows to block the heat in the summer and keep cold air from seeping in through the windows in winter. Keep the shades or blinds lowered or the curtains drawn in the summer to efficiently reduce heat gain. Drapes with a white backing can reduce heat gain in the summer up to 33 percent, according to the Department of Energy. Choose Better Materials Cabinets made from particle board might be held together with a

formaldehyde-based glue, which is a carcinogen and pollutant that contributes to smog and reduces indoor air quality. To reduce your exposure to formaldehyde and other volatile organic compounds, choose cabinets and other materials that are formaldehyde-free. If you use wood cabinets instead of particle board or fiberboard, look for woods that are certified by the Forest Stewardship Council, which means the wood came from a forest that is managed in an environmentally responsible and sustainable way. Other materials, such as flooring and counters, are available in renewable and sustainable sources such as cork and bamboo, as well as recycled rubber and stone. Dispose of Appliances

Properly Upgrading the older appliances found in your new home is a simple way to improve your home’s interior and cut the amount of energy it uses. Look for new appliances that have the Energy Star label, because they use around 15 percent less energy than non-labeled appliances. When you get new appliances, don’t just chuck the old model out with the garbage. Find out the proper disposal procedures for your area. Older appliances, such as refrigerators, can contain hazardous materials, including mercury and oil. Some stores will pick up and dispose of old appliances for you, or you might be able to recycle them with your municipality. by Aimee Miller in Greener Properties from PropertyManager.com a Service of AppFolio

LED Lighting ...continued from page 2 making them far easier to recycle. Many hardware stores and manufacturers have recycling programs especially for these lights. According to the U.S. Energy Information Administration most of the nation, 70% of our electricity is generated through coal or natural gas switching to energy efficient lighting will reduce our need for these environmentally harmful energy sources. In Oregon our power is generated through hydro-electric and natural gas, with some of slack picked up by Coal and Biomass, meaning that even little changes can remove coal from our consumption profile.

Rental Housing Journal Arizona • June 2014

Conclusion For commercial owners, energy efficient lighting upgrades, specifically LED lighting, improve your property in many ways. LED are comprehensively more energy and cost effective than comparable lighting methods, saving on cost, energy consumption, and maintenance, while also reducing stress on other operations like HVAC. The cost of labor, including installing, replacing and repairing, will reduced, saving owners time and money that would otherwise be used to organize and pay technicians. In addition these savings increase the value of your asset, making your property more

desirable for owners. Lighting that’s up to the highest efficiency standards will be a great selling point for potential tenants, who are looking to save on energy costs with top of the line operations. Time is running out to take advantage of the programs and rebates that will make your LED transition easier. However, if it happens today or in a year LED lights are still the best all-around lighting value and just may be the brightest idea for improving your property. By Ari Goodblatt of Bluestone and Hockley and Jim House of LED Trail

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Three Important Steps for Welcoming New Property Management SuperStars! by Ernest F. Oriente, The Coach

nce you have hired a new property management SuperStar, the next step is critical. It’s now time to welcome this SuperStar into your property management company in a way that will accelerate their success and make a lasting first impression. Read the three steps outlined in this article to learn special tips for welcoming a new SuperStar and how to organize a positive and productive first week. Organizing their arrival: When organizing the arrival of a new SuperStar, preparation must begin at least one week before their first day of employment with your property management company. This preparation might include gathering the following: a company directory/handbook, a telephone/fax/address/Email list, a cell phone with fresh batteries, personalized business cards, a computer with all the necessary software already loaded for them, a folder with any corporate or medical/health forms they will need to complete on their first day and any property management forms or special business tools they will need. Here are some additional ideas: stock their office/desk with enough office

supplies for a full month, a company credit card, easy-to-follow directions for common office tools like the telephone, fax machine, computer scanner, E-mail and the copy machine, a day planner or new calendar logged with important events or meetings, and maybe a nice company mug to say “welcome aboard”. Tip From The Coach: Remember, the preparation that is done prior to the arrival of your new property management SuperStar will make for a smooth first day and ensure that training can continue on the second day, with no interruptions. To ensure that each SuperStar receives the best welcome aboard, review each of the items listed in the above paragraph and create an internal checklist specifically customized for your property management company. The format and flow of this first week will make a big impact with new SuperStars, but you only get one chance to make a first impression—so make it count! Planning their first day: Wow! What a great plan to welcome your new SuperStar, right? So what’s missing? Assign a person in your property management company

who will be fully responsible for welcoming each new SuperStar in a way that is consistent with your company culture and high standards. Start by selecting a SuperStar on your current team and assign him or her to be a welcome mentor for your new SuperStar during their first week. This person can show your new SuperStar around your property management company, make introductions to your residents, go to lunch with them the first few days, and explain the company hierarchy and procedures. Most importantly, this mentor can answer the many questions all new SuperStars will have. Tip From The Coach: On the first day you can help your new SuperStar gain acceptance among the team by quoting him or her about a new idea or suggestion they shared with you. This demonstrates that you value their feedback and will be quick to give them credit. This also shows your current team that the new SuperStar on their team can make valuable contributions to the success of your property management company and will accelerate the acceptance process. Scheduling the first week: As the hiring manager you are also responsible for meeting with your new SuperStar at the start of their first day to share with them the written plan you have for their first week. This written plan should include a specific agenda, detailing their exact training steps and who will be assisting them in their learning. In addition, this plan must include a space for each of you to sign and date every step in their training plan as they are being accomplished. This is an important check-and-balance, because it communicates to your new SuperStar that they are responsible for the success of their training and you are equally responsible for the completion of a comprehensive training program. Tip From The Coach: At least for the first week, meet with your new SuperStar for fifteen minutes at the end of each day. Make sure they are

settling in, answer their questions, review their responsibilities and ask how their transition into your property management company is going. Remember, whenever someone new joins your company they bring fresh eyes and new ideas—so listen and watch closely to see what you can learn. Want to hear more about this important topic or ask some additional questions about how to welcome a new SuperStar? Send an E-mail to ernest@powerhour.com and The Coach will E-mail you a free PowerHour invitation. Author’s note: Ernest F. Oriente, a business coach/trainer since 1995 [32,050 hours], serving property management industry professional since 1988--the author of SmartMatch Alliances™, the founder of PowerHour® [ www.powerhour.com ], the founder of PowerHour SEO [ www.powerhourseo. com ], the live weekly PowerHour Leadership Academy [ www.powerhourleadershipacademy.com/pm ] and Power Insurance & Risk Management Group [ www.pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing, national real estate and apartment building insurance, SEO/SEM web strategies, national WiFi solutions [ www.powerhour.com/propertymanagement/nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ www.powerhour.com/propertymanagement/employeepolicymanuals.html ] and social media strategic solutions [ http://www.powerhour.com/propertymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified in ...continued on page 7

Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

Dear Maintenance Men: By Jerry L'Ecuyer & Frank Alvarez

Dear Maintenance Men: I am about to undertake a landscape rehab project at my building. My problem is that I have a 25-foot King Palm in the way. Can this palm be moved? I’ve also heard that landscape companies will pay for good-sized palms or at least remove the tree for free. Is this true? John

Manual

Dear John: Good question. We contacted a couple of local tree and palm experts in our area. They said King Palms do not travel well and if they are laid down on their sides for transport, they have a low survival rate. For that reason most tree companies will not pay for or remove a King Palms for free. The cost of hiring a crane truck and crew for transplant, most likely will be more than the palm is worth. If it were us, we would try to find a way to include the palm in our new landscape plans or pay for a tree removal service.

Dear Manual: Double check all the gate systems are working properly. Chances are the problem might be a stuck remote control unit in one of the resident’s car. What happens is the control button is stuck on and when the resident comes home, the gate opens automatically and chances are they are parking close to the gate. When they leave the property and get out of range of the gate receiver, the gate returns to normal operation. Finding the defective remote control unit will require a bit of detective work. You will want to determine the range of the controller, and then talk to the owners of the cars parked within the range. Another possibility may be that the remote receiver is failing. The gate will open when cars exit by driving over the gate “loops”, but will be unable to re-enter with their remote control units. The receiver is located near the gate motor assembly and can easily be replaced.

Dear Maintenance Men: I have a funny problem with the automatic vehicle gate at an apartment building we manage. It gets stuck open at odd times for no reason. I have sent the handyman to repair the gate, but he found nothing wrong with it.

Dear Maintenance Men: I am in the process of installing new dead bolt locks on a number of doors at my building. These doors have never been drilled for dead bolts before. The problem I’m running into is how to line up where to drill for the latch plate in the

doorframe. Do you have any good tricks for getting this done? Ken Dear Ken: Indeed we do. Lip stick or shoe polish is the answer. After the dead bolt lock is installed in the door and with the door open, extend the bolt. Now, dab the end of the bolt with lip stick or shoe polish and return the bolt to the unlocked position. Close the door and attempt to lock or extend the bolt into the frame. Open the door and on the frame should be the exact location of the latch bolt hole. Using a one-inch wood bit; bore a hole 1.5 inches deep to complete the installation. Another method is to cut a oneinch thick dowel rod three inches long, insert a small finish nail into the end of the dowel rod, and be sure to center the nail. Cut the head of the nail off. With the dead bolt lock removed from the door, insert the dowel rod into the latch hole in the door with the nail end facing out. Close the door and with your finger, push the dowel rod into the doorframe. Pull the rod out and your drilling site is marked exactly. One last item, if you are doing a number of doors, it may be worth purchasing

a doorknob drilling jig. It will contain all the tools needed for professional door lock drilling and installation. The kit typically costs between $50 for a home improvement store kit and up to $400 for a professional kit. The $50 kit if fine if only have a couple of doors to drill, however, if you have a lot of dead bolts to install, the professional kit is worth the money in the time and frustration it saves.

Please send us your Maintenance Questions!!! To see your maintenance question in the “Dear Maintenance Men:” column, please send submission to: Questions@BuffaloMaintenance. com Please “Like” us on Facebook.com/ BuffaloMaintenance Bio: Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation Company Websites: www.BuffaloMaintenance.com & www. ContactJLE.com www.Facebook.com/ BuffaloMaintenance

The Coach ...continued from page 10 the Xerox sales methodologies. Recent interviews and articles have appeared more than 8000+ times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 225+ articles for the property

management industry and created 400+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town… Park City, Utah, at 435-615-8486, by E-mail ernest@powerhour.com or visit their website: www.powerhour.com

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Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

he telephone is your single most important leasing tool and it’s probably the easiest “tool” to operate at your community, but is everyone answering it when it rings? Many apartment communities are spending time and money on designing creative, effective ads and signage to make their phones ring. Yet, believe it or not, many leasing people are still choosing not to answer their telephones. Worse yet, those who are relying on voice mail to take messages, are not always returning calls in a timely manner or even at all. I cannot tell you how many shopping reports I received last month with remarks like this: “If I had really been looking for a new home, I would have given up trying to reach someone here. The phone went unanswered as I attempted to make contact numerous times, and no one returned my call when I left a message.” For those property management companies who regularly evaluate their employees with a shopping program in order to “perfect their performance,” they are also testing to make sure someone is simply answering the phone and returning

calls! Of course having difficulty making contact with the leasing office is merely an inconvenience for the Secret Shopper, as I am only PRETENDING to need an apartment. What about REAL renters out there? What do you suppose happens to them? My guess is they are living in your neighborhood, perhaps in an apartment at the community next door because someone answered the phone on the day they were looking for a new home. The question that keeps coming up over and over again from property managers and owners is this: Q: How can I get my leasing people to convert more of their telephone traffic into actual visits and then rentals? Then there’s the question from the leasing consultants and managers who primarily work alone due to budget constraints and the size of their communities: Q: I know my supervisor is concerned about the office coverage and my ability to always answer the phone, but since I work by myself I have to take care of everything out on the property and also run all the

errands. I just can’t be in the office all day, every day. What can I do? A: It sounds like the people behind these questions/concerns all have the same goal in mind, but have yet to devise a plan in order to achieve their objective. While the day to day operations of caring for each community and its residents must be carried out, there will be no new residents to take care of without active leasing. The most obvious solution is as simple as forwarding your office calls to a cell phone. By having calls forwarded and being prepared to quote information about your available apartments, you can easily set appointments while you are out walking a vacant apartment or running a bank deposit. Of course you will have to always be prepared with something to write on and possibly take a message if a call comes through when you are unable to talk. However, in receiving a “live voice,” rather than a message, your callers are more likely to give you their name and number for a call back rather than leave you a voice mail. Of course if you aren’t in a position to answer your phone, how about regularly checking for messages AND returning calls? While you’re at it, how about also checking for e-mails from prospective renters. – Most of you can do that with your phone too!

lar amount of the number of callers turned into visitors and something more for every visitor who becomes a resident. (Of course a guest card system and/or telephone log would have to be in place for verification purposes. . . .) If the day-to-day responsibilities of managing your community make you repeatedly absent from your leasing office, consider forwarding your calls to a cell phone. This will minimize the inconvenience to your prospective renters and anyone else that might be trying to get a hold of you, as well as make you readily available in the event of an emergency. By the way: It’s just as important to answer the calls marked “private” as it is to pick up when the calls are routed through an ad source or you see your supervisor’s phone number come up on your caller ID! – It just may be the Secret Shopper calling . . . Are you dealing with a unique challenge or unusual situation at your community that you would like to see addressed next month? The Secret Shopper would like to invite you to send in your questions, as other people may be dealing with the same or similar issues. - You will remain as anonymous as the Secret Shopper! Please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: Joyce Kirby SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@shoptalkVALLEY, METRO, ARIZONA service.com Web site: www.shoptalkservice.com Copyright – Shoptalk Service Evaluations

A: To those property managers and owners who already have their managers forwarding calls to a cell phone, but are not seeing a high percentage of callers being converted into visitors, maybe your employees need an “incentive” as extra motivation to work harder on setting appointments, rather than just answering questions and giving out information when the phone rings. Mar,as May, It could be Jan, something simple Jul, as a Starbucks gift card in the dol-

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Experts on… The Ultimate Set of Property Management Tools

ental Housing Journal posed this question independently to four industry experts: “If you were to look into the toolbox of a successful property manager, what 3 tools would you expect to see?” Here’s what they all had to say… Kate Good: Flexibility - Due to the fact that there is a lot about the role of a manager you cannot control, flexibility will keep you on a successful path. I have encountered people who are too rigid to be flexible and they end up being rather miserable to be around. This has lasting effects on the people around you and will show up in their attitude. A manager must demonstrate their ability to do a great job no matter what lands in your lap. Awareness - All problems can be solved. Sometimes you will need to think through the problem and other times you will go around the problem. Having an awareness that others have encountered what you have, there are resources and expertise at your fingertips, will help you be a standout. Step up to help so that you can standout as a superstar. Expertise – Never stop learning

because nothing stays the same. Even the most seasoned people know that they don't know everything. Being an expert means that you are always in a state of growth even for the things you have mastered. Greg Knakal: The ability to multitask and prioritize. -- There’s always a lot to do and not enough time, so you have to know what to do, what’s important and when things need to get done. Make it happen. The 4 Ps – People, product, price and promotions. Understanding the goals of the investor – Know what your owners want and want to get out of their properties and operate the property with those goals in mind. Katie Poole-Hussa: A Working Advertisement – Potential renters are faced with weeding through hundreds of property ads online to find the perfect place to move. Not only should your advertisements for vacant units "sell" the properties, your ads should also be selling you and your company. The property amenities, pictures, and

monthly costs speak for themselves. So why not elaborate on what you as a landlord, and your company, can and will do for them as a renter. List items such as your length of experience, quick turnaround times in making repairs, available 24/7, etc. You're applying for a job just as potential renters are applying to rent. IPhone or Like Device -- Staying connected these days has become a way of life. The new culture of tenants expect quick responses from

their landlords. Acting quickly in most situations is pertinent. Whether you receive maintenance requests, vacancy inquiries, or your clients simply need information, responding to any and all communications quickly can make or break your business. Compassion – Even if we can't count it, we all know compassion is real. We've all felt its power and influence. We also know there is more ... continued on page 14

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RENTAL HOUSING JOURNAL ARIZONA

Successful Apt Mgmt Co ...continued from front page more properties and turned them around rather quickly. Our business has continued to grow, mostly from repeat clients and referrals. JK: How many units do you currently manage and where are they? How many in metro Phoenix? DJ: We manage close to 6,000 units located in the Sacramento area, Phoenix, Tucson and Reno, of which proximately 2,000 units are in Arizona. Flying my own airplane allows me to visit the properties on a regular basis, as well as respond quickly if the need arises. JK: What makes your company special?

managing apartments than what we had experienced. In 1994, we decided to start our own management company. The first property we started with was a 52 unit property that had about $15,000 in unpaid bills. We were told by the management company that it was a difficult property and that we should sell it. I did not agree as I always thought it was a good property with a lot of potential. We took it over without knowing much

of anything about the management business. However, by making reasonable decisions and dealing with issues based on our ownership experience, we had all of the bills paid within a few months and a substantial amount in savings by the end of the year. The approach we used was simple and very basic which laid the foundation for our philosophy to managing apartments. Based on the success of this one property, we acquired

480.963.3416

DJ: The thing that makes our company most special is our approach to managing. Not only do we keep a simple and basic approach, we manage as if we owned the properties, as if it were our money to spend or not spend. This concept is embraced by our managers, maintenance personnel, and all of our supervisors. Our employees have the authority to make decisions and they know I will back them up if they make a mistake. I have made many mistakes, so I know how important mistakes are in the learning process. As Dale Carnegie said, “The successful man

will profit from his mistakes and try again in a different way”. I want our employees to build confidence and self-esteem so they have the tools they need to run their properties as if they own them. Additionally, we are a family based company and seven years ago we brought in my daughter, Michele, who has worked as a CPA. She has embraced the management business and has become an integral part of our company. Her background in business and accounting makes her an asset to our company. Also, I am personally involved in every property we manage bringing my years of experience to our business. JK: You manage apartments in a number of cities in California, Arizona and Nevada. Is there anything unique to metro Phoenix? DJ: While each area may have some unique characteristics, our basic approach to managing enables us to effectively run a property no matter where it is located. We also encourage our employees to be warm and friendly and leave a positive first impression which leads to good results no matter where you are. JK: When you were in our office, you noted that you typically manage “B” and continued on page 11

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Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

Successful Apt Mgmt Co ...continued from page 10 “C” quality properties across the Valley and currently manage communities from 52 to 336 units in size. With the increase in new “A” quality apartment construction, do you think there will be significant influence on your properties? DJ: I believe the increase in “A” quality apartments will have a positive effect on “B” and “C” quality properties. With the cost of new units being high (approximately $150,000 per unit in Phoenix and $200,000 in Sacramento), the rents of these new units will have to be much higher to accommodate the higher cost of construction. We have a huge back log of people that are living at home due to the current economic conditions and once those start improving and we see meaningful job growth, we will see a greater demand for rentals. So in effect, the new units are like a new Mercedes Benz but not everyone can afford a Mercedes. This will lead to more renters being interested in “B” and “C” properties. Also, many of these new properties are being built in the outlying areas, thus, making infill properties, particularly those that have been improved, more desirable with the ability to get higher rents. JK: Since 2010, vacancy rates have dropped every quarter. Have you had a similar increase in occupancy and if so, have you been able to decrease concessions and been able to raise rents? DJ: We have definitely seen improved occupancy and we have been able to reduce concessions, as well as raise rents. However, you have to take into consideration the micromarkets and the specifics of the property you are managing. If the property is a bit run down, it will take longer to respond to an improving market. With the lack of meaningful job growth in the higher paying jobs, we have done a good job of monitoring rents to maintain good occupancy while maximizing the cash flow of the property. JK: . Since we broker apartment communities in metro Phoenix, if I wanted to

Rental Housing Journal Arizona • June 2014

suggest that a buyer consider Dick James & Assoc. for management - what main points should I tell the buyer? DJ: We have a management team that embraces our philosophy of managing everything as if we owned it. We do our best to spend money in smart ways by controlling costs, yet still effectively maintaining the property. We put a big emphasis on responding to clients and customers promptly and truthfully. Also, we get a lot of compliments on our monthly operating statement as it is very simple and easy to understand. If a client has a specific need, we are happy to go out of our way to accommodate their wishes. We tend to hire managers with good people skills and willingness and a desire to be successful, not necessarily with a great deal of managing experience. If we hire someone with a good attitude and a desire to succeed and train them using our philosophies, we will almost always be very successful. JK: You said that every time that you have taken over a property, as best you could recall, you were always able to lessen the expenses and increase the owner’s cash flow. Can you shed some light as to how you are able to do this? DJ: One of the ways we control costs is to control our use of outside vendors. We hire a variety of maintenance personnel who can do a lot of the work in-house. As an example, my maintenance supervisor in Phoenix and Tucson is a licensed electrical contractor. Anything having to do with electrical issues, he can troubleshoot, and with the assistance of his maintenance staff, solve a problem without spending much money. We recently had a fire alarm issue in one of our properties and because it was about 40 years old, the alarm company wanted to install a new system claiming they could not fix the old one which would cost about $90,000. The maintenance supervisor did research on the system and figured out how to fix it which ended up costing only about $5,000. Now the system

works well and the fire department is more than satisfied. When faced with a problem, we are always focused on going the extra mile to make the best financial decisions for our clients to maximize their cash flow. JK: At the end of our conversation – you mentioned that over the years you had developed Five Philosophies that have now come to be your guideline for management. DJ: When we started our management company, my wife was putting together the employee handbook and suggested I put something personal in the handbook from me to the employees. After thinking about it, I came up with what I call my “Five Philosophies" in apartment management. Little did I realize that these philosophies would become an integral part of our management company as it developed. The Five Philosophies have become the base we work from in managing our many apartment complexes. Whenever we take over the management a property that was managed by another company, there are always a few of these basic philosophies that are overlooked. One of the reasons it works so well is that the management team only has five basic things they have to remember. Rather than loading my management team with a lot of meaningless reports and things to do, they are able to focus on what

produces results. This keeps things simple and, if things are kept simple, things get done. Jim Kasten, CCIM Dick James, CCIM Kasten Long Commercial Group Dick James & Assoc., Inc. 2821 E Camelback Road, Ste. 600 4849 Manzanita Avenue, Ste. 91 Phoenix, AZ 85016 Carmichael, CA 95608 602 677 0655 916 332 7459 Jim@KLCommercialGroup.com Dick@DJAProperties.com www.KLCommercialGroup.com www.DJAProperties.com The Kasten Long Commercial Group has specialized in apartment brokerage in metro Phoenix since 1998. Agents have brokerage more than 1,000 communities with gross sales in excess of 1 billion dollars. The company also provides weekly updates (by e-mail) on apartment sales and publishes an

RENTAL HOUSING JOURNAL ARIZONA

How Financial Spring Cleaning Can Lead to a Richer Long-Term Outlook 3 Areas to Consider for Increased Savings

ne lesson the average American should have learned from the recent financial crisis and gradual recovery is that putting more money into savings is, in general, good, says veteran financial expert Jeff Gorton. “When things are fine, most of us are prone to commit less of our money to savings; when the economy is down, however, we realize that having money is far more important than spending it on things we don’t need,” says Gorton, a veteran Certified Public Accountant and Certified Financial Planner™, and head of Gorton Financial Group. The personal savings rate in July 2005 hit an all-time low at just 2 percent, according to the Bureau of Labor Statistics. But in May 2009, near the beginning of the recession, the average American’s savings rate hit a high of 8 percent. “That rate dwindled as the economy recovered, which is unfortunate because you can do more with accumulated money, including benefit from investments yielding compound interest, which means that interest also earns interest in an investment,” says Gorton, who suggests practical ways to trim spending in the short term in order to get your financial house in order and accumulate more money in the long term.

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• Car buying says plenty about how a consumer views their money. For most Americans, the question is whether to buy new or used. The moment you drive a brand new car off the lot after the purchase, the car’s value drastically drops. Many of the benefits you may enjoy in buying a new car can be had with a certified pre-owned car: low miles, good-asnew functionality and, usually, that new-car smell. And, a given model will have a history, so you can avoid cars that have been recalled. Buying a certified pre-owned car will save

you several thousands of dollars versus buying new. • Summer vacation is an important lifestyle enhancer for many couples, but consider replacing the $400-per-night hotel with a condo rented through a private owner, especially if your vacation will last for an extended period. A condo rental should cost you in the ballpark of $200 per night, which totals $2,800 savings for two weeks. • Your home is probably your most significant asset if you’re like most Americans. But with that grand

house on the hill comes plenty of costs, many of which you may not need. As with a luxury car, rethinking the amount of luxury for a home can save you big on taxes, insurance and maintenance. The cost of maintaining a large home can be put toward lifestyle activities, such as travel and hobbies. “Of course, these are all simply suggestions; money plays a major role in how we achieve happiness, and I’ve found through years of working with clients, a few tweaks here and there frequently yields greater satisfaction with their money,” Gorton says. “You don’t have to be on autopilot with your expenses.” About Jeff Gorton, CPA, CFP® Jeff Gorton is a Certified Public Accountant and a Certified Financial Planner™ specializing in individual tax and retirement planning as head of Gorton Financial Group, (www. gortonfinancialgroup.com). He is also an Investment Advisor Representative under Alphastar Capital Management, an SEC Registered Investment Advisor, and has a life and health insurance license. Gorton works with individuals and their families to create and protect their financial legacies. He specializes in working with retirees in the areas of tax planning, benefits, retirement planning, estate planning and safe money techniques. He received his BBA in Accounting from the University of Oklahoma. Gorton previously worked for 10 years as the Chief Financial Officer for a large retail organization, overseeing their accounting, benefits and 401(k) retirement plans.

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Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

What Americans Want in Apartment Landscaping

s you determine ways to make your apartment complex more appealing to tenants, you should pay attention to the latest trends when it comes to outdoor spaces. More specifically, take note of what the American Society of Landscape Architects found when they conducted their Residential Landscape Architecture Trends survey for 2013. Then consider using these findings to your advantage as you work to improve your property. Opportunities to Cook and Entertain Outdoors Top the List A whopping 96% of Americans surveyed said they wanted grills outside. This was closely followed by complete outdoor living spaces, including outdoor kitchens and areas to entertain guests. If your apartment complex does not yet have a built-in barbecue area, or grills at the very least, you might be missing out on tenants who value livable outdoor spaces. Seating is equally important according to the survey results, so make sure you have tables, chairs, or even basic picnic tables set up around the apartment complex. Installing some fire pits or outdoor fireplaces may also be the key to satisfying your tenants, according to 97% of the survey respondents. Sustainability Matters When It Comes to Apartment Landscaping More people care about sustainable outdoor spaces than you might have thought, and that includes landscaping. In fact, about 94% of people surveyed said they liked low-maintenance landscapes. Of course, in

an apartment complex, the amount of maintenance might not directly affect the tenants, but it may affect your landscaping bill. Choosing plants that are native to the area can reduce the amount of work required to keep them healthy, and this move would please 87% of the survey respondents, too. Nearly as many people also like the idea of having gardens that grow fruits and vegetables. In fact, more apartment landscaping plans these days are featuring gardens as a major part of their sustainable outdoor spaces. You can offer one or even a few courtyard gardens, or even window boxes for tenants to grow their own food. Either way, this apartment landscaping can improve the quality of life in your complex. It often even increases the length of each tenant’s stay, since many people grow quite attached to their gardens after putting in hours of work to grow food.

Lighting and Installed Seating Are Also on the Minds of Many Tenants About 95% of those surveyed claimed lighting was important to them in an outdoor space. After all, this makes it possible for tenants to cook dinner outside as the sun goes down or even simply feel safer taking walks at night. Considering how much people now value sustainable outdoor spaces, you should be sure to use energy-efficient or even solar lighting with timers and sensors to help keep light pollution to a minimum. Another common desire for outdoor space is the presence of installed seating. This ranges from simple ledges and boulders to in-

stalled benches. You can install what you think would look best in your apartment complex, again paying attention to sustainability by using eco-friendly materials that can stand up to your city’s climate for years. Outdoor Recreation Amenities Are Appreciated in Modern Apartments You might be surprised to find that outdoor recreation amenities, such as pools and tennis courts, garnered only 76% of the vote in this survey. In fact, more people – about 82% – thought having weatherized chairs outside was more important. That means the ability to cook outside and sit comfortably, perhaps in front of a fire pit, is more important to many Americans than access to a pool. Of course, many apartment complexes are still expected to have such fun amenities, especially in warmer areas. However, apparently you should focus on getting grills and seating set up first if your apartment landscaping is missing these features. After all, sustainable outdoor spaces are of great importance to many tenants. By Tara Armbruster in Greener Properties from PropertyManager.com a Service of AppFolio

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Rental Housing Journal Arizona • June 2014

RENTAL HOUSING JOURNAL ARIZONA

Propert y Management Tools ...continued from page 9 owners. They’re paying you to manage their business efficiently, maintain their real estate investments and earn a nice return on them. On the other hand, there are your residents. They pay you to provide them with a safe, well-maintained and enjoyable place to call home. The problem with this picture is that the wants and needs of these two separate customers are different, and at times seemingly diametrically opposed. The best property managers I know are able to deftly balance these opposing

to achieving business success than market strategy and financial objectives. Where do these paths cross? People. Everyone has a story, and I make it a point in my business to both listen to a persons story, and take that story into consideration as the business relationship develops. Will Johnson: Winning Customer Service The property management career is largely about serving customers. On one hand, you have the property

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forces by managing expectations and selling the win/win/win. Without owners, there are no homes for your tenants and you’re out of a job. Without residents, there is no business for your owners and you’re out of a job. Your winning attitude and ability to bring balance and quality service to both, everyone’s needs are met and you not only have a job, you have a career. Organizational Tools - No matter how big or small your portfolio is, there’s a lot to juggle. Between finances and maintenance and marketing and day-today management duties, this is a bog job and one that requires an ability to organize your time and tasks. These tools aren’t a one-size-fits-all situation. For some folks a day-planner notebook, a manila folder or three and a check registry might be enough. For others, a simple out-of-the box computer program will do the trick. Still others require big powerful enterprise software that allows you to track multiple properties across multiple owners and states while doing budgets, financial projections and guiding a satellite. The bottom line is you need organizational tools to be successful in this industry, or any other really. Know what you need to organize, find a tool or tools that do the job and then use them every time. It’s that simple. Quality Forms – Your property may have a foundation made of concrete, but a good property management business has a foundation made of rental applications, lease agreements and other legal forms that are compliant with national, state and local laws. Very little can cost you and your owners more money, more quickly than legal issues with a disgruntled tenant. Per-

• Representing owners and buyers since 1998 • Over 1,000 apartment communities sold with over 1 Billion dollars in total sales • Unsurpassed “Client” dedication • Maximum value for your property

Kate Good is one of the most recognized and in demand speakers in the industry. She is one of the founding partners of the Apartment All Stars and has recently added Apartment Developer to her resume with the ground breaking of 800 apartments in Houston, TX. She can be reached at Kate@KateGood.com Greg Knackal has been in the Property Management industry for the last 20 years. He was the 2009 President of Multifamily NW and has been a member of the board for the last seven years. For the last 12 years he has worked for one of the largest apartment management companies in the state of Oregon, Princeton Property Management . Katie Poole – Hussa is a Licensed Property Manager, Syndicated Columnist in the Rental Housing Industry, Continuing Education Provider and Principal at Smart Property Management in Portland, OR. She can be reached with questions or comments at Katie@SmartPM.co. Will Johnson has been publishing in and providing services to the multifamily and residential real estate industries throughout the West for over a decade. He has over 20 years experience in sales, sales management and training.

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haps the most common cause for drawn out legal matters are bad forms. If you’re using bad forms to begin with, your business is shaky from the ground up and no matter what you do after you’re at risk. To build a strong foundation, start with forms from a reliable source. A local rental housing association is a great source for quality forms, also there are a number of sources on-line that offer state specific forms. If you have any question whatsoever, consult a local attorney specializing in landlord / tenant laws.

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Rental Housing Journal Arizona • June 2014

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7 Fun Tenets of Business that You Can Apply to Life Straight-Talking Texas Entrepreneur Offers Principles that Transcend Industry

ithin the first five years of a small-business venture, about half do not survive, according to the government’s Small Business Administration. And after 10 years, only a third are still around. “Successful entrepreneurship hits the bull’s eye of the American dream, but most simply do not make it,” says veteran Texas businessman David M. Smith, author of “The Texas Spirit.” “You don’t have to have extravagant wealth or a degree from Harvard to make it; a successful business requires essentially the same thing for a successful life – perspective.” Smith reviews some common denominators for success. 1. Aim at nothing and you always hit it. “If you’re like me – perhaps with a touch of ADD and someone who wants to do too many things than you have time for – this is a helpful aphorism,” Smith says. Not every idea that comes to mind should be pursued; be very selective with your time, and when you go after something, go full-throttle. 2. You cannot win on the defensive in business or any other endeavor.

Rental Housing Journal Arizona • June 2014

Don’t think in terms of defense; instead, think of counterattack. To take a defensive position on anything means that you have conceded at least some of your position. 3. Work toward optimal employment for everyone in your company. “At least once a year, I have a one-on-one discussion with every person in our companies – a renegotiation to hopefully renew employment for a longer period,” he says. “This adds an important personal touch and attention to detail.” Of course, the same approach will offer an excellent return in your personal relationships, too. 4. Keep in mind Union Pacific’s motto: “Safety is my responsibility.” Safety should always rank high in your priorities; it’s easy to take it for granted until a catastrophe happens. Texmark celebrates more than 25 years without a production-halting accident – a remarkable record in the industry. 5. Organize projects, planning and profit action with at least three people, but never more than five.

You need a point person for the meeting and at least two compatible partners – more than five people gums up the process. Meet weekly; the point man should set priorities and is most responsible for action. 6. People chemistry is more important than process chemistry. Just as you must have a process for making chemicals built around operating conditions that are best for the desired chemical products, so too should you have the right chemistry of people working together. The right chemistry is trickier than you think. 7. Promote voluntary participation regarding medical benefits and thrift and savings plans. It’s always best to put individuals in charge of their health and financial destiny – to let people consciously choose their plans. Monolithic systems arbitrarily imposed by institutions are the beginning of stagnated individual responsibility. About David M. Smith David M. Smith is the author of “The Texas Spirit,” www.TheTex-

asSpiritBook.com (2014; Halcyon Press). He’s the founder and owner of Chemical Exchange, Inc. and Texmark Chemicals of Galena Park, Texas. An El Paso native, he attended the University of Texas in Austin. Early in his career, he moved east to Houston and established himself in the petrochemical industry. His new book, “The Texas Spirit,” features a series of essays about the ways in which the United States can benefit from Texas’ example, including economic models and moral fiber.

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RENTAL HOUSING JOURNAL ARIZONA

Rental Housing Journal Arizona • June 2014