Rental Housing Journal Colorado
May 2014 - Vol. 6 Issue 5
2. The Simple Solution to Handling Packages
5. Three Important Steps for Welcoming New Property Management SuperStars!
3. Dear Maintenance Men:
7. Shoptalk
4. Positioning Family Real Estate Ownership for Future Results
www.rentalhousingjournal.com • Professional Publishing, Inc
DENVER • COLORADO SPRINGS • BOULDER
Monthly Circulation To More Than 7,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel
How to Use a Resident Survey to Improve Your Properties By Mary Girsch-Bockfrom
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t’s safe to say that property managers are constantly in search of ways to improve their properties. While some are obvious, others may not be quite so apparent. For instance, do you really know what your residents think of your clubhouse? Are they happy with property staff? Is staff response to complaints prompt or nonexistent? If you’d like to know more about what how your tenants really feel consider a survey. Resident surveys are a great way to find out what your tenants are really thinking. It’s inexpensive, convenient to distribute, and the answers are honest (as long as the survey is anonymous). But all surveys create two potential issues: what kind of questions should you ask in order to get the most out of the survey results, and how do you convince your target market – your tenants, to complete it? Here are some suggestions you may find useful: • Keep it short. Most people don’t mind filling out a survey, as long as it’s not three pages long. Anything longer and most people will either quit filling it out or simply not start in the first place. • Consider what method you will use to deliver the survey, but remember to make it as simple as possible for tenants to respond. • Provide an incentive to respond if possible. While you’ll want to keep some survey responses confidential, a survey on clubhouse Continued on page 3 Professional Publishing, Inc PO Box 30327 Portland, OR 97294-3327
7 Fun Tenets of Business that You Can Apply to Life Straight-Talking Texas Entrepreneur Offers Principles that Transcend Industry
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ithin the first five years of a small-business venture, about half do not survive, according to the government’s Small Business Administration. And after 10 years, only a third are still around. “Successful entrepreneurship hits the bull’s eye of the American dream, but most simply do not make it,” says veteran Texas businessman David M. Smith, author of “The Texas Spirit.” “You don’t have to have extravagant wealth or a degree from Harvard to make it; a successful business requires essentially the same thing for a successful life – perspective.” Smith reviews some common denominators for success. 1. Aim at nothing and you always hit it. “If you’re like me – perhaps with a touch of ADD and someone who wants to do too many things than you have time for – this is a helpful aphorism,” Smith says. Not every idea that comes to mind should be pursued; be very selective with your time, and when you go after something, go full-
throttle. 2. You cannot win on the defensive in business or any other endeavor. Don’t think in terms of defense; instead, think of counterattack. To take a defensive position on anything means that you have conceded at least some of your position. 3. Work toward optimal employment for everyone in your company. “At least once a year, I have a one-on-one discussion with every person in our companies – a renegotiation to hopefully renew employment for a longer period,” he says. “This adds an important personal touch and attention to detail.” Of course, the same approach will offer an excellent return in your personal relationships, too. 4. Keep in mind Union Pacific’s motto: “Safety is my responsibility.” Safety should always rank high in your priorities; it’s easy to take it for granted until a catastrophe happens. Texmark celebrates
more than 25 years without a production-halting accident – a remarkable record in the industry. 5. Organize projects, planning and profit action with at least three people, but never more than five. You need a point person for the meeting and at least two compatible partners – more than five people gums up the process. Meet weekly; the point man should set priorities and is most responsible for action. 6. People chemistry is more important than process chemistry. Just as you must have a process for making chemicals built around operating conditions that are best for the desired chemical products, so too should you have the right chemistry of people working together. The right chemistry is trickier than you think. 7. Promote voluntary participation regarding medical benefits and thrift and savings plans. It’s always best to put individuals in Continued on page 2
It’s Time for Sales Managers to Tip the Boat! How to Make a Splash by Managing at All Levels
By Kevin Higgins, Sales Management Expert
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ngoing management. Low performers, mid-level performers and even high performers need it. It does not assume high performance, and once high performing, does not assume it will
Current Resident or
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always continue. Everyone needs to be managed on a consistent basis. In sales, the goal of ongoing management is participation rate. Participation rate is the percentage of sales team members who are at or above plan. For a sales team, participation rate is easy to calculate. On a team of ten people where four
are above their sales plan on a YTD basis, the participation rate is 40%. Participation rate is a statistic that rarely scrutinized. Why? Sales managers are measured for making their quota. If the quota is $100 million, the sales manager’s goal to get each sales person to deliver an average of $10 Continued on page 7
Advertise in Rental Housing Journal Colorado Circulated to over 6,000 Apartment owners, On-site, and Maintenance personnel monthly.
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RENTAL HOUSING JOURNAL COLORADO
The Simple Solution to Handling Packages By Barry Hume, Package Concierge President
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any of today’s consumers enjoy the convenience of purchasing everything from groceries to gadgets online rather than traveling to brick-andmortar stores. While the convenience is a great benefit, online shopping is driving the need for creative solutions to manage package volume in apartment communities – and that has made digital package lockers one of the hottest new amenities in 2014. Why is the pressure growing for these kinds of solutions? The answer is simple: Package volume is rising rapidly. A typical 250-unit apartment community receives more than 20,000 packages each year. That’s more than 50 packages per day. That kind of volume requires concierge or leasing staff to spend more than 20 hours per week managing packages – time that could be much better spent catering to other resident services. And there is no end is sight. Online sales have grown exponentially over the last decade, and eMarketer predicts e-commerce in North America will grow from $482.6 billion in 2014 to $660.4 billion by 2017. With the growth in online sales, package management is becoming an increasingly significant part of the property management business. Owners are recognizing that on-site
professionals who manage packages are spending substantial amounts of time to individually log, store and send alerts for every package they accept. And that’s only the front end of the job. On the back end, they have to help residents when they come to pick up their packages throughout the day. For residents in apartment communities, the growth in e-commerce has made package management a critical and valuable amenity. In fact,
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a 2013 National Multifamily Housing Council (NMHC) resident survey ranked access to packages as the second most important amenity, right after fitness centers. The reasons for the high importance ranking are clear: consumers don’t want to miss deliveries because they’re not home; they want to know their packages are safe and secure; and they want to have access to their packages at convenient times. And while the greater volume of packages is a boon for delivery carriers, it also raises considerable operational challenges. If no one is available to accept a package delivery, it means the delivery professional needs to return and try again. Efficiency is an important factor in carrier profitability, and re-delivery of packages takes away from route optimization. Plus, more driving means higher gas and emissions from delivery trucks at a time when carriers are trying to meet higher sustainability goals. Everyone involved in the process – residents, delivery carriers, owners and property managers – are looking for solutions to keep up with the ris-
ing popularity of online shopping. So, digital package lockers have become one of the hottest new amenities in 2014 for good reason. Owners offer them as a cutting edge amenity for automating package handling – an amenity that residents are often willing to pay for. Property managers advocate for them so that they can focus on their jobs, rather than on logging, storing and retrieving packages. Carriers love them because they only need to scan a barcode and deposit their packages into a locker; it doesn’t matter if no one is available to accept a delivery. And residents want them so they can rest easy that their packages will be safe and secure in a locker they can access at their convenience, 24/7. Ultimately, digital lockers are also a great business investment. Property managers watch prospective residents walk away from apartments if the community has no package management solution. That loss can cost a property tens of thousands of dollars a year. Not only does a package management system keep potential residents from walking away, but it also provides the potential to reduce costs and increase revenue. Depending on how a property manages to cut costs or increase fees after installing a digital locker system, a return can be achieved in as little as 12 months. And if that’s true today, just think about the payback on this amenity as the number of package deliveries keeps growing in the years to come. Barry Hume is the co-founder and president of Package Concierge, developer of a digital locker solution for package management at apartment and student housing communities. Previously, Barry was the managing director of Primal Manufacturing and president and CEO of MATS, Inc. He holds a bachelor’s degree from Harvard University and a Master of Business Administration from The Tuck School at Dartmouth.
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7 Fun Tenets ...continued from front page charge of their health and financial destiny – to let people consciously choose their plans. Monolithic systems arbitrarily imposed by institutions are the beginning of stagnated individual responsibility. About David M. Smith David M. Smith is the author of “The Texas Spirit,” www.TheTexasSpiritBook.com (2014; Halcyon Press). He’s the founder and owner of Chemical Exchange, Inc. and Tex-
mark Chemicals of Galena Park, Texas. An El Paso native, he attended the University of Texas in Austin. Early in his career, he moved east to Houston and established himself in the petrochemical industry. His new book, “The Texas Spirit,” features a series of essays about the ways in which the United States can benefit from Texas’ example, including economic models and moral fiber.
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Rental Housing journal Colorado • May 2014
RENTAL HOUSING JOURNAL COLORADO
Dear Maintenance Men: By Jerry L'Ecuyer & Frank Alvarez
found nothing wrong with it. Manual
Dear Maintenance Men: I am about to undertake a landscape rehab project at my building. My problem is that I have a 25-foot King Palm in the way. Can this palm be moved? I’ve also heard that landscape companies will pay for good-sized palms or at least remove the tree for free. Is this true? John Dear John: Good question. We contacted a couple of local tree and palm experts in our area. They said King Palms do not travel well and if they are laid down on their sides for transport, they have a low survival rate. For that reason most tree companies will not pay for or remove a King Palms for free. The cost of hiring a crane truck and crew for transplant, most likely will be more than the palm is worth. If it were us, we would try to find a way to include the palm in our new landscape plans or pay for a tree removal service. Dear Maintenance Men: I have a funny problem with the automatic vehicle gate at an apartment building we manage. It gets stuck open at odd times for no reason. I have sent the handyman to repair the gate, but he
Dear Manual: Double check all the gate systems are working properly. Chances are the problem might be a stuck remote control unit in one of the resident’s car. What happens is the control button is stuck on and when the resident comes home, the gate opens automatically and chances are they are parking close to the gate. When they leave the property and get out of range of the gate receiver, the gate returns to normal operation. Finding the defective remote control unit will require a bit of detective work. You will want to determine the range of the controller, and then talk to the owners of the cars parked within the range. Another possibility may be that the remote receiver is failing. The gate will open when cars exit by driving over the gate “loops”, but will be unable to re-enter with their remote control units. The receiver is located near the gate motor assembly and can easily be replaced. Dear Maintenance Men: I am in the process of installing new dead bolt locks on a number of doors at my building. These doors have never been drilled for dead bolts before. The problem I’m running into is how to line up where to drill for the latch plate in the
doorframe. Do you have any good tricks for getting this done? Ken Dear Ken: Indeed we do. Lip stick or shoe polish is the answer. After the dead bolt lock is installed in the door and with the door open, extend the bolt. Now, dab the end of the bolt with lip stick or shoe polish and return the bolt to the unlocked position. Close the door and attempt to lock or extend the bolt into the frame. Open the door and on the frame should be the exact location of the latch bolt hole. Using a one-inch wood bit; bore a hole 1.5 inches deep to complete the installation. Another method is to cut a oneinch thick dowel rod three inches long, insert a small finish nail into the end of the dowel rod, and be sure to center the nail. Cut the head of the nail off. With the dead bolt lock removed from the door, insert the dowel rod into the latch hole in the door with the nail end facing out. Close the door and with your finger, push the dowel rod into the door frame. Pull the rod out and your drilling site is marked exactly. One last item, if you are doing a number of doors, it may be worth purchasing
a doorknob drilling jig. It will contain all the tools needed for professional door lock drilling and installation. The kit typically costs between $50 for a home improvement store kit and up to $400 for a professional kit. The $50 kit if fine if only have a couple of doors to drill, however, if you have a lot of dead bolts to install, the professional kit is worth the money in the time and frustration it saves. Please send us your Maintenance Questions!!! To see your maintenance question in the “Dear Maintenance Men:” column, please send submission to: Questions@BuffaloMaintenance.com Please “Like” us on Facebook.com/BuffaloMaintenance Bio: Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation Company Websites: www.BuffaloMaintenance.com & www.ContactJLE.com www. Facebook.com/BuffaloMaintenance
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Resident Survey ...continued from front page improvements or amenities does not have to be. • Eliminate ‘yes/no’ answers on the survey. If your tenant says ‘yes’ they would recommend the property, or ‘no’ they wouldn’t isn’t nearly as important as knowing why or why not. • Choose a few areas you wish to include on the survey and stick to those. For instance, it you’re thinking about upgrading the clubhouse, ask what tenants like about the existing clubhouse – then list some potential new features you are considering and measure the responses. • Same thing goes with staff. If you’re concerned about staff response to tenant complaints or interaction with tenants, ask tenants about it on the survey.
Questions about the level of courtesy tenants feel they receive or if their concerns are always handled promptly can help to point out problem areas that you may not be aware of. • Perhaps the most important thing to remember is that it’s pointless to send out a survey just for the sake of sending out a survey. Study the tenant responses, look for patterns, and start immediately to address those concerns. • PropertyManager.com a Service of AppFolio
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Positioning Family Real Estate Ownership for Future Results By Clifford Hockley President Bluestone and Hockley Real Estate Services
5. Improving the landscaping and site signage
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s you purchase real estate assets for future success you have some basic planning issues to consider: 1. Usually real estate investors establish an initial investment time frame for each investment, typically 5-10 years with a median hold time of seven years. 2. This usually works off the initial purchase costs and gives you some time to improve the operation of the property and allow it to appreciate in value.. With time and physical and managerial upgrades you can improve the prospects for consistent returns. The Basics Some of these upgrades might in clude
6. Replacing the HVAC units,\ With high energy efficient units 7. Completing Interior proper ty upgrades b. Improving Management a. Increasing rents b. By reducing vacancy c. Reducing tenant turns d. Improving customer service e. Generating ancillary income f. Changing lease terms by increasing common area costs tenants will pay 3. I recommend setting an exit date keyed to cash flow, expense and, appreciation of the asset and tax implications. After the Basics Once you have completed the basics and the investment is making a significant return and has appreciated in value, you have a few choices to make about the future of that specific investment
a. Improving the building 1. Replacing roof and gutters, 2. Completing a new paint job, 3. Resurfacing the parking lot 4. Repair of damaged siding,
• You can keep the property,
are benefits to paying it off.)
o This means you will most likely need to refinance at the end of your first loan term
• Refinance the property and use the proceeds to reinvest in a larger property
o You will have to decide if you want to pay it off and if there
• Sell the property through use of a 1031 exchange and trade in to an-
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Rental Housing journal Colorado • May 2014
RENTAL HOUSING JOURNAL COLORADO
Three Important Steps for Welcoming New Property Management SuperStars! by Ernest F. Oriente, The Coach
O
nce you have hired a new property management SuperStar, the next step is critical. It’s now time to welcome this SuperStar into your property management company in a way that will accelerate their success and make a lasting first impression. Read the three steps outlined in this article to learn special tips for welcoming a new SuperStar and how to organize a positive and productive first week. Organizing their arrival: When organizing the arrival of a new SuperStar, preparation must begin at least one week before their first day of employment with your property management company. This preparation might include gathering the following: a company directory/handbook, a telephone/fax/address/Email list, a cell phone with fresh batteries, personalized business cards, a computer with all the necessary software already loaded for them, a folder with any corporate or medical/health forms they will need to complete on their first day and any property management forms or special business tools they will need. Here are some additional ideas: stock their office/desk with enough office supplies for a full month, a company credit card, easy-to-follow directions for common office tools like the telephone, fax machine, computer scanner, E-mail and the copy machine, a day planner or new calendar logged with important events or meetings, and maybe a nice company mug to say “welcome aboard”. Tip From The Coach: Remember, the preparation that is done prior to the arrival of your new property management SuperStar will make for a smooth first day and ensure that training can continue on the second day, with no interruptions. To ensure that each SuperStar receives the best welcome aboard, review each of the items listed in the above paragraph and create an internal checklist specifically customized for your property management company. The format and flow of this first week will make a big impact with new SuperStars, but you only get one chance to make a first impression—so make it count! Planning their first day: Wow! What a great plan to welcome your new SuperStar, right? So what’s missing? Assign a person in your property management company who will be fully responsible for welcoming each new SuperStar in a way that is consistent with your company culture and high standards. Start by selecting a SuperStar on your current team and assign him or her to be a welcome mentor for your new SuperStar during their first week. This person can show your new SuperStar around your property manageRental Housing journal Colorado • May 2014
ment company, make introductions to your residents, go to lunch with them the first few days, and explain the company hierarchy and procedures. Most importantly, this mentor can answer the many questions all new SuperStars will have. Tip From The Coach: On the first day you can help your new SuperStar gain acceptance among the team by quoting him or her about a new idea or suggestion they shared with you. This demonstrates that you value their feedback and will be quick to give them credit. This also shows your current team that the new SuperStar on their team can make valuable contributions to the success of
your property management company and will accelerate the acceptance process. Scheduling the first week: As the hiring manager you are also responsible for meeting with your new SuperStar at the start of their first day to share with them the written plan you have for their first week. This written plan should include a specific agenda, detailing their exact training steps and who will be assisting them in their learning. In addition, this plan must include a space for each of you to sign and date every step in their training plan as they are being accomplished. This is an important check-and-balance, because
it communicates to your new SuperStar that they are responsible for the success of their training and you are equally responsible for the completion of a comprehensive training program. Tip From The Coach: At least for the first week, meet with your new SuperStar for fifteen minutes at the end of each day. Make sure they are settling in, answer their questions, review their responsibilities and ask how their transition into your property management company is going. Remember, whenever someone new joins your company they bring fresh eyes and new ideas—so listen and Continued on page 6
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The Coach ...continued from page 5 watch closely to see what you can learn. Want to hear more about this important topic or ask some additional questions about how to welcome a new SuperStar? Send an E-mail to ernest@powerhour.com and The Coach will E-mail you a free PowerHour invitation. Author’s note: Ernest F. Oriente, a business coach/trainer since 1995 [32,050 hours], serving property management industry professional since 1988--the author of SmartMatch Alliances™, the founder of PowerHour® [ www.powerhour.com ], the founder of PowerHour SEO [ www.powerhourseo. com ], the live weekly PowerHour Leadership Academy [ www.powerhourleadershipacademy.com/pm ] and Power Insurance & Risk Management Group [ www.pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, bill Jan,national Mar,utility May, auditing, national real estate and apartment building insurance, SEO/SEM
Future Results ...continued from page 4
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 VALLEY, METRO,tools. ARIZONA letters and presentation 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 Sep, Nov, Jul,
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• Sell the property and pay taxes and depreciation recapture.
• Gift shares of your property to loved ones or charity ( if you have an LLC) Real estate investments, especially in the short term, don’t always make money. A number of issues can present themselves throughout the process, but its important to remember not to panic and sell the property too soon. Give your self a change to renovate the property improve the occupancy rate and deal with the vagaries of the local economy. There could be external factors, such as the area’s real estate market, local employment and health of the area’s economy that are creating stumbling blocks for you. For example many years ago we managed an apartment property that was located close to a freeway and jobs. That property was like a slot machine, APT. NEWSwe never had a vacancy. Not three miles away we had another property that ran a continuous 10 % vacancy rate, and had a hard time attracting quality tenants. You would think that three miles would not make a difference, but it did. (The same issues apply to commercial properties. ) COLORADO Bottom line not all properties make money. If you make a mistake and buy the wrong property and you are not making money, try to see if you can fix it in less than twelve months. If that is not possible take your lumps and get out. If you can sell it for more that you purchased it for, you may want to wait until you have owned it to evade short term capital gains taxes. (These are higher than long term capital gains taxes, which apply after the first year) (Please confirm your particular situation with your CPA,>. Consult with real estate professionals and your CPA to understand what options you may have for selling the property or holding out for improved cash flow.
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The future Imagine you are now at the end of your investment career. Your assets are all in a trust and you want to have your kids enjoy the fruits of your investments. You have many choices. First you need to establish if your heirs want the real estate investments, or just want the cash. If they want the real estate investments then you have to strategize five things:
investments till you pass? • Do you want to give to charities? • What are the tax implications? Once you have considered these questions and assigned future leadership, what is the best course for your investment to take? Here are a few strategies we have used in the past that have seen success. • Shift from residential properties to single tenant commercial properties for ease of management. • You could invest in an UpReit and have the kids inherit the UpReit shares • You could give to a charitable organization and create a generation skipping trust, so the grandkids get the money (to avoid some state taxes) • Sell your assets and pay the taxes (not your best choice, especially if you sold assets and traded up over and over again using 1031 exchanges.) OR… Leave well enough alone and have them figure it out after you die. ( At over $10,500,000 in estate value, combined federal estate taxes kick in, in many states estate taxes start at over $1,000,000 so the tax hit is not huge if your estate tax is under $10,500,000.( Every case is different please check with your CPA and estate Attorney). So this is not a bad idea. Summary As you plan ahead you need to always plan on your final exit from your real estate investments. As your need for cash and your desire to manage the details of your real estate empire diminishes (it may or may not), you need to simplify your decision making. The more assets you have the more confusing the variables. At that stage you may only want a pain free check every month. Worrying about tenant retention and the health of your investments should eventually become a job for the next generation. You want to reach this point but it takes years of skilled planning to position yourself, your family and your investments for future success. So, Don’t wait till the last minute to reposition your portfolio, include these decisions in your long range planning and your life will be much easier and less stressful.
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• Which one of your heirs will take over from you? • What is the operating/ownership structure of your entity in the event there are multiple heirs? o Will all of the future heirs have a vote in decision making or will there be a leader/manager
Vi si t u s at www.renta l h ou si n gjo u r n al.co m
o You may want to consider assigning a family leader ( though this may cause friction based on conflicting family needs) • Do you need money from your
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Rental Housing journal Colorado • May 2014
RENTAL HOUSING JOURNAL COLORADO
T
he telephone is your single most important leasing tool and it’s probably the easiest “tool” to operate at your community, but is everyone answering it when it rings? Many apartment communities are spending time and money on designing creative, effective ads and signage to make their phones ring. Yet, believe it or not, many leasing people are still choosing not to answer their telephones. Worse yet, those who are relying on voice mail to take messages, are not always returning calls in a timely manner or even at all. I cannot tell you how many shopping reports I received last month with remarks like this: “If I had really been looking for a new home, I would have given up trying to reach someone here. The phone went unanswered as I attempted to make contact numerous
times, and no one returned my call when I left a message.” For those property management companies who regularly evaluate their employees with a shopping program in order to “perfect their performance,” they are also testing to make sure someone is simply answering the phone and returning calls! Of course having difficulty making contact with the leasing office is merely an inconvenience for the Secret Shopper, as I am only PRETENDING to need an apartment. What about REAL renters out there? What do you suppose happens to them? My guess is they are living in your neighborhood, perhaps in an apartment at the community next door because someone answered the phone on the day they were looking for a new home. The question that keeps coming
up over and over again from property managers and owners is this: Q: How can I get my leasing people to convert more of their telephone traffic into actual visits and then rentals? Then there’s the question from the leasing consultants and managers who primarily work alone due to budget constraints and the size of their communities: Q: I know my supervisor is concerned about the office coverage and my ability to always answer the phone, but since I work by myself I have to take care of everything out on the property and also run all the errands. I just can’t be in the office all day, every day. What can I do? A: It sounds like the people behind these questions/concerns all have the same goal in mind, but have yet to devise a plan in order to
achieve their objective. While the day to day operations of caring for each community and its residents must be carried out, there will be no new residents to take care of without active leasing. The most obvious solution is as simple as forwarding your office calls to a cell phone. By having calls forwarded and being prepared to quote information about your available apartments, you can easily set appointments while you are out walking a vacant apartment or running a bank deposit. Of course you will have to always be prepared with something to write on and possibly take a message if a call comes through when you are unable to talk. However, in receiving a “live voice,” rather than a message, your callers are more likely to give you their name and number for a call back Continued on page 8
Tip the Boat ...continued from front page million. Some will produce $15 million and others will produce $5 million; the sales manager only needs the total to add up to $100 million. The sales manager is incentivized to keep average performers. A sales person who only delivers 50% of their quota is better for the sales manager than the 0% they would contribute if the sales manager let them go. Research reveals that a participation rate of 60% or less will give sales managers a 10% chance of making their revenue plan. Sales managers must aim for a high (70%) participation rate to have a good chance of making plan, although it is not guaranteed. Given this, why do sales managers tolerate poor performance? What stops them from having tough conversations? Sales managers are nice. They do not want to rock the boat. Their strategy is hope. A sales rep’s performance can be evaluated on two criteria – behavior and results. Assessing whether a sales rep is or could be delivering results is fairly straightforward – it’s a math problem. There are four performer categories a sales manager works with: 1. High Performers = Deliver results + behave correctly
2. Coachable Performers = Behave correctly but results are not 100% yet 3. Tough Performers = Deliver results + behave poorly 4. Poor Performers = Poor results + poor behaviors In an ideal world, a sales manager would have 100% High Performers. Neat concept, most likely not going to happen. What is the next best thing? One hundred percent High Performers and Coachable Performers. This is attainable but it’s not the norm. Most leaders will have some Tough Performers and some Poor Performers. Imagine having ten direct reports with two in these groups. Not bad, manageable. Now imagine four out of ten. Life is tougher and tough moments happen on a daily basis. At six out of ten, it is probably tough to get out of bed in the morning. Ongoing management of performers involves monthly (minimum) One-on-Ones, observational coaching with feedback, sit downs to try and help – all the day-to-day routines to try and lift behavior and results. When these fail to work, that’s when it’s time for the performance conver-
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sation, which has five key steps: 1. Set a clear standard and set milestones of performance for the direct report. 2. Inform the direct report where they are not meeting the standard and set milestones. 3. Give the direct report the opportunity to meet the standard and set milestones. 4. Offer assistance to meet the standard and set milestones. 5. Advise the direct report of the consequences of not meeting the standard and set milestones. Sales managers know how to do this – the issue is getting up the nerve. Sales managers need to have the conversation as soon as needed – putting it off spares no one. Sales reps who want to be with you will step it up and improve. Those who are not capable/not interested will show very quickly (weeks not months) after the performance conversation. If things still don’t improve, the sales manager can move to the final warning, consulting with HR to effectively handle this and how to go your separate ways if that is required. Kevin Higgins is CEO of training organization Fusion Learning, recognized by Selling Power as one of the top 20 sales training companies in North America and as one of Canada’s Top Small and Medium Employers for 2014. He is the author of Engage Me: Strategies From The Sales Effectiveness Source.
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Shoptalk ...continued from page 7 rather than leave you a voice mail. Of course if you aren’t in a position to answer your phone, how about regularly checking for messages AND returning calls? While you’re at it, how about also checking for e-mails from prospective renters. – Most of you can do that with your phone too! A: To those property managers and owners who already have their managers forwarding calls to a cell phone, but are not seeing a high percentage of callers being converted into visitors, maybe your employees need an “incentive” as extra motivation to work harder on setting appointments, rather than just answering questions and giving out information when the phone rings. It could be something as simple as a Starbucks gift card in the dollar amount of the number of callers turned into visitors and something more for every visitor who becomes a resident. (Of course a guest card system and/or telephone log would have to be in place for verification purposes. . . .) If the day-to-day responsibilities of managing your community make you repeatedly absent from your leasing office, consider forwarding your calls to a cell phone. This will minimize the inconvenience to your prospective renters and anyone else that might be trying to get a hold of you, as well as make you readily available in the event of an emergency. By the way: It’s just as important to answer the calls marked “private”
as it is to pick up when the calls are routed through an ad source or you see your supervisor’s phone number come up on your caller ID! – It just may be the Secret Shopper calling . Are you dealing with a unique challenge or unusual situation at your community that you would like to see addressed next month? The Secret Shopper would like to invite you to send in your questions, as other people may be dealing with the same or similar issues. - You will remain as anonymous as the Secret Shopper! Please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: Joyce Kirby SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@ shoptalkservice.com Web site: www. shoptalkservice.com Copyright Shoptalk Service Evaluations
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