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

Rental Housing Journal Arizona

December 2014 - Vol. 6 Issue 12 7. Immediate Eviction Depends on Resident Actions 8. Dear Maintenance Men 9. Three Important Steps For Conducting Property Management Exit Interviews 10. Shoptalk

2. Luxury Development Heating Up as Vacancy Simmers 3. Metro Tucson Apartment Complex Sales 4. Americans' Personal Finance Sentiment Strengthens

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A Monthly Circulation To More Than 10,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel

Reduce Pool Costs in the Winter By Tom Bohner

here are significant ways to cut down on the operating costs of your semi-public swimming pool whether or not you heat it in the winter. If you do use a heater, you probably are aware of the savings a pool cover can provide. We will talk about that a little later. If you do not heat your pool, you probably run the pump 24/7 and pay just as much for pool maintenance in the off season as you do during the swim season. There is a new pool cover technology on the market today that allows you to hibernate your pool during the off-season. Hibernating your pool allows you to shut off or drastically reduce your pump running time during the off-season. As long as your chemicals are balanced at the time of hibernation, you can cover your pool and reduce your pump time to an hour a day or less in the offseason. If you post that your pool is shut down for the season, Maricopa County allows you to turn off or reduce your pump running time. Most semi-public pools do not have a time clock, but adding one for a few hundred dollars will enable you to shut off your pump for up to 23 hours per day. This will save you hundreds to thousands of dollars per year. This cover could pay for itself in as little as one year. Lock-down safety covers allow you to hibernate your pool, while also giving you peace of mind regarding continued on page 3

Appartment Market Overview

he Kasten Long Commercial Group specializes in multifamily brokerage and has been providing apartment market updates for metro Phoenix in quarterly newsletters since 1998. Past issues and detailed market data are available on their web site (www. KLCommercialGroup.com). The following is a summary of the apartment market for the 3rd quarter of 2014. Apartment Sales Remain Strong In the 3rd quarter of 2014, there were a total of 55 regular apartment sales with 10 units or more. 26 of these sales had 100 units or more. There was also one large portfolio sale that included 7 local properties for a combined price of $168,500,000. Eleven transactions included a 1031 exchange. We continue to see an increase in 1031 transactions – a good sign. Cap rates for the 100+, newer communities remained in the continued on page 6

Scottsdale, Tucson Among Top 14 Cities for Snowbirds and Retirees in 2014 Per Apartments.com

CHICAGO, PRNewswire

s winter rapidly approaches, snowbirds in the north will soon fly off in search of sunshine and relaxation. For snowbirds and retirees who are looking for cities with nice weather, rental availability, affordability, a strong economy and fellow residents who are similar in age, Apartments.com has compiled its second annual list of the Top 14 Cities for Snowbirds and Retirees in 2014. To develop the Top 14 Cities list,

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Apartments.com evaluated the following factors: • Median Age: A population indicator that offers opportunities for friendship with peers • Average Cost and Availability of Two-Bedroom Apartments: Affordable living options with room for family visitors • Median Income: An indicator of a thriving economy • Weather: Only includes cities with at least a 60% average of days of sunshine annually

• Key Amenities: Flexible leasing options for short- or long-term stays, plus air conditioning "Rental needs change as people get older," said Brad Long, president of Apartments.com. "To develop our Top 14 Cities list, we looked at lifestyle factors that make cities attractive to part-time winter residents, as well as retirees looking for a place to settle down more permanently. While southern Florida is often thought of first for this demographic, our list uncovers many other options, ...continued on page 5

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RENTAL HOUSING JOURNAL ARIZONA

Luxury Development Heating Up as Vacancy Simmers Q4 Phoenix Apartment Research Report

By Marcus & Millichap

teady employment growth and a lackluster single-family housing market are boosting demand for rentals in the Phoenix metro. Solid hiring in leisure and hospitality, and education and health services has pushed employment past its pre-recession peak. However, job cuts in the construction sector,

closely tied to the still-recovering housing market, remain a damper on the local economy. Over the past several years, home sales have declined in the metro while prices have remained fairly stagnant. Tight lending and many households being unable to afford the downpayment for a home have kept more people in the renter pool, putting downward pressure on apartment vacancy. Since

myitzchaki@MSYLaw.com

reaching a peak in 2009, vacancy has retreated nearly 700 basis points to 6 percent, the lowest rate in seven years. Elevated tenant demand has lifted confidence among multifamily developers and resulted in a wave of new inventory last year, concentrated in the East Valley. A significant portion of new supply were luxury units, which is consistent with deliveries this year. Builders are completing more high-end units in north and south Scottsdale, which has already put upward pressure on vacancy in these submarkets. Property fundamentals and economic stability are attracting buyers, particularly from California, to local assets. In the past few years, investors primarily searched for properties with value-add potential, though this trend is beginning to change alongside limited listings. Owners who acquired assets in 2011 and 2012 have invested capital into major interior and exterior renovations, which allowed these properties to reach market-rate rents. Now, for-sale inventory is narrow and mainly consists of stabilized Class A-minus and B properties, targeting a select group in the large buyer pool. Still, transaction velocity has increased over the past year as buyer motivation has shifted from higher yields to longerhold terms and steady cash flow. Private buyers and institutions are scouring the market for trophy assets in prime locations, where first-year returns can fall below 5 percent. Overall, cap rates have remained stable during the past year and fall in the mid-6 percent range.

2014 Annual Apartment Forecast Employment: Metro employers will generate 39,000 jobs this year, increasing payrolls 2.1 percent. Staff additions in the professional and business services, and education and health services sectors made up for losses in the construction segment. Last year, 49,600 workers were hired. Construction: After completing 2,850 units last year, the pace of production will accelerate to 4,950 apartments delivered in 2014. A third of this year’s new inventory will be finished in the fourth quarter. New supply is heavily concentrated in the Chandler, and North and South Scottsdale submarkets. Vacancy: Despite a substantial rise in new inventory, strong tenant demand will contribute to a 100basis point decline in vacancy to 6.2 percent. This will mark the fifth year of vacancy improvement. Vacancy dropped 40 basis points one year earlier. Rents: New inventory, particularly the addition of luxury rentals, will put upward pressure on asking rents. This year, average rents will reach $811 per month, a 4.1 percent increase. Last year, rents grew 3.5 percent. Published with permission. www.marcusmillichap.com

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RENTAL HOUSING JOURNAL ARIZONA • DECEMBER 2014

RENTAL HOUSING JOURNAL ARIZONA

Metro Tucson Apartment Complex Sales June – November 2014

here were 40 verified sales of five + unit apartment complexes between June 1st and November 18th in metro Tucso Seven of the sold properties suffered from deferred maintenance and/or a high vacancy factor. One sold as a short sale. Six were purchased as part of IRC 1031 tax deferred exchanges. The highest per unit sale price, of $150,000, was a six unit property built in 2008, near the University of Arizona. The second highest per

unit sale price was The Rock Ridge Apartments in Oro Valley. 319 units built in 1995, that sold for $95,298 per unit. The lowest per unit sale price was a five unit property in the 200 block of east 31st Street, built in 1960. It sold for $10,400 per unit. Actual cap rates of sold properties varied widely. The Tanque Verde Apartments, 428 units located in northeast Tucson sold for a 6.40% cap rate and a 7 unit property near Tucson's Veterans Hospital sold for a 14% cap rate. Most mid-town complexes sold for a cap rate between 7.5% and 8.5%.

Average Tucson apartment rents are among the lowest, of any metropolitan area, in the western United States. Tucson's economic recovery is behind that of Maricopa County and it is reflected in the rental market. Average rents have been stagnant or close to stagnant. Out of state buyers see the great upside in the Tucson rental market, clearer than local owners and property managers. Therefore, many multifamily properties are being purchased by out-of-

state or Maricopa County investors. Jade Bossert is a licensed real estate broker with Tierra Antigua Realty in Tucson. She specializes in the sale of apartment complexes and can be contacted at 520-797-6900 or tucsonrealestate@ mindspring.com.

Statistics:

Price per square foot: Actual cap rate: Gross rent multiplier: Price per unit: Sales price to asking price ratio:

Low $28.89 6.40% 5.60 $10,400 45.40%

Average $61.14 7.18% 7.06 $48,086 88.83%

Median $53.06 8.00% 6.80 $37,166 91.85%

High $102.21 14.00% 8.00 $150,000 105.55%

Reduce Pool Costs...continued from front page safety. The pool is safe because the cover is locked down, thus preventing a child or adult from having access to the water. If you are heating your pool, then you are probably aware that pool covers drastically reduce heating costs. Choosing the right pool cover is very important not only to lower heating costs, but also to ease the burden of handling the cover. Additionally, thermal covers by Solar Safe Pool Covers are designed to trap in the heat better than any other cover when you are heating with gas, propane, electric or solar. Thermal pool covers are made of several layers of insulating material that effectively trap heat in the pool, and will last many years if used and maintained properly. Although they cost more than the typical blue bub-

ble type of cover, they will last on average five to seven years and are far less likely to entrap a person who might fall on it by accident. This winter you can start saving big money by hibernating your unheated pool or by installing the right thermal cover on your heated pool. Tom Bohner is President of Solar Safe Pool Covers, Arizona’s premier manufacturer of pool covers. Solar Safer Pool Covers offers the Powerlock and HeatSaver thermal cover to apartments, private pool owners and public pools. Tom may be reached at 623869-6015, or visit www.solarsafepoolcovers.com

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RENTAL HOUSING JOURNAL ARIZONA • DECEMBER 2014

RENTAL HOUSING JOURNAL ARIZONA

Americans' Personal Finance Sentiment Strengthens

Housing Optimism Follows Suit Confidence in Home Selling Environment Hits New Survey High WASHINGTON/PRNewswire

esults from Fannie Mae's October 2014 National Housing Survey show Americans' optimism about the housing market continued its gradual climb amid greater confidence in household income and personal finances. The share of respondents who say they expect their personal financial situation to improve during the next 12 months climbed to 45 percent – seven points higher compared to one year ago – while the share expecting their financial situation to worsen decreased to 10 percent last month. Although consumer attitudes about the direction of the economy remain subdued, with only 40 percent of survey respondents saying the economy is on the right track, the October results mark a 13 percentage point improvement compared to the same time last year. "Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The share of consumers who expect their personal finances to get better is near its highest level since the survey's inception, while those expecting

their finances to get worse reached a survey low. Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it's a good time to sell a home reached another survey high. The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand. These results may help drive a healthier housing market in 2015." Survey Highlights Homeownership and Renting • The average 12-month home price change expectation rose to 2.8 percent. • The share of respondents who say home prices will go up in the next 12 months fell by one point to 44 percent. The share who say home prices will go down decreased by one point to 7 percent. • The share of respondents who say mortgage rates will go up in the next 12 months rose by three percentage points to 48 percent. • Those who say it is a good time to buy a house fell to 65 percent. Those who say it is a good time

to sell increased to 44 percent—a new all-time survey high. • The average 12-month rental price change expectation rose to 3.7 percent. • The percentage of respondents who expect home rental prices to go up in the next 12 months decreased by six percentage points to 49 percent. • The share of respondents who think it would be difficult to get a home mortgage today increased by two percentage points. • The share who say they would buy if they were going to move fell to 65 percent, while the share who would rent increased to 30 percent. The Economy and Household Finances • The share of respondents who say the economy is on the right track held steady at 40 percent. • The percentage of respondents who expect their personal financial situation to get better over the next 12 months increased to 45 percent.

• The share of respondents who say their household income is significantly higher than it was 12 months ago remained at 25 percent. • The share of respondents who say their household expenses are significantly higher than they were 12 months ago fell slightly to 36 percent. The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the ...continued on page 9

RENTAL HOUSING JOURNAL ARIZONA • DECEMBER 2014

RENTAL HOUSING JOURNAL ARIZONA

Snowbirds and Retirees in other areas of the country, that offer more than just sunshine." The Apartments.com list of the Top 14 Cities for Snowbirds and Retirees in 2014, along with the average monthly rent for a two bedroom apartment, are as follows:

$1,165 Nearby Mesa, AZ $771 Nearby Phoenix, AZ $869 Nearby Chandler, AZ $966 Nearby Glendale, AZ $731 2. Henderson, NV $980 Nearby Las Vegas, NV $823 3. Tucson, AZ $778 4. Sacramento, CA $910 5. El Paso, TX $837 6. Albuquerque, NM $825 7. Overland Park, KS $991 8. Fresno, CA $915 9. Hampton, VA $951 10. Wichita, KS $699 11. St. Petersburg, FL $1,155 12. Plano, TX $1,233 13. Little Rock, AR $846 14. Richmond, VA $928 1. Scottsdale, AZ

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Long adds, "A full and exciting lifestyle is available to snowbirds and retirees in some unexpected places, which is why it pays to look

...continued from front page

at the full picture when choosing an apartment to call home, whether it's just for this winter or for the longerterm." Methodology Apartments.com evaluated cities based on their inventory of available two bedroom apartments, the average rent for a two bedroom apartment (based on data from Apartments.com, September 2014) and median income (source: census. gov). Cities were awarded points for having a higher median age (source: census.gov) and more than a 60% average of days of sunshine annually (source: ncdc.noaa.gov). In addition, weight was given to cities with a high concentration of apartment communities offering short-term leases and air conditioned units (based on data from Apartments. com, September 2014). Cities were penalized for having a high concentration of student housing (based on data from Apartments.com, September 2014) and any city with less than a 60% average of days of sunshine annually was eliminated. Only the top city in each metro area was ranked for the top 14 list, and nearby cities with a favorable profile for snowbirds and retirees (according to the criteria above) are noted as bullet points. Apartments.com

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Market Overview ...continued from front page low 5% range while smaller and older, well located and stabilized communities were typically in the mid-6% range.

Year

Const.

Vacancy

2006

4,660

5.30%

Vacancy Rates Continue Decline Vacancy rates for the 3rd quarter for stabilized 50+ multifamily properties decreased from 6.8% to 6.5%. This is the 13th decrease in the past 14 quarters. Vacancy rates for the 50-99 communities decreased 0.14% - and the 100+ decreased by 0.39%. Of the 32 metro Phoenix sub-markets surveyed, 18 reported decreased vacancy rates and only four reported vacancy rates above 8% (west central and south Phoenix). Vacancy rates for each sub-market are posted on our web site KLCommercialGroup. Going forward, we expect the rate to increase slightly as the recently completed apartment projects start being classified as “stabilized” by the reporting agencies. Many new projects are currently in lease-up and are not part of the overall stabilized vacancy rate. To fully understand the dynamics of any particular sub market, having an in-depth understanding is critical.

2008

7,037

10.80%

2010

698

10.30%

2005 2007 2009 2011

2012 2013

2014 (1) 2014 (2) 2014 (3)

4,967 4,637 6,737 910

2,031 4,452 1,340 612

1,869

5.00% 8.50%

14.20% 9.70% 8.30% 7.30% 6.50% 6.80% 6.50%

Average Rental Rates (Individually Metered) For 50 - 99 unit size apartments, the average rental rate was $700, a 2.8% over the Q3 2013. For the 100+ unit communities, the current average rental rate is $807, a 2.9% increase from Q3 2013. We expect the rates to continue to increase for both size rages, but for the larger complexes, the increase will likely be driven by the new construction. Many of the newly constructed communities have more amenities than their competition and are often in areas with low “walk scores”. Their rents will be appreciably higher and will likely increase the overall average rents for the 100+ communities.

New Construction Remains Very Strong Seven projects were completed in Q3 totaling 1,869 units, one in Chandler, two in Tempe, two in Gilbert, one in Scottsdale and two in Phoenix. YTD there have been 3,821 units completed. There were 12 new apartment projects started (2,777u) in Q3, mostly in Phoenix, Scottsdale and Tempe. There are now a total of 33 currently under construction representing 9,089 units. This includes Optima’s 781 units at Sonoran Village. Many of these projects have commenced pre-leasing. There are also 61 additional projects in various stages from initial rezoning to final permitting - representing 14,148 units. Details of each project and a map showing the location of the current construction activity is posted on our web site under “Apartments’ – “Market Data”.

continued up-side in apartment values, it might make sense to move up into a larger property. Clearly this is how many investors made appreciable gains during the run-up from 2002 to 2007. Be Cautious Realize that not taking advantage of the current strong market is a calculated risk. The concern is that although there are many positive signs to support values increasing, there are negative concerns that might significantly impact near-term future values. For example, at some point vacancy rates will start increasing, loan interest rates will increase, there may be competition from all the new construction, there are geopolitical risks from the Middle East, the ebola virus, the US dollar being devalued and/or no longer being used as the international trading currency, rising inflation, 47 million persons in the US on food stamps, etc. Real estate is cyclic and we have had a run-up in values for the past four years.

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Where are Apartment Values Headed? This is a question we are asked often, but it’s a difficult one to answer. Apartment values have not quite regained the pre-2008 levels, but anyone that made a purchase after 2010 probably has significant equity. Since the fall of 2010, we have seen a steady drop in vacancy rates, and an increase in rental rates and overall property values. We are inherently optimistic and believe that the overall US economy will continue to improve, that Arizona will have real job growth and a strong increase in population. Especially for the “B” and “C” properties, we believe that apartment values will continue to increase in value. Due to the strong new apartment construction, some of the class “A” and “B” properties may experience ING AT T R A T downward pressure on rental rates S and occupancy. If you believe in the

Jim Kasten, CCIM, Owner, Designated Broker Kasten Long Commercial Group 2821 E Camelback Road, Ste. 600 Phoenix, AZ 85016 602 677 0655 Jim@KLCommercialGroup.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 apartment market update on a quarterly basis – past issues are available on the company’s web site (www. KLCommercialGroup.com).

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RENTAL HOUSING JOURNAL ARIZONA • DECEMBER 2014

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Immediate Eviction Depends on Resident Actions

n often misunderstood notice is one for a material and irreparable breach of the lease or law. This document is commonly called an immediate eviction notice. This article will examine the procedure in issuing the notice and when it is acceptable. Provisions of the Notice The law limits eviction actions to the most serious of violations. The key phrase is “material and irreparable.” In other words, the actions of the resident are such as to not warrant a warning or opportunity to correct them. An immediate eviction notice does not permit a landlord to remove the resident from the unit the day of the violation. Management should notify the renter with a written notice specifying what he or she did wrong. The document also should explain to the resident that he or she needs to move out immediately, and if they do not, the landlord will file an eviction action to obtain a court order. If the resident does not vacate after receiving the notice, then the

next step is to file for a hearing to obtain an eviction order. While these cases are to be set and heard by a judge within three days of filing, in reality, most are not heard for about five to seven days. Once the court rules in the landlord’s favor, the resident has 12 to 24 hours to move before a constable or sheriff can remove the renter and change the locks. Keep in mind the act or breach of contract must occur on the premises for the immediate eviction notice to be valid. Examples of Possible Eviction Actions The following are examples of breaches that are grounds for an immediate eviction: • An arrest for criminal activity either in the apartment or on the property; • Discharge of a weapon; • Damage to the apartment; • Pets becoming vicious or destroying the interior of the unit;

RENTAL HOUSING JOURNAL ARIZONA • DECEMBER 2014

• Indecent exposure; • Smell of illegal drugs from inside the apartment; • Residents threatening to move because of the actions of another renter; and • Threats of violence toward other residents or the landlord. These are examples of breaches that are not grounds for the notice: • Consistently late rent payments; • Playing a stereo or television extremely loud or throwing loud parties; • Disconnection of utilities due to failure to pay the bills; • Unauthorized pets or occupants; • A resident’s guest causing damage or other problems, which the renter has no knowledge of; and • An off-site arrest for criminal activity. While the above list is not complete, management should carefully review each factual situation before

deciding if an immediate eviction notice is proper. Consider the following example: Wy Tu Kay rents a unit at Compliance Apartments. The manager, Millie N. Eum, has Wy Tu Kay sign a lease with a crime-free addendum. A few months later, Millie N. Eum sees police officer U.A. Swat removing Wy Tu Kay from her apartment. Officer Swat informs the manager that the police found 2,000 pounds of illegal drugs in her apartment. Millie N. Eum gives Wy Tu Kay an immediate eviction notice to read while she’s in jail. He then files for an immediate eviction court order. Judge A. Glitch finds the violation to be both material and irreparable, and grants judgment to Millie N. Eum for return of the apartment. Andrew M. Hull Hull, Holliday & Holliday, PLC www.doctorevictor.com 602.230.0088

RENTAL HOUSING JOURNAL ARIZONA

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

Resizing a cabinet might be easier said than done, however a good carpenter or cabinet maker could make this job easy. Dear Maintenance Men: We are contemplating a kitchen remodel of our rental units and want to add a dishwasher. It is understood that we will have to remove one cabinet to accommodate the dishwasher. The problem is that none of the kitchen cabinets if removed will produce the correct size hole to fit a 24” dishwasher. The hole will either be too big or too small. What can we do? Peter Dear Peter: You do have a few options you can look at. A larger hole can be filled with a spacer on either side of the dishwasher to close in the hole to fit the appliance or insert a pull out spice or tray door to fit the space. The spacer will need to be painted or stained to match the existing cabinetry. If the space is too small for a standard size dishwasher, you might consider using an 18” wide dishwasher or a drawer type dishwasher. Another option is resizing your existing cabinets to fit a standard dishwasher. In other words, remove a cabinet and make it smaller.

Dear Maintenance Men: As an income property owner; what would be the best thing I could do at my building to help cut heating and air conditioning costs? I keep my property in good shape and want to help my residents keep their costs down which in turn, I hope, will keep my vacancies low. Branford Dear Branford: The number one thing you can do to help your residents and yourself is to insulate the attic. In winter time, heat is lost to the attic and out the roof and in summer the a/c will work harder to overcome the heat generated by the attic and warming the interior. Proper attic insulation will keep the heat in during winter the heat out during summer. Talk to your local utility supplier about energy efficiency programs. Many will offer different programs during the year and many are at no or low cost to the property owner.

updating the kitchen cabinets in my vacancy? I don’t want to replace them and the counter tops are in good condition. Tom Dear Tom: Give the cabinets a good scrub before anything else. You will be surprised how much dirt, grime and grease builds up over the years. Use TSP or a good degreaser for cleaning. If the cabinets are wood use lemon oil or re-varnish after cleaning and they will sparkle and look new again. Painting the cabinets will also bring new life to them. You might consider changing the color using a high gloss paint to add a bit of sizzle. Change the hardware. Knobs and hinges are the jewelry of your cabinets. Look for more modern hardware such as stainless steel, ceramic, glass or any type of steel finishes. If your cabinets look plain, add a backsplash above the base cabinets or molding around the doors for an architectural look. To get color and design ideas, take a tour of some local high end apartments and see what they have done to their kitchens.

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

Dear Maintenance Men: Can you give me some ideas on

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esearch has shown that a person who resigns from your property management company is leaving for one of three possible reasons: a new career opportunity, an unsolicited job offer or for a grievance that has not been handled correctly. Whenever a person resigns from your property management company for voluntary reasons it’s normally a surprise and it can be expensive to replace a valuable team member. This article will outline three important steps for conducting exit interviews, a process which will reduce employee turnover and improve profitability at the same time. Implementing exit interviews: Start by explaining to your property management team that an exit interview will be conducted for any person who is voluntarily leaving your company. When done respectfully, exit interviews send a strong message to your team because it says that you and your company want to know why they are leaving. An exit interview process will also help you and your property management company clearly understand why people are leaving and may give you

Ernest F. Oriente, The Coach {Article #223…since 1995}

valuable clues as to where some improvement needs to be made from within your company. An exit interview process will also give each former employee a chance to tell you why he or she is leaving and this form of closure is both healthy and productive prior to their departure. Tip From The Coach: As you begin to review your exit interview forms, look for trends that might point to deeper problems or might help you see new opportunities. Here are some trends to look for: the average length of time a person works for your property management company before they voluntarily resign, the top three reasons why a person leaves your company, the top three positions with the most turnover, what internal changes might prevent team members from leaving, do you see any turnover patterns within a specific department or group, and what are you doing on a personal level to prevent future resignations. Conducting exit interviews: The next step is to determine how exit interviews are going to be done in your property management company. Here are some typical ways to

conduct an exit interview: give an exit interview form to the person who is leaving and ask them to complete it before their last day, give an exit interview form to the person who is leaving and ask them to mail it back in a confidential envelope, meet with the departing person on their last day to conduct a verbal exit interview or schedule a time to have this person call your human resource department for a telephone exit interview. Tip From The Coach: With many of our property management clients, we have been asked to conduct exit interviews with some of their departing employees, as a neutral third party. We use a custom exit interview form for each property management company and then create a summary of our findings. From this summary, we then begin to address the internal areas that will either reduce employee turnover or make for a more productive and profitable organization. Questions to ask during an exit interview: It has been our experience that each of our property management clients want to create their own custom exit interview form. Here are

some sample questions to get you started with yours: What did you enjoy the most about working for our property management company? What did you enjoy the least and why? What suggestions or feedback can you share that would make our company stronger and more successful? Did we handle your complaint/ grievance in an appropriate and timely way? Were you clear about your career path and future within our property management company? What would it take for you to stay, if that were possible? Is there anything else you would like to share as your final comment? Tip From The Coach: Remember, if exit interviews are handled respectfully, you and your company will gain a wealth of knowledge to help grow, refine, polish and solidify the success of your property management organization. In addition, a departing employee will more than likely offer honest commentary about what is and what is not working in your company. Are you ready to really listen to what they have to say? More importantly, are you ready continued on page 11

Americans' Personal Finance ...continued from page 4 Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. For detailed findings from the October 2014 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The October 2014 Fannie Mae National Housing Survey was conducted between October 1, 2014 and October 25, 2014. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae. Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research

(ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management. Source Fannie Mae Fannie Mae enables people to buy, refinance, or rent a home.

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Shoptalk – Service Evaluations ringing off the hook like it was in July, and the few people who are moving, may or may not make it to your community before they decide to rent somewhere else first. A vacant apartment TODAY, could be “ringing in the New Year” with you on January 1st. The SECRET SHOPPER phoned three communities, looking for immediate availability. I told each consultant that I was new to the area and needed a place to live right away. Each leasing person seemed interested in helping me, but only one motivated me to visit immediately. My first call was answered promptly by a friendly voice. I stated that I was new to the area and needed to find a place right away. The consultant asked where I was moving from and what was bringing me to the area. She then asked for my name and began to inquire about the specific needs and requirements that I had. It was a pleasant exchange that went on for several minutes. Once the consultant learned what was important to me, she began to talk about various openings. She said that I had called at a good time

vailable for a limited time! Only one of its kind! Offer expires at midnight! These and similar phrases are used to make people “spring boldly into action.” They conjure up images of people rushing into department stores and retail outlets to take advantage of incredible offers on quality merchandise, especially during the holiday season. The advertisers and merchandisers are trying to create a sense of urgency in the minds of their customers; which will motivate them to take immediate action. They are in the “sales” business and want the customer to immediately purchase a product and part with some of their money! You may not have to meet monthly or quarterly sales “quotas,” but undoubtedly you have specific occupancy standards which must be met and maintained. Therefore, you need to rent a certain number of apartments each day, week or month to achieve the goals set for your community. It’s no secret that in the Pacific Northwest, many prospective renters decide to hibernate for the winter and dig in their heels until after the holidays. The phone isn’t

because there were a couple of great and if I waited, the upcoming apartapartments to choose from. The con- ment would probably be gone. I sultant invited me to visit and told agreed to come over within the next me the office hours. She said, “If I’m twenty minutes. The consultant then not here, anyone in the office can gave directions carefully, since I had help you.” She gave me directions stated I was new to the area. She sugand closed with, “I hope to see you gested I bring along her phone number, in case I get lost so I could call soon.” The next call I made was answered from the road. Before we hung up, with a great deal of enthusiasm. The she asked for my number to be able consultant asked for my name right to check back with me if I didn’t away, and I could hear the smile in make it by. The consultant thanked her voice as she spoke and offered me for calling and ended with, “I her assistance. I explained that I was look forward to meeting you. I’ll see new to the area and needed to find a you when you get here.” What are you doing to create place to live right away. The consultant asked questions to determine URGENCY when the telephone rings my needs and find out what was at your community? How do you convince the caller that what you important to me. She told me there were only two apartments available, have to offer is worth their time and and briefly described the positive consideration? Your community may attributes of each one. She asked be just one of a dozen competing for when I would like to come by, and their attention. Why should they we discussed the driving distance visit YOUR place, and why should and the fact that it was raining. The they DO IT NOW? Is there someconsultant said, “It’s been kind of thing about your apartments or comARIZONA munity thatMETRO, stands out from all the APT slow today because of the weather. If VALLEY, you want to wait and come by tomor- rest? Could it be a unique floor plan row, I’m sure the apartments will or desirable location? What about still be available.” I said, “I think I’ll the easy access to area conveniences do that.” The consultant said, “Great! or your sensational staff? Whatever it is, use it to create urgency to get I’ll see you tomorrow!” My final call was met with an your callers to visit TODAY! Feb, Jun, Aug, Oct,isDec Tomorrow TOO LATE! By then, energetic greeting andApr, an immediate offer of help. When the consultant they will have already rented from learned that I needed an apartment the leasing consultant who invited immediately, she said, “Well, you them to visit YESTERDAY! better get right over here because Secret Shopper I only have one left!” I laughed Provided by: Shoptalk and asked if she could tell me a little Service Evaluations bit about it first. The consultant Phone: 425-424-8870 described the apartment interior, as E-mail: Joyce@shoptalkservice.com well as the view. She explained that Website: www.shoptalkservice.com the “view apartments” don’t open Copyright © up very often, and said this one was Shoptalk Service Evaluations especially nice because of its southwestern exposure. The consultant said she had a VALLEY, METRO, ARIZONA APT model to show, and she could take me by the location of the apartment for rent. She told me they were still getting it ready, but that I could move into it by the week-end. The consultant asked if I had time to come over right now. She said she had another appointment in an hour Jul, Sep, Nov, Jan, Mar, May,

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The Coach

...continued from front page 9

to take the action steps to resolve, fix, and improve whatever is necessary? For leading trends about property management since 1995, surf www.powerhour.com Want to hear more about this important topic or ask some additional questions about how to build a custom exit interview form? 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 [32,850 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 apart-

ment 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 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 Olympictown…Park City, Utah, at 435-6158486, by E-mail ernest@powerhour.com or visit their website: www.powerhour. com

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