Rental Housing Journal Arizona April 2016

Rental Housing Journal Arizona

April 2016 - Vol. 8 Issue 4

2. Arrest Records in Federally Assisted Housing

7. Common Tenant Complaints and How to Handle Them

3. I Won – Now What?

8. How Wireless Security Transformed the Real Estate Industry

5. Window Film – How Its Proper Use Can Help You Save Money

11. Dear Maintenance Men – Maintenance Tools & City Inspections

Ask the Secret Shopper – Pets & Children

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4Q15 Market Overview Multifamily Housing Update

Attract Tenants with Simple Eco-Friendly Upgrades

By Scott Matthews, Director, Strategic Accounts, The Home Depot

Payroll Job Summary Total Payrolls Annual Change RCR 2016 Forecast RCR 2017 Forecast RCR 2018 Forecast RCR 2019 Forecast RCR 2020 Forecast Unemployment (NSA)

1,954.3m 53.5m (2.8%) 41.1m (2.2%) 42.7m (2.2%) 46.4m (2.3%) 38.6m (1.9%) 34.5m (1.7%) 4.7% (Dec.)

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4Q15 Payroll Trends and Forecast The Phoenix labor market recorded its strongest year since 2006, adding a monthly average net of 53,000 (2.9%) payroll jobs, a 28% gain over 2014.

Likewise, the metro closed the year on a high note, increasing employment at a 53,500-job, 2.8% year-on-year rate in 4Q15, propelled by robust job creation in the construction, trade and services sectors. Of particular note, the largely tech oriented professional, technical and scientific services subsector surged at a 4,900-job, 4.9% annual rate, representing the fastest growth observed in nearly nine years.

Seasonally-adjusted data were commensurate, recording a net add of 31,300 jobs from October to December; the largest calendar quarter job gain since 1Q06. Likewise, the unemployment rate plunged 110 basis points over the year, dropping to 4.7% in December. continued on page 4

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he multifamily housing industry is expected by many to continue growing throughout the year, which means strategic upgrades to your property can help prepare you for increased demand and set you apart from competitors.

Approximately 65 percent of renters consider energy-efficient features when deciding what apartments to rent, according to The Center for Climate and Energy Solutions. These upgrades will also cut operational costs associated with water usage, heating, cooling and other energy, helping both you and your residents save money.

Consider these simple, eco-friendly upgrades before the summer season begins.

Save Energy Seal and insulate: Sealing gaps and cracks will help keep money in renters’ pockets. Maintenance can start by properly insulating needed areas

around windows and doors. Seal cracks and gaps with caulk, spray foam and weather stripping. This simple project can reduce energy bills by up to 30 percent and ensure that air remains inside the units.

Upgrade thermostats: Allow residents to moderate electricity and gas usage by upgrading to programmable and / or WiFi-enabled thermostats. The

thermostat can adjust to their schedule manually or automatically through a convenient app on their smartphone.

Tenants will save an average of 10 to 12 percent on heating and 15 percent on cooling bills, and you may be able to offset part of your investment by taking advantage of rebates. continued on page 6

Are You Investing in Real Estate to Go Green or to Make Green?

T

here are countless ways to make your rental properties more energy efficient. High efficiency appliances, high efficiency heating and cooling systems, solar, the list goes on and on. Most of you probably did not purchase investment real estate with the intent of saving the planet. One big question that you need to ask yourself when making your property greener is “How is this going to make me more green ($)?” Any money that is spent improving your property should increase the overall value or lower your monthly expenses or both.

Are you looking to increase the value of your property? According to a repucontinued on page 6

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Rental Housing Journal Arizona

Arrest Records In Federally Assisted Housing Judy Drickey-Prohow, Esq | Law Offices of Scott M. Clark, P.C.

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rime Free Housing does not necessarily mean housing that is free of crime or persons who engage in criminal activity, according to a memo from the United States Department of Housing and Urban Development (HUD) dated November 2, 2015.

See, http://portal.hud.gov/hudportal/ documents/huddoc?id=15-10hsgn.pdf That memo requires public housing programs, including Project-Based Section 8 housing, to reevaluate their policies of (1) refusing to rent to all applicants who have been convicted of criminal activity, and (2) automatically evicting tenants who are accused of or arrested for criminal activity. HUD’s new directive requires properties to make what will necessarily result in individualized assessments whenever an applicant, resident or occupant has been identified as someone who has or may have engaged in criminal conduct.

HUD’s new direction is a progression from earlier guidance given to public housing authorities in 2011 that emphasized the importance of giving “second chances” for previously incarcerated individuals. It also emphasizes that HUD no longer requires public housing agencies and property owners to adopt “one strike” policies to ensure that housing assistance is not provided to persons who engage in criminal conduct.

Under this new guidance, management has discretion, in most instances, to decide whether or not to deny admission to an applicant with certain types of criminal history or to terminate assistance or evict a household if a tenant, household member or guest engages in certain drug-related or other criminal activity.

Information to Consider in Denying or Terminating Assistance While HUD has not yet proposed actual standards that properties must apply, it has does mandate that they take certain information into account when exercising their discretion to admit or retain an individual or household that has engaged in criminal activity.

Specifically HUD has indicated that properties must consider all of the circumstances relevant to the particular admission or eviction decision before taking action. Among other things, properties must evaluate (1) the seriousness of the offending action; (2) the effect that eviction would have on the entire household, including family members not involved in that criminal activity; and (3) the extent to which the leaseholder has taken all reasonable steps to prevent or mitigate the criminal activity.

2

When considering whether to deny admission or terminate assistance or tenancy for illegal drug use by a household member who is no longer engaged in that activity, properties should consider whether the household member is participating in or has successfully completed a drug rehabilitation program or has otherwise been rehabilitated successfully.

Effect of Arrest Records on Adverse Admission, Termination or Eviction Decisions Like the Equal Employment Opportunity Commission (EEOC) before it, HUD has concluded that arrest records, by themselves, do not provide sufficient evidence of criminal activity to automatically justify a decision not to rent to an applicant or to evict a current resident or household. Based on that

conclusion, HUD has determined that reliance on arrests not resulting in conviction or terminating the tenancy of a household solely on the basis of an arrest may result in unwarranted denials of admission to or eviction from federally subsidized housing.

Under the new HUD guidance, prior to denying admission or evicting a person who has been arrest for criminal activity, the property must conclude, by a preponderance of the evidence, that the person engaged in the conduct for which he or she was arrested.

A crime free slip or notification, in and of itself, does not satisfy this requirement. Instead, HUD expects properties to review available evidence, such as police reports detailing the circumstances of the arrest, witness statements, and other relevant documentation, so that the property can in-

dependently conclude that the person who was arrested actually or most likely engaged in the conduct for which he or she was cited.

In addition, reliable evidence of a conviction for criminal conduct that would disqualify an individual for tenancy may also be the basis for determining that the disqualifying conduct occurred.

Due Process Rights for Tenants and Applicants As a general rule, an eviction hearing - where the tenant has been provided notice of the basis for the eviction and has had an opportunity to challenge that basis - will be sufficient due process when a household is being evicted due to criminal activity. continued on page 10

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Rental Housing Journal Arizona · April 2016

Rental Housing Journal Arizona

L

I Won – Now What?

andlords who are awarded a Judgment against their tenants often do not realize that this is only part of the process in recovering money owed them. A landlord may be awarded a judgment in one of several ways: 1) a judgment in an eviction action for rent, late charges, attorney fees, and court costs, as well as removal of the tenant from the rental property, or 2) a judgment in civil court (Small Claims, Justice Court or Superior Court) for breach of the lease which can include lost rent until the lease ends or the premises are re-rented, plus property damage beyond normal wear and tear.

What most landlords do not realize is that the judgment is really nothing more than a piece of paper saying one person owes another a certain amount of money. The courts do not act or have the power to collect the money due or force the losing party to pay. It is up to the landlord to use the procedures available through the courts to collect what is owed. There are a variety of avenues available to a landlord, and some of them are the following.

The credit reporting agencies do go to the courts and take the judgment information and place it in the tenant’s credit history. Judgments are enforceable for five years and may be renewed at the end of each five-year period.

Therefore, if the tenant attempts to buy a home, car, etc., the judgment should show up on their credit report, and they normally would have to pay off the debt to complete the transaction. You can also record the judgment with the

County Recorder’s Office, but this is only beneficial if the tenant owns real estate. A recorded judgment would have to be paid off out of any sales proceeds if the tenant’s real estate was sold in the future.

The two easiest ways to collect are garnishment of wages or a bank account. Garnishment papers are served on the employer or bank branch who must then obey the court judgment.

An employer must deduct 15% to 25% (based upon hardship) of the tenant’s wages from each paycheck until the judgment is paid. A bank must release to the landlord all money in the account less a $150 per person exemption. There are some notice requirements under the Federal Fair Debt Collection Act as well as court filing procedures that are too lengthy to discuss in this article but need to be observed. The major problem with garnishments is once a bank

account is levied upon, the tenant will most likely close the account and go to another bank. With employment there is always the possibility the tenant may lose their job, or if they are self-employed, they will report no income.

Two other means to collect are the judgment debtor examination and the writ of execution, and both of these are available through the courts. A judgment debtor examination is a court order to the tenant to appear in front of the judge and to bring all documents concerning their assets (income tax returns, wage stubs, bank statements, a list of all personal property, etc.). Once in front of the judge, the tenant is put under oath and the landlord can examine the documents and ask questions concerning them of the tenant. The writ of execution is not an order to kill the tenant, but an order to the Sheriff or Court Constable to go to the tenant’s

Publisher Will Johnson – will@propubinc.com Designer/Editor Kristin Flores – kristin@propubinc.com

new residence or place of business ( if self-employed or if the tenant owns it) and seize and sell any non-exempt property. The Arizona Statues provide a list of what is exempt, and this covers most necessary furnishings as well as a vehicle. However, if the tenant has collections or other non-exempt property, these can be sold.

If all else fails, a landlord can always turn the judgment over to a reputable collection agency and let them pursue the former tenant. The collection agency generally will take a percentage, usually 40 to 50 percent, of anything they collect. This is why it is a good idea to have a provision in your lease that the tenant agrees to be responsible for any collection agency fees or costs in addition to what is owed the landlord.

Another helpful tool is a thoroughly filled out application at the beginning of the tenancy. The application should have the tenant’s date of birth, social security number, bank account information, as well as employment. Landlords should keep a copy of each rent check which will have the branch and account information. Keep in mind it is often easier to win your case in court than to collect what is due you. This has been a general overview; you should consult your attorney for your specific case.

Andrew M. Hull, Esq. Hull, Holliday & Holliday, PLC www.doctorevictor.com 602.230.0088

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Rental Housing Journal Arizona

4Q15 Market Update ...continued from page 1

Occupancy Rate Summary Occupancy Rate (Reis) 95.2% RED 50 Rank 31st Annual Chg. (Reis) Unch’d RCR YE16 Forecast 93.9% RCR YE17 Forecast 94.0% RCR YE18 Forecast 94.5% RCR YE19 Forecast 94.8% RCR YE20 Forecast 94.8%

4Q15 Absorption and Occupancy Rate Trends Quarterly apartment demand was constructive, if less than spectacular.

Tenants absorbed 1,054 vacant units, according to Reis, down –586 units from the trailing five-year 4th quarter average (1,640) and short of our model’s 1,124-unit in-sample forecast. The model suggests that a combination of faster rent growth and home price appreciation influenced households to chose owner tenancy at the margin. Occupancy was unchanged sequentially and year-on year at 95.2% after delivery of 1,082 new units.

Surveys of 658 large, stabilized properties by Axiometrics found average occupancy of 94.4%, unchanged sequentially and 30 basis points higher y-o-y.

This observation was Phoenix’s second highest since 2007. Occupancy was consistent across classes, led by class-B

(94.8%), with classes–A (94.3%) and –C (92.9%) trailing. Demand for new space was moderate: 42 recently constructed or rehabbed properties absorbed an average of 12 units per month.

RCR statistical analysis suggests that changes in the rate of PHX apartment demand are attributable to job (+), home price (-), rent (-) and supply growth (+). As our forecast projects that home appreciation and rent growth will decelerate materially, rental demand will tend to rise. After a 2016 supply bubble is absorbed, occupancy is likely to recover to the 95% neighborhood in the forecast out years.

Effective Rent Summary Mean Rent (Reis) Annual Change RED 50 Rent Change Rank RCR YE16 Forecast RCR YE17 Forecast RCR YE18 Forecast RCR YE19 Forecast RCR YE20 Forecast

$808 5.3% 13th 2.6% 1.7% 2.4% 2.3% 2.0%

4Q15 Effective Rent Trends Reis report that metro average rent increased 5.3% year-on -year in 4Q15, reaching $808. The metric represented the fastest annual growth recorded in nine years, and placed Phoenix among the RED 50 top 15 for only the fourth quarter of the last 60. Valley rent growth was propelled by 6.3% and 2.0% same-store sequential quarter advances in the Gilbert/Chandler and Sunnyslope submarkets, respectively.

Rents among same-store, stabilized properties surveyed by Axiometrics increased at a 7.6% y-o-y rate, down moderately from 3Q’s nine-year high 8.0% pace. Class-C properties (9.9%) enjoyed the fastest growth for the third consecutive quarter, followed by classes-B (7.5%) and –A (5.4%). New properties struggled to a degree, as assets with

4Q14 comparisons made only 2.9% age age of traded properties plummeted gains. Maryvale (10.6%) and Mesa sub- from 43 and 27 years during 4Q14 and markets (8.6%-10.6%) posted the stron- 3Q15, respectively, to 21 years. The avgest trends; S. Scottsdale (2.5%) and erage unit price soared as a result, rising Central South (4.5%) the weakest.

45% sequentially to $131,221.

RCR’s 96.4% ARS (SE=0.6%) rent Cap rates declined commensurately. growth model employs metro job (+), According to CoStar, the average transpersonal income (-) and home price (-) action cap rate fell about 70 basis points growth, and sequential quarter occu- VALLEY, to 5.5% fromMETRO, 1Q14 to 4Q15.

Going-in ARIZONA pancy change (+) as independent vari- yields for trophy asset were materially ables. As payroll and P.I growth rates lower: class-A/B+ assets commandare expected to decelerate and occupan- ed prices equating to mid-4% or lower cy decline in 2016, rents are projected to caps, often on a pro forma basis for refollow suit. As metro economic perfor- cent construction properties. Class-B mance and occupancy regain strength caps settled in a 5%-5.75% range; classin 2018, rent trends should reaccelerate B-/C around Feb, Apr, Jun, Aug, Oct, 6%.

Dec to the mid– to high 2% region.

RCR lowered the cap rate proxy 20 bps to 5.3% to reflect current condiTrade & Return Summary tions. Our outlook for rent growth is somewhat at odds with market expec$5mm+ / 80-unit+ Sales 42 tations as the proxy (6.2% terminal) Approximate Proceeds $1.32bn generates only a 5.2% annual IRR on Average Cap Rate (FNM) 5.1% a 5-year hold, ranking 37th among the Average Price / Unit $131,221 R46. Below average model standard error boosts risk-adjusted returns, howExpected Total Return 5.2% ever, as Phoenix ranks 26th among the th RED 46 ETR Rank 37 peer group on this basis.

Risk-adjusted Index 3.96 RED 46 RAI Rank 26th

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4Q15 Property Markets and Total VALLEY, METRO, ARIZONA APT Returns Investors exhibited tremendous enthusiasm for Phoenix properties during 4Q15, closing on 42 acquisitions for aggregate proceeds of $1,324 million.

Both total sales and sales velocity estab- By Daniel J Hogan lished new market records, rising from Director of Research djhogan@redcapitalgroup.com 31 trades and Jan, $759mmMar, of proceeds May,in Jul, Sep, Nov, 614-857-1416 Office the comparable period of East 2014.62nd More-Street, 1010 Los Angeles, CA 90001-1598 1-800-837-5100 Toll Free Phone: 1-800-624-5269 • Fax: 1-800-624-5299 over, buyers moved up the quality curve dramatically as the unit weighted avercontinued on page 9 Octoberp September

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The medium term outlook is promising. The RED Research Phoenix payroll model projects that 40,000 or more jobs will be created annually through 2018.

The 98.0% adjusted-R2 (S.E.=0.5%) model uses the rate of change of U.S. job growth (+); and metro income (+); home price (+) and lagged GDP (+) growth rates as predictive variables. The annual rate of job creation is expected to remain above 2% through 2018, at which point each of the independent variables is likely to turn over, yielding to slower net employment gains.

Rental Housing Journal Arizona · April 2016

Rental Housing Journal Arizona

Window Film

How its proper use can help you make money.

By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

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t’s somewhat of a secret that window film has more than one application.

If used correctly and installed by a professional, window film can deliver huge savings to building owners, especially in warmer climates.

Over ten years ago we purchased a small office building to move our business into. We moved in March, and as spring transitioned into summer and the sun came out more often, our space started heating up. The air conditioning system (about 6 rooftop and ground based split units), could not handle the load and labored to cool down the building. The employees complained about the heat, and the high electric bill added insult to injury.

Installing new HVAC units would have been very expensive and the roof was not designed to support the additional weight. We looked for another answer and found one at the booth of a window film vendor during a vendor open house hosted by the Institute for Real Estate Management.

Their display was very simple. It consisted of a piece of glass with window film on one half of the glass. A heat lamp was positioned on one side of the glass and two thermometers were positioned on the other side, one parallel to the clear glass and the other one next to

the glass covered in the film. It became clear in a moment that the window film reduced the heat load significantly.

According to tests conducted by window film manufacturers, the film reduces heat loads from 25 to 85 percent.

(Results vary depending on manufacturer and type of film; research products carefully to identify the best film for your need.)

The location of the window film is also a factor. Installing film on windows that face east, south and west are typically more effective than on the shady north side of a building, and if your building is already well shaded, window film may not help at all.

Of course window film can be used in residential (single family and multifamily) applications as well. Say you wanted to renovate an apartment complex in Phoenix and the windows are 25 years old. Rather than buy new windows, you can use window film and market the advantage of lower electrical bills to potential tenants. Owners of residential buildings in hot climates are responsible for maintaining the air conditioning units, so reducing the solar heat load with window film makes a lot of sense since it relieves stress on air conditioners.

Secondary benefits of window film Although reducing a building’s solar heat intake is the primary purpose of window film, it has other advantages as well. It relieves the stress and resulting wear and tear on the cooling unit, and reduces the need for individual fans, saving energy and money. Most of these films also almost completely (up to 99 percent) reject UV rays, extending the lifetime of carpeting and furniture in addition to mitigating the harmful

effects UV rays on people. As the technology as developed, many film manufacturers have marketed other dual benefits their product.

Security and windstorms: The 3M company has developed a film series that will work effectively in wind storms of up to 185 miles per hour and will resist breaking and entering, if installed by an experienced and certified continued on page 10

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Rental Housing Journal Arizona

Eco-Friendly Updates ...continued from page 1

Are You Investing in Real Estate ...continued from page 1

Switch to LEDs: Increase savings easily by converting to LED lighting, which uses approximately 84 percent less energy than incandescent bulbs and lasts 25 times longer. Install LED lighting in interior fi xtures, pathways, hallways and parking garages. Also consider decorative LED options for communal areas. LED technology is integrated in a variety of lightbulbs and fi xtures, allowing for an easy transition and customization for the property.

Invest in HVAC: Switch to high-efficiency, ENERGY STAR®-certified units and reduce air-conditioning energy usage by up to 50 percent. Maintain the longevity by cleaning the evaporator coils and drain channels to prevent potential clogging. These practices will reduce unnecessary wear and tear on the AC unit. Take extra steps to improve the air quality for residents by having maintenance change air filters regularly, at least every 1-3 months.

of a 50-gallon unit with the footprint of a 30-gallon unit. This is an excellent option when hot water is needed and space is limited. Insulate the water heater with a blanket for extra savings.

Maintain the landscaping: Maintain a green space and reduce water usage with a low-water-use landscaping or xeriscaping plan. Mulch and drought-tolerant plants, such as coneflowers, daylilies or butterfly weeds, can help reduce and / or minimize excessive watering.

Adding decorative gravel and well-aerated soil will enhance a walkway or landscape bed, while also conserving water and adding nutrients to the green space. Improve water efficiency even further with smart irrigation technology. Smart controllers can reduce annual bills as much as 15 percent by watering plants only when necessary.

Conserve Water Tend to the bathroom: Reduce water usage by updating toilets, showerheads, faucets and additional bathroom accessories with WaterSense-labeled products, which are approximately 20 percent more efficient. Excessive water usage can be a sign of leaky plumbing, so inspect plumbing fi xtures for leaks annually to avoid water damage and potentially high out-of-pocket costs.

Update water heaters: Upgrade water heaters to newer units that are compliant with more energy efficient standards that went into effect in 2015 – some of which can have the output

Scott is responsible for managing national accounts and e-commerce while overseeing business-to-business relationships. During his 25 years at The Home Depot, he has served in a variety of roles and capacities, including Regional Pro Sales Manager, District Manager and Store Manager.

table local appraiser there are very few green upgrades that will increase the value of the property itself. “Vinyl windows may be one of the best upgrades you can make,” said the appraiser “tenants like them because it saves money on heating. Plus it will add to the appraised value.” I asked her to what level solar panels, tankless water heaters, and high efficiency furnaces add to the value of real estate. Her answer was “none”. Every buyer expects appliances, furnaces, and water heaters to be in working order. It does not matter if they are high efficiency as long as they work.

Appliances and heating/cooling systems may not add value to your property at sale but may add value to your bottom line. The potential savings on owner paid utilities such as gas, electric, and water/sewer might make some “green” upgrades worth the investment.

As a landlord you should consider investing in upgrades that either make or save you money. If you are paying the utility bill for units being heated during Oregon winters, putting in a high efficiency furnace might be a good long term investment for you. If you do not pay for the utilities, you will be spending money on upgrades that will only save tenants’ money unless you plan on passing that expense on to the tenant in the form of a rent increase or utility bill back.

Most small plexes are not separately metered for water and sewer and the owner is likely responsible for the water/sewer bill. If that is the case making small changes like low flow toilets, low flow shower heads, and low flow faucet

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aerators could save you a substantial amount of expense on your water bill over time. Another consideration is low maintenance landscaping. Grass may look good but does come with added upkeep. Look at your annual landscape expense for the last few years. You may find that lower maintenance landscaping which consists of native plants, shrubs, and trees will save you money over time.

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Rental Housing Journal Arizona · April 2016

Rental Housing Journal Arizona

Common Tenant Complaints and How to Handle Them

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eing a landlord inevitably includes dealing with tenant complaints. Managing those complaints promptly and effectively is essential for your relationships with the tenants, the security of your property and last but not least – for your landlord’s reputation. If you approach the problems in a professional manner, you are definitely going to lessen the chance of some legal issues as well.

Here are the 4 most common tenant complaints and a few useful tips on how to deal with them. Some of them can occur during the tenancy period, but others you can easily foresee and handle in advance.

The property is not clean enough Absolutely no tenant will be pleased by the thought that they will have to start cleaning the property from the very second they move in. In fact, few people will be willing to rent a place where domestic cleaning hasn’t been done since forever. So it is a great idea for you to give your rental property a good cleaning before the new tenants come and avoid starting your relationship making the wrong impression.

In case you are not capable of taking proper care of the hygiene, maybe you should hire a professional cleaning company at least a week before the scheduled moving day. Make sure no stains and dust will greet your tenants as they go through the door.

after the specialist has done their job and things are under control again.

Pest complaints Regardless of how clean the tenant keeps your property, unfortunately pests can always invade it due to many reasons other than irregular cleaning.

If the adjacent apartments, for example, have been infested with mice or bugs, this can turn out to be a great problem.

As a decent landlord, you should react immediately to such complaints. The best thing you can do when it comes to pest control is to hire an exterminator to handle the pests in your property. It will be wise of you to schedule a second appointment after 7 – 10 days and thus ensure the safety of both your property and tenants.

Inoperative keys If you are not a first-time landlord, you should not at all be surprised by such a complaint from your tenants.

Keep an extra set of keys at your disposal for emergency situations. Should you find that the lock is hard to open, it would be wise to change it as soon as possible or you may have to change the whole door if somebody gets locked inside eventually. Buying an installing a new lock promptly will make things much easier for you and your tenants.

Do not forget to change the locks every time when a tenant ends your contract is an additional security measure.

Doing your best to help your tenants will always be appreciated, so do not hide when they complain about something. After all, renting a property is a kind of a job and you will have to do it well if you want to get your rent on time.

Something does not work properly Appliances and facilities just stop working sometimes; it happens no matter that no one wants it. Test all domestic appliances in advance to prevent complaints from your new tenants. In case the same person has been renting your property for a certain period of time, make sure you respond immediately to their signal. A clogged sink or an oven which cannot heat may be or not be your tenant’s fault, but you have to handle the matter in both cases. Check the issue as quickly as you can and make an appointment with an expert if you are not capable of dealing with the problem by yourself. Warn the renter when to expect a plumber for example and pay for the service. You can figure out who is financially responsible Rental Housing Journal Arizona · April 2016

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Rental Housing Journal Arizona

How Wireless Security is Transforming the Real Estate Industry

T

he real estate industry has long been faced with a problem: “You can’t be everywhere at once.” It feels impossible to monitor your property and staff, without forgoing your other tasks. But now, with new wireless technology there is finally a solution. A professionally monitored wireless security system gives real estate professionals essential insights into their units.

More and more real estate professionals are using wireless alarm systems, to protect vacant homes, keep an eye on their staff, prevent water damage and provide extra value to their tenants.

Keep an Eye on Vacant Properties: When you’re not around, what’s happening to your properties? You hope that the answer is “Nothing”, but you worry. What if someone has broken into your home? Between squatters and copper thieves, there are many reasons to be concerned. Copper theft can cause tens of thousands of dollars in damage.

In the old days, a wired security system was the only option, but the contract and need for a landline phone usually made this a non-starter for a vacant property. With a professionally monitored wireless security system at the property, you can keep this worry at bay. When your property is monitored, if you ever have a break-in, the police will be on their way immediately. The siren will sound, and the would-be-burglars won’t have time to steal from you.

And when you’re selling the property, a security system is an easy way of letting realtors in and out. You can set up a specific PIN for them, and you’ll be able to see when they come, and how long they stay! With a home security system, you’ll know that the property is protected by more than just a lock box and a lock.

Know when your maintenance staff comes and goes: With an alarm system, you can create custom PINs that will let you know when contractors enter and exit. Many of the property managers we spoke with told us that they use this feature to make sure work that needs to get done

gets done. Know who has come and gone from what apartment or home easily. You can make sure that your maintenance needs are addressed, that your staff is doing its diligence, and just in case, you have a record of it all!

If you and your renters agree, you can also set up a specific maintenance PIN. The maintenance PIN can be added for all units and will not be able to be seen by the tenants. Consequently, you can use the same number for each property, without security risk, by adding a maintenance PIN.

Stay on top of your pipes and plumbing: New wireless security systems, let you monitor the environment in your properties. Worried about freezing pipes?

No need with a freeze sensor. You’ll be able to access the temperature at the property remotely, you never need to stress, or get in your car and drive down to check the property out. Assurance at your fingertips.

And it’s not just the freezing pipes that a security system helps you combat. Never worry about whether or not the pipes burst, or if a washing machine is leaking. To the average apartment, water can cause $11,000 or more worth of damage. Water damage is expensive and time consuming to repair, but water sensors let you know as soon as they detect even a small amount of water. This way you can prevent any damage from happening and move on with your day.

Provide Extra Value to Tenants: With wireless security systems, once you buy your system, they belong to you. Therefore, you can do anything you’d like with them. This includes providing systems to your tenants. It’s easy to transfer ownership. Alternatively, many property owners and landlords rent the security system as part of the apartment. You can either have the tenant subscribe to the monitoring service, or you can take care of this for them! Your tenants will love the extra security that comes with your homes!

SK THE SECRET SHOPPER Pets & Children

M

any apartment communities strive to create a welcoming office environment in order to put prospective residents at ease.

From aromatic scents and freshly baked cookies to a warm fire, these comforts communicate a feeling of “home.” However, when managers have an office connected to their apartment or even inside their apartment home, sometimes the lines between the professional office and an employee’s personal space can blur.

Q

I supervise several apartment buildings in which many of my managers work out of an office attached to or in-

side their apartment. Some of these employees have young children and pets.

Often when I call these properties, I hear a dog barking or a child crying, and not always in the background. Sometimes I am even put on hold while the manager deals with an urgent child-related matter. I am concerned about these situations and how they are affecting residents and prospective renters. However, I’m not quite sure how to deal with this issue since these managers have a personal residence attached to or combined with their office.

A

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8

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You have a valid concern and it needs to be addressed. Yet, much respect and consideration are required when dealing with people regarding their pets and children. - ESPECIALLY their children! However, your employees must be made to understand you have certain expectations regarding office protocol during business hours. If your employees are regularly allowing their children or pets to be in the leasing office during these hours, then this is a disruption to the leasing process and an inconvenience to your residents or prospective renters.

Regarding pets, this could end up becoming a liability for your company, community and/or owner. Many people have pet allergies and/or phobias.

When someone is looking for an apartment, they do not expect to enter a leasing office; which is a “place of business,” and find themselves confronted by a dog. They also aren’t thinking they have to be prepared with a medication to counteract their body’s response to an extreme cat allergy. They are expecting a professional business setting where they plan to get information about renting an apartment.

As with any other office policy or procedure, something in writing regarding these issues will help your employees know what the expectations are. It might seem like “common sense” to you for your managers to keep their

personal lives separate from their professional lives. On the other hand, when people “live where they work,” it’s not always easy to keep the lines clearly defined; these managers have an obligation to their families as well as to their residents and employer.

No matter what type of situation you are dealing with on site, it’s important to keep the lines of communication open.

This will ensure the onsite managers understand your expectations and help reassure them you are committed to providing the support they need. That way, they can handle their responsibilities at work, as well as at home, and put appropriate distance between the two.

After all, employee turnover can have an even greater impact on the dynamics of your community and bottom line, than apartment turnover.

If you are interested in leasing training or have a question or concern you would like to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employee evaluation needs: www.jancyn.com ASK THE SECRET SHOPPER Provided by: Joyce (Kirby) Bica Former owner of Shoptalk Service Evaluations Consultant to Jancyn Evaluation Shops E-mail: shptalk2@gmail.com Copyright © Joyce (Kirby) Bica

Rental Housing Journal Arizona · April 2016

Rental Housing Journal Arizona

4Q15 Market Update ...continued from page 1

The information contained in this report was prepared for general information purposes only and is not intended as legal, tax, accounting or financial advice, or recommendations to buy or sell currencies or securities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED Capital Group. RED makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Under no circumstances should any information contained herein be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy.

Any reliance upon this information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors.

Rental Housing Journal Arizona 路 April 2016

9

Rental Housing Journal Arizona

Window Film ...continued from page 5 installer. This micro layered technology is typically blast and tear resistant (see their website for examples).

Anti Graffiti / Surface Protection Series: 3M also offers products that are graffiti and scratch resistant. They can be either 4 or 6 millimeters thick and offer protection from taggers in high risk areas by using an invisible sacrificial layer to protect glass from acid etchings, scratches and tagging. This layer can also protect window surfaces from regular wear and tear.

This product solved a recurring tagging problem we had at a commercial building we manage in a high risk area.

Vagrants had repeatedly defaced the windows using keys and other materials. We replaced the windows twice before discovering this window film.

That was eight years ago. The surface is scratch resistant and has held up well.

Though there is evidence of attempts of attacks to the surface since the installation, the perpetrators eventually became frustrated by the lack of results that they stopped attacking the building altogether. If, perchance, they have some success, we can always strip off

the film and replace it rather than installing a new window.

The film offers the added benefits of heat load protection (these windows are on the south side), and privacy.

The window film is dark and reflective which makes it difficult to look into the space, (preventing a thief from “casing the joint” by looking through the windows.)

Saving you money In select situations, window film can be used to reduce heat load, the stress on HVAC systems, electrical bills, glare and crime. It also distributes light better in some applications. As you troubleshoot operational problems and/or attempt to reduce energy needs, consider the use of window films as an economical alternative to window or cooling unit replacements.

Note: There are any more uses of window films. In a future article we will address how window films can be used decoratively or to increase privacy in the interior of buildings with glass walls.

Advertise in Rental Housing Journal Arizona Circulated to over 10,000 apartment owners, on-site and maintenance personnel monthly

Call 503-221-1260 for more information

Arrest Records in Federally ...continued from page 2 3. The length of time since the applicant’s incarceration.

When a property is denying an applicant an opportunity to reside in public or other federally assisted housing, properties are also required to ensure that the applicant’s due process rights are protected. Under these requirements, if an applicant is being denied the right to rent federally assisted housing due to an arrest or other evidence of criminal conduct, that applicant must be notified of the reason why the application is being denied, and must be given an opportunity to refute the evidence relied on by the property and to show why he/she should be permitted to rent there.

Implementation of Protocols In order to ensure that applicants and residents are not refused housing or evicted from federally assisted housing, HUD is also requiring the property to establish protocols to ensure that any screening, eviction or termination of assistance policies and procedures comply with the Fair Housing Act (FHA) and this memo. To that end properties are expected to institute protocols to assure that their procedures and standards are consistently applied and that decisions are based on accurate information.

4. The number of convictions that appear on the applicant’s criminal history.

5. If the applicant is now in recovery for an addiction, wither the applicant was under the influence of alcohol or illegal drugs at the time of the offense.

6. Any rehabilitation efforts that the applicant has undertaken since the time of conviction.

Similarly, criteria that should be evaluated in determining to evict include:

Best Practices Finally the HUD memo identifies several practices that it considers appropriate for screening for criminal activity.

Among other things it endorses policies that enumerate the specific factors that will be considered in decided whether to exclude an applicant, including: 1. Whether the applicant’s offense bears a relationship to the safety and security of other residents.

1. The seriousness of the offending action, especially with respect to how it would affect other residents.

2. The extent of participation or culpability of the leaseholder, or other household members, in the offending action, including whether the culpable member is a minor, a person with disabilities, a victim of domestic violence, dating violence, sexual assault, or stalking.

3. The effects that the eviction will have on other family members who were not involved in the action or failure to act.

4. The effect on the community of the eviction or failure to evict the person.

5. The demand for housing by eligible families who will adhere to lease responsibilities.

2. The level of violence, if any, of the conviction for which the applicant was convicted.

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Rental Housing Journal Arizona · April 2016

Rental Housing Journal Arizona

DEAR MAINTENANCE MEN: Maintenance Tools & City Inspections

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men: I am going to university and want to use my DYI skills to supplement my income. Being that I live in a college town, there are a lot of rentals aimed at students. Since students are sometimes hard on their living quarters and move a lot, I figured there might be a maintenance market for repairs and making rooms and rental units rent ready. I don’t have a lot of money to invest in tools and want your recommendation for the minimum I might need tool wise to get started?

Bryan Dear Bryan: Good thinking Bryan, you might just be on to something; students can be a bit hard on rental units! Keeping in mind that as a college student yourself, you have limited funds, so other than a cordless drill, we will leave power tools out of the picture. The majority of the repairs will involve drywall, plumbing and cleaning. Other than light bulbs, leave the electrical to the pros.

Basic Tools • Retractable utility knife • 5 in 1 paint scraper • Drywall saw • Drywall mud and tape • Bucket • Hacksaw • Claw hammer • Tape measure 25’ • Caulking gun • 6 way screwdriver • Adjustable wrench • Channelock tongue & groove pliers • Small hand snake for bathroom sinks.

• Toilet plunger • Broom and dust pan • Gloves • Flashlight • Safety glasses • Step stool • Cordless drill/screwdriver This is a limited tool set used for light duty work. Try to buy quality tool. Many can be found at garage sales

for a fraction of the retail price. With these tools, you will be able to change a faucet, repair drywall holes, unclog bath sink drains, caulk bathtubs, haul trash etc.

Dear Maintenance Men, I am planning major remodel work to my 4plex and need some advice. My contractor has told me not to worry and he will have everything under control but I know that city inspections can cause serious delays if we are not ready for them or do something wrong. I am not an expert or experienced in construction, what should I watch for as far as the actual inspections are concerned?

BobBob, It is not often we are able to share our experience on the actual General Contracting and building side of our business so, thank you for your question.

We have listed the top reasons why professionals do not pass inspections taken from a 2015 JLC (Journal of Light Construction) survey.

Foundation: Improper reinforcement or support of rebar Wall Framing: missing fire-blocks, hold down straps etc.

Dear Maintenance Men: I have been contemplating the purchase of a high pressure sprayer for my employees to use in maintaining and cleaning around my apartment buildings. Because these pressure washers produce a powerful stream of water, I am worried about my employees hurting themselves or damaging the building.

What size machine do you recommend and how safe are they to use? Should I rent one first?

Julia Dear Julia: As with any large ticket items it is always prudent to “try before you buy”.

Fortunately there are a variety of rental places to choose from which carry all sizes, makes and models.

A rental yard will often use the best and longest lasting machines. Most times these companies can provide you with the best information on the products in regards to maintenance, wear & tear, life expectancy and performance.

In regards to workers safety, look at the operators manual for the best advice on personnel safety wear and use.

These machines can produce a very powerful jet of water capable of ripping through clothing, skin and even break

small bones. You should always wear goggles, leather gloves, and steel toe leather work boots with nonskid soles.

Stucco & wood siding is especially susceptible to damage when using a power washer. Use the lowest setting and wide spray nozzle to avoid damage.

Lightly mist stucco surfaces if cleaning is your objective. Keep nozzle adjusted to spray not stream and approx. 2’ to 3’ away from the surface.

As with most things, proper training will help insure safe usage of power tools.

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 www.BuffaloMaintenance.com www.ContactJLE.com www.Facebook.com/BuffaloMaintenance

Floor framing: missing anchor bolts, sheeting nails missing joist.

Trusses: bracing not installed, improperly connected to wall plate Roofing: over driving of nails in shingles, missing nails, incorrect felt Window and Door: improper flashing, inadequate fire rating, improper weather stripping

5 reasons to use rentegration

Handrail: Improper height or spacing

1. Access - Rentegration.com is a web based, multi-user software offering customers 24/7 access to forms generation, archives, property management dataColor Standards for National base, basic accounting, vendor ordering • Logos are provided on the CD in all three forms: and other services.

Plumbing: missing nail plates, improper pipe support

4. Management Database - Rentegra-

tion.com is an easy to use, database driven software. Most form fields are auto populated from the database. The modTenant Network Logo ules are all integrated and work together.

For example, a customer can use the rentall black, reversed to white, or in PMS 280 Blue/PMS 7543 Gray spot or 4/color applications. roll function to identify all delinquencies, Please see below for specific use examples.

2. Rental and Lease Forms Unlimited apply fees, and create eviction forms with • No other colors are acceptable for use for the logo. use of •aNofull line of state specific rental a few clicks altering of the logo is allowed. If you have a special circumstance that simple requires something notof the mouse. and lease forms. provided on the CD,All pleaseRentegration.com call NTN NaTioNaL HeadquarTerS 1.800.228.0989 for assistance.

Logoscreated should not be put a busy background. forms •are byoverattorneys and/or 5. Value - Large property management companies that use Rentegration.com local rental housing associations. forWHITE only generation will save time BLACK (withforms 40% gray circle) 3. Simplified Accounting - Owners and money over other methods. Mid and managers can track income and ex- and small size property managers and pense for each unit, property and compa- independent rental owners can manage ny. Perfect for mid and small size property their entire business at a fraction of the managers and independent rental own- cost of other software and forms. ers, who neither have the need or budget for larger, more expensive software.

Electrical: missing grounds, GFCI protection, labeling of circuits Decks: deck not built according to the plans, improper handrail installation

state specific forms for

PMS 280/Gray PMS 7543 Exclusive Blue Industry Partner of:

Advertise in Rental Housing Journal Arizona Circulated to over 10,000 apartment owners, on-site and maintenance personnel monthly

Call 503-221-1260 for more information Rental Housing Journal Arizona · April 2016

PMS 280/PMS 7543 over color

Scan For Special Offer

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arizona, alaska, california, colorado, delaware, florida, georgia, illinois, indiana, kansas, kentucky, massachusetts, nevada, new Jersey, new york, north carolina, ohio, oregon, pennsylvania, texas, utah, washington, washington d.c., west virginia & more.

Doors/Woodwork Locks Ceilings Electric Outlets Smoke Detectors

www.rentegration.com 503-933-6437

3) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Carpet/Vinyl/Wood Vaccinations: Yes____ No____ License Number: ______________ Additional Security Deposit Required:$

Light Fixtures

AGREEMENT

Doors/Woodwork

Light Fixtures

Locks Tenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives ten Ceilings ant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions: Electrical Outlets

1) The pet(s) shall be on a leash or otherwise under tenant’sGarbage control Cans when it is outside the tenant’s dwelling unit.

TV Antenna/Cable 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly.

3) Tenant(s) are responsible for the conduct of their pet(s) Fireplace at all times.

4) Tenant(s) are liable for all damages caused by their pet(s).

5) Tenant(s) shall pay the additional security deposit listedCleanliness above and/or their rental agreement as a condition to keeping the pet(s) listed above.

6) Tenant(s) shall not allow their pets to cause any sort of disturbance or injury to the BEDROOM other tenants, guests, landlord or any other persons lawfully on the premises.

1 7) Tenant(s) shall immediately report to landlord any typeWalls of damage or injury caused by their pet.

Windows 8) This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement Blinds/Drapes shall constitute a material breach of the rental agreement. _____________________________ Landlord

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______________________________ Floor Tenant ______________________________ Light Fixtures Tenant Doors/Woodwork

Locks ©2011 NO PORTION of this form may be reproduced without written permission.

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Essential Services Plumbing Heating

permission.

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sales@rentegration.com 02

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11

Rental Housing Journal Arizona

12

Rental Housing Journal Arizona 路 April 2016