Rental Housing Journal Colorado October 2016

Rental Housing Journal Colorado

October 2016 - Vol. 8 Issue 10

2. As Increased Apartment Construction Catches Up With Demand and Political Pressures Stifle Rents, Google May Be the Best Way For Operators to Continue Raising Rents

3. Dear Maintenance Men Roofs and Winterizing

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2Q16 Market Overview

Preparing Your Furnace For Winter

Multifamily Housing Update

T

he weather is getting colder and colder out there. It’s time to break out the warmer jackets and turn on the heat. But before you turn on your heater, winterizing your investment properties (especially the HVAC system) should be at the top of your to-do list. Your tenants will rely on the heater throughout the cold months of winter, so it’s important to prepare the system for the upcoming winter days. Here are some helpful tips on how to get it ready.

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

1,440.0m 44.7m (3.2%) 44.7m (3.2%) 58.4m (4.1%) 56.6m (3.8%) 38.2m (2.5%) 32.3m (2.0%) 3.4% (July)

2Q16 Payroll Trends and Forecast Denver establishments added workers to payrolls at a faster pace in 2Q16, accelerating from 1Q16’s 38,900-job, 2.9% year-on-year performance to a 44,700 (3.2%) rate. The construction and healthcare sectors were primarily responsible, contributing net y-o-y gains totaling 12,900 (5.3%) jobs, more than two times 1Q16’s 5,600-job advance. Gains in the higher wage durable goods and business services sectors also were constructive. The sectors collectively hired at a 4.0% rate, up from 1Q16’s 3.6%.

The seasonally-adjusted series recorded a solid 10,500- job April-to-June increase, on par with the year-ago peri-

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Tip #1: Clean and replace filters.

Did you know that dirty and clogged filters can cause big problems? Furnace filters are incredibly important parts of the overall system and if they’re clogged with dirt, pet hair or debris, continued on page 7

8 Ways to Profit By Properly Managing Your Commercial Leases

By Clifford A. Hockley President, Bluestone & Hockley Real Estate Services

R

eal estate is a relationship-dependent business, and no relationship is more important to real estate than the landlord/tenant relationship. Yet no relationship in real estate deals with more divergent interests.

The lease is the bond that holds this crucial relationship together and selecting the right lease clauses and leasing approaches can add significant value to a property or prevent unnecessary losses. The following are some examples of lease clauses and leasing decisions that can help increase property value.

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Rental Housing Journal Colorado

As Increased Apartment Construction Catches Up With Demand and Political Pressures Stifle Rents, Google May Be the Best Way For Operators to Continue Raising Rents

A

ll is fair in love and war, and portfolio managers that love revenue and rent increases are using Google (of all things) to win the war for the most profitable renters. And, its working!

Let’s take the bay area for example, easily one of the hottest markets in the United States. In 2015, San Francisco experienced double-digit increases in apartment rents with occupancy rates unaffected by these skyrocketing increases. This year has been a bit of a different story. Although rent increases are still at a more than acceptable 3.7% for most of the Bay, it’s a far cry from the boom of 2015.

With many renters unable or unwilling to pay premium rent in San Francisco choosing to look to the east in Oakland, the battle to capture renters willing to “pay-to-stay” has turned to SEO and Google search results to maintain high single digit and even double digit annual rent increases in the cooling San Francisco market.

The counter-pressure from construction completions on 2016-2017 San Francisco rent increases is turbocharged in the political arena with city leaders asking private developers in San Francisco to rent 20 percent of units in

new apartment buildings at below-market prices. Requirements like this take an even bigger bite out of developers and property managers margins, placing even more importance on maximizing revenue from the market-rate 80%.

Search engine optimization or SEO in short, is a process that highly skilled digital marketers use to optimize apartment websites for search engines like Google, Yahoo and Bing, improving the community’s visibility with potential renters online. Apartment SEO is a

bit trickier, as the SEO company must understand the complex arena that is multifamily real estate. The last thing a community wants to do is end up ranking for searches that only bring unqualified renters.

Apartment SEO that is done right puts developments miles ahead of their competition. If two apartment sites are promoting the same category of units in the same neighborhood, the search engine optimized community is far more likely to get leased in a shorter

time and at higher rent rates. It quite simple, if the ideal renters can’t find you, they find someone else and somewhere to live.

Search engine optimization is essential to San Francisco apartment owners and managers because: The overwhelming majority of renters are more likely to choose one of the first five actual property website suggestions in the results page. 99% of all San Francisco apartment searches start oncontinued on page 8

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info@rentalhousingjournal.com Rental Housing Journal Colorado · October 2016

Rental Housing Journal Colorado

DEAR MAINTENANCE MEN: Roofs and Winterizing

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men: When is the best time to do an annual roof inspection? Can you give me some pointers as what to look for when I inspect the roof?

Tom Dear Tom: The best time is before it rains! However, we find summer and fall to be most the prudent time to inspect and repair the roof. In other words, don’t wait to do roofing work after the first rains of winter. The roofing contractors will be very busy and costs may go up or you may have to wait in line for the work to get done. Inspect the roof during the summer and fall and get the roofing work done before it becomes an emergency. During the roof inspection, pay close attention to the flashing.

Flashing is used to transition between the roofing material and the building or a change in roofing direction or angle.

Flashing can also be found where pipes or a chimney come up through the roof.

The flashing is sealed with roofing tar and water leaks can form when the sealing tar cracks or separates from the building or the flashing material. Look for curled up roof edges on composition roofs, low spots on flat roofs and bird nests in tile roofs. Check all roof

drains and cut away any trees branches that are touching or overhanging the roof. While you are inspecting the roof, check the gutters. Winter storms have a way of loosening gutters and filling them with gunk thereby causing them to lose their pitch and pool water. Pooling or overflowing gutters can deteriorate fascia boards and siding.

Dear Maintenance Men: I’m getting my work check off list started before winter comes. Do you have recommendations of what should be on the check list?

Lisa Dear Lisa: After checking and repairing any roof damage, we recommend looking at the outside walls of the property.

Stucco, wood siding or other vertical surfaces, is the building’s skin. Cracks, breaks and other damage to the siding invite “infection” to your building. This “infection” can take the form of wood rot, mold, siding delaminating or separation from the subsurface, material breakdown of the stucco will cause discoloration and crumbling. Common siding material found in most buildings is stucco, wood, brick, vinyl or concrete panels etc. Water intrusion of the siding can find its way through the small-

est cracks by capillary action or more directly from misaligned sprinklers or other water sources. A little known and often forgotten solution to leaky windows is the clogged weep holes along the bottom of the window frame and track. These weep holes clog with dust and debris and very easily can cause water to enter the building through the window frame or even through small cracks in the stucco or siding at the edges of the window frame.

Dear Maintenance Men: It won’t be long before we need to change our clocks for winter. I’m a bit concerned about the lights at my apartment building. I have various fixtures, sensors and timers, not one of which turns on the lights at the same time. Some don’t turn off or on at all.

Any suggestions?

Brian Dear Brian: There are two ways to effectively control exterior lighting: 1: A timer clock.

2: A photocell for detecting light and dark Both time clocks and photocells have been around forever. We prefer to activate landscape lighting with a photocell as it is virtually maintenance free. A photocell will ensure the property has light only when it is needed and turn off automatically with the approach of daylight. Be sure the photocell lo-

cated where it can “see” ambient light and not near an artificial light source.

A time clock needs constant attention in order to keep up with the changing seasons and adjustments for longer or shorter nights. There is nothing more frustrating than seeing the property all lit up at 5pm and it only gets dark at 7pm or even worse; the lights turn on at 7pm and it has been dark since 5pm.

Remember: the safety of your residents is at its greatest risk when it is dark and the lights are out.

Bio: If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Jerry L’Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988.

Frank Alvarez is the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance. com For more info please go to: www.BuffaloMaintenance.com

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Rental Housing Journal Colorado is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in Investing & Real Estate Investor Quarterly

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Market Overview

...continued from page 1

od. Second quarter gains declined from 1Q’s equal 16 -year 16,800-job high, but July’s 10,200-job blowout (the largest one-month total in the 27-year series by 2,200 jobs) put Denver back on track in 2016 to approach a 50,000-job net again for a third consecutive year.

The RED Research DEN payroll model is little changed from 1Q, relying on the interplay between the rate change of US job growth (+) and nominal GDP growth (-), and metro personal income growth (+) as independent variables (Adjusted R2=98.5%, S.E.=0.3%). Our base GDP forecast is considerably more optimistic for 2Q17-2Q18, however, foreseeing 2.4% - 2.9% annual growth rates. Denver job creation should accelerate accordingly, adding a projected 115,000 total jobs during CY17 and CY18. Slower growth will follow, but no recession is yet in sight.

Occupancy Rate Summary Occupancy Rate (Reis) 95.1% RED 50 Rank 29th Annual Chg. (Reis) -0.4% RCR YE16 Forecast 94.6% RCR YE17 Forecast 94.6% RCR YE18 Forecast 94.6% RCR YE19 Forecast 93.9% RCR YE20 Forecast 93.7%

2Q16 Absorption and Occupancy Rate Trends Reis report that apartment demand was relatively weak for the second consecutive quarter as tenants leased a net of 562 vacant units, down –63% from 2Q15’s 1,538. This was the second fewest units absorbed in a spring quarter since 2009. Inventory growth also slowed, however, limiting the impact on market occupancy. Average occupancy declined only -10 basis points sequentially (-40 bps year-on-year) to 95.1%, maintaining DEN in RED 50 29th position.

Axiometrics surveys of stabilized same-store properties recorded a 94.7% average rate, down –110 bps y-o-y. Occupancy was seasonally stronger, however, as the metric increased 70 bps quarter-to-quarter, surpassing 2015’s comparable 50 bps advance. Class-C (95.7%) posted the strongest results, rising 160 bps sequentially. Classes- B and –A followed on 94.6% and 93.9%, respectively.

The RCR demand model remains largely the same, driven primarily by supply (+) and home price appreciation(t-2) (-) variables and to a lesser degree the rate of change of metro employment growth. Employment and supply promise to provide strong demand support: we expect tenants to absorb about 17,000 units by 4Q18. But supply is likely to exceed demand by 10% to 15%, with negative consequences for occupancy. RCR estimate that DEN occupancy will fall about –70 bps to 94.6% by YE2018.

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

$1,072 4.8% 11th 4.4% 5.9% 6.4% 5.2% 4.9%

2Q16 Effective Rent Trends Rent trends decelerated again in 2Q16, according to Reis, as average effective rent advanced only $7 (0.7%) sequentially, down from $21 (2.1%) in the comparable period of 2015. Expressed on a year-on-year basis, rent increased 4.8%, materially lower than 2Q’s 6.3% metric. Indeed, the y-o-y comparison was the lowest recorded in three years.

Axiometrics same-store stabilized property comparisons recorded comparable results. This sample unit-weighted mean effective rent increase was 5.1% during 2Q16, on par with the prior quarter but considerably slower than the 12.2% surge posted in the year-earlier period. Class-C continued to lead, rising 7.7% y-o-y, compared to 4.8% and 3.2% for classes-B and –A, respectively. Only class-A gains were faster in sequential quarters as class rents enjoyed a robust rebound from 1Q16’s weak results.

Our rent model is unchanged, achieving a 97.3% ARS (S.E.=0.6%) with sequential occupancy change (+), job growth (+) and home prices as independent variables. The model projects that rent growth will continue to decelerate moderately through the winter but catch fire again as the anticipated economic expansion in 2017-2018 gains traction. Rents are expected to rise 5.5% to 6.5% during this period. Over the course of the forecast rents are projected to increase at a 5.3% compound rare, RED 46 #3.

Trade & Return Summary $5mm+ / 80-unit+ Sales 23 Approximate Proceeds $1,153mm Average Cap Rate (FNM) 5.1% Average Price / Unit $223,323 Expected Total Return 8.2% RED 46 ETR Rank 3rd Risk-adjusted Index 4.91.

RED 46 RAI Rank 19th

2Q16 Property Markets and Total Returns Sales velocity continued at a brisk clip during the spring. Investors acquired a total of 23 properties valued at $5 million or more for proceeds of more than $1.1 billion. Nevertheless, activity fell sharply from the record

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first quarter wherein a total of 45 properties exchanged hands for $2.8bn proceeds. The average price per unit was $223,323 in 2Q, up from 1Q’s $212,177 metric. Preliminary 3Q16 data suggest further velocity deceleration as only 15 assets were closed for $680mm through mid-September.

Contra most high-cost markets buyers focused largely on recent construction urban infill properties. Cap rates for class-B+ or better infill assets remained in the low– to mid- 4% region with some investors willing to purchase lower occupancy properties at yields in the 2.5%-to-3.5% range. 1980s vintage value-adds exchanged hands in the mid-5% area and class-Cs traded from 5.75% to 6.5% yields.

Using a 4.75% purchase cap rate proxy; 5.9% terminal cap rate; and model derived occupancy and rent point estimates, we calculate that an investor would expect to earn a 8.2% unlevered total annual return on a five-year hold.

This ranks 3rd highest among the RED 46, but is down from 8.4% and 1st in 1Q16. The risk-adjusted index also is down moderately, dipping to 19th rank among the peer group from 9th in our first quarter run.

By Daniel J Hogan

Director of Research djhogan@redcapitalgroup.com 614-857-1416 Office 1-800-837-5100 Toll Free

continued on page 6

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Rental Housing Journal Colorado · October 2016

Rental Housing Journal Colorado

8 Ways to Profit ...continued from page 1 1. Strong tenant screening standards Leasing to quality tenants is the best way to maintain a successful investment. Not only should the tenant have a solid business plan that can operate in harmony with the rest of the tenants in the building, they should have some business experience, be well capitalized and have good credit.

If they have weak credit it makes sense to require a co-signor or guarantor on the lease. The guarantor should be responsible for paying the rent during the full term of the lease. After the end of the initial term, you may consider letting the co-signor/guarantor off of the hook if you are confident with the business model and the rents have consistently come in on time.

Even if you have the benefit of a very successful business interested in your space, it is equally important to make sure that the lease contains language that discusses what happens if the tenant sells the business or a portion of the business. For example, if the owner of the business sells all or part of the business to a new president, this is a significant change in responsibility and you may want to include language that specifies that any new business owner be a party to the existing lease.

2. Clear definition of space being rented The Building Owners and Managers Association (BOMA) discovered years ago that negotiations are easier when both tenants and landlords use the same measurements to establish what is being rented.

In today’s world rent is not just rent for the space being leased, but also includes parking bill backs, signage rental, storage space rental and overage charges for the extra use of utilities after hours (for office buildings). It is important to take all of these things into account.

Every lease should include a drawing, usually attached as an exhibit. This drawing typically spells out the total square footage being leased. Unfortunately, not all landlords have accurate space measurements available for every space they own. BOMA has drafted up standards for all building types to use as reference. These standards are generally accepted. You can find them here: http://www.boma.org/standards/Pages/ default.aspx.

Most importantly, one needs to establish the rentable square footage. The rentable square footage is typically more than the usable square footage.

This is because many buildings have common spaces that tenants and their visitors use, such as restrooms, elevators, hallways, janitorial closets, electrical/phone communications rooms, and generator spaces. These areas are loaded into the rentable square footage.

This additional percentage is called the load factor. Additionally, leases need to define the percentage of a building that is used, and if necessary, the percentage of a campus in a multi-building complex. A well-organized landlord will

have a current and accurate schedule of rentable and usable square footages and space that is added into the load factor. Ignoring the shared area that the landlord has to maintain is a boon for a tenant and a loss for a landlord.

For example, if an 11,000 square foot building has a useable square footage of 10,000 square feet and has a 10 % load factor, that 1,000 square feet needs to be added to the lease for a total rentable square footage of 11,000 to take into account all of the square footage the tenant is using.

3. Clear definition of what the rent includes Landlords often leave money on the table due to sloppy or capitated leases.

Leases need to clearly define base rent, rent commencement dates, and who pays for operating expenses. In cases of tenant improvement construction, the lease should address what happens if there is a delay with the construction.

Delays are often caused by contractors not showing up, materials not being available and permits not being released by government authorities.

4. Clear definition of who covers which expenses Successful leases also include a clear definition of which party pays for what expense. The following is a list of potential expenses to consider: 5. Detail on the penalties for infractions and non-compliance Landlords need to ensure their leases include penalties for late rents as well as penalties for non-compliance with other lease terms. If a tenant stays over the expiration of their lease term, penalties of 150 – 200% of the rent is typically charged. This may sound onerous but landlords need strong tools to help negotiate future rents when leases expire and need to be extended. It is expensive to move tenants in and out. Such expenses include brokerage commissions, tenant improvements and attorney fees. The time lost without revenue compounds the costs to building owners. Holdover penalties are preferable to default clauses. Default clauses in the end will force a tenant out of a building, while holdover costs are more likely to be used to negotiate a ‘peaceful’ settlement and a lease renewal.

continued on page 7

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Rental Housing Journal Colorado · October 2016

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Rental Housing Journal Colorado

Market Overview

...continued from page 4

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.

6

Rental Housing Journal Colorado ¡ October 2016

Rental Housing Journal Colorado

Preparing Your Furnace

...continued from page 1

the flow of warm air can be hindered, which means that the heating system will work harder to keep areas warm and comfortable. If this happens for extended periods of times, the system could break down. Make sure the furnace filters are checked on a routine basis to ensure they are clean and they are replaced on a regular basis as needed.

Tip #2: Clean the inside of the furnace.

The inside of the furnace, often at the base of the heater, is where dust and other debris will start accumulating.

You should consistently make sure this area is clean through routine maintenance of your heating system. Once it’s clean, it will function efficiently and will be less prone to breaking down in the future.

Tip #3: Keep vents clear of obstruction.

Obstructing furnace vents could cause your whole system to not work effectively and could cause it to break down so make sure vents are clear of furniture like couches or bookcases.

While you’re looking at the vents, be sure to open them up and clean the insides so they are free of dust or other debris that may cause clogging or potential break down.

Tip #4: Get a professional tune-up.

Hiring a professional heating and cooling company to complete an annual maintenance of the heating system is a great investment and one that should be done at the turn of the season. An annual maintenance will ensure the furnace is in proper working conditioning and the HVAC technician can identify potential problems that are unseen that could cause expensive repairs down the road.

Rental properties require a little bit of attention to detail during the bitter cold of winter and taking the extra time to do that will keep your tenants comfortable and allows for the heating system to stay in good working order so you don’t have to plan for any unexpected repairs or premature replacement of the system.

Written by Brooke Strickland, freelance writer for Specialty Heating & Cooling. Specialty Heating & Cooling is a full service heating and cooling company in Tigard, OR

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Rental Housing Journal Colorado · October 2016

8 Ways to Profit

...continued from page 5

6. Don’t forget rent increases Once the owner and the tenant have agreed on a lease it makes sense to plan for the future. Costs of operating properties increase every year and landlords will want to recapture these operating increases.

It is not unusual for a Landlord to bill the tenant for additional costs outside of the base rent. Annual tax and insurance increases (over base year,) as well as increases in the cost of building operations should be passed through as well.

Often a landlord will also have negotiated an increase in the base rent either as an annual increase, or through the use of another mechanism, such as operating cost increase adjustments, CPI increases or through the use of a percentage rent clause.

Additionally, if the tenant is happy and pays on time, the landlord will want to keep them at the property for longer than the initial term of the lease and will want to pre-negotiate a renewal into their lease. This is extremely beneficial to a landlord.

7. Optimize the lease terms As a landlord tries to estimate their opportunity cost for each tenant they need to calculate the cost of free rent, tenant improvements, leasing fees, vacancy, early out clauses, go dark clauses, and cancellation clauses tied to the success of other tenants. Landlords must carefully decide how to balance their needs against the tenant’s needs. This has a lot to do with the rental cycles.

Whether signing during a landlord’s market or a tenant’s market, landlords

need to optimize their lease to their benefit while still keeping or obtaining the tenant.

8. Keep the property attractive to tenants Even the most well written lease will fail to obtain or retain a tenant if the landlord is not committed to the physical condition of their building.

A landlord must continually improve the building to attract or satisfy quality tenants. Not updating or upgrading a building or its systems (on the inside and the outside,) is a prescription for lower rent and an excuse for a tenant to move out. Taking tenants for granted is a dangerous business. Even with high moving costs, tenants will move if the landlord does not take care of their space.

A thorough lease should protect the business interests of both parties; it should clarify expectations and protect the integrity of the property. It should also allow for all contingencies to give both parties confidence in the success of the relationship. Landlords looking to maximize the income of a building must pay attention to the lease clause details and their obligation to take care of their tenants. That is the only way to ensure that the building continues to grow wealth.

7

Rental Housing Journal Colorado

Increased Apartment Construction line, with the majority of those powered by Google.

Renters trust Google and other search engines and operators that make sure their property website has a standalone presence in the top positions for the keywords Bay Area renters are searching, increases not only the property’s trust but the asset value as a whole. A property that is tops in Google has millions of dollars more in blue-sky value that can be cashed in at the time of a sale. Communities looking to take advantage of these facts and gain highly qualified visitors to their website, need to rank as high as possible on Google and other search engines for the most searched keywords.

In the San Francisco market, over 8,100 local people search the keyword “San Francisco apartments” per month.

Even if a property only received a visit to their website from 10% of them that is 810 hot qualified visitors per month.

If only 5% of the 810 could afford the highest possible rent, that is 40 people who you want to talk to before they call anyone else. If you close 10% of those, you just leased 4 units at the highest possible rent. Now if you also take a hyper-focused keyword like “luxury apartments San Francisco” with 320 people locally searching per month and assume 10% of those contact you, you now have 32 even more qualified leads.

If you close 10%, you just signed another 3 units. In only 2 keyword examples the property leased 7 units at the highest possible rate and MultiFamily Traffic ranks each client property website for 100’s of keywords with a focus on the 15 most searched.

Getting ranked on Google is game-changing for San Francisco communities that previously did not appear anywhere on search engines for any of the most searched terms before. This is why many operators in San Francisco are employing SEO and Google AdWords campaigns before anything else; they protect rent margins and 100% occupancy.

San Francisco is expecting to add over 9,000 new apartments to its market before the year is up with over 8% of these new units are with Management companies already working with MultiFamily Traffic. To be competitive in the City by the Bay you should have a plan on how to capture the most lucrative of renters before the property even enters lease up.

The fastest way to get units leased at a premium rent rate is to put your website in front of the hottest renters as they search Google for luxury (highrent) apartments in San Francisco. The theory is simple, if you can put your community right in front of the 5% of renters who will pay the highest rent, you don’t have to worry about slowing down your increases to cater to the 95% that won’t pay that price. If you want to lease your units at the highest possible rent, it’s all about presenting to the best target demographic.

By developing customized SEO and Google AdWords campaigns the winners in the San Francisco rent war are seeing ROI’s that cover the additional marketing expense in the rent rate difference of in many cases, only one unit.

The US apartment market is extremely competitive and a property’s online presence is more important in San 8

...continued from page 2

Francisco than possibly any other city in the country, but the news is still good.

In every case, in every market SEO can make a good market “great” for the top communities on Google. In many markets, a 1 or 2 percent increase in rents year over year is good, what we are seeing in San Francisco is unheard of, but it’s an asset managers job to maximize the opportunity presently in San Francisco and other Bay Area cities.

As far as the developments in Oakland, SEO is no less important. Rents may be lower but so is the cost of land and development so the importance on capturing the highest margin your property can demand is just as important.

Another hot market for apartment SEO is Sacramento because of its short supply for units and solid job growth the market, Sacramento has seen an 11 percent increase in rents over the past year. Much like San Francisco, if a Sactown property wants the highest end of that 11% average they need to find a way to have their property stand alone in Google search results so they are called first by the big money renters.

No matter what Bay Area city your assets are in, if you only use ILS services that list your property on an aggregated page next to hundreds of other competing properties, you are essentially placing your property in a “bidding war” on a list of commoditized list and you had better offer the most features to command your higher rent. But, if you can have renters calling your community before anyone else, you can fill your units and let everyone else slow their rent increases as they fight over the tire kickers.

The first step is knowing what the top searched keywords are in your city and where your website ranks for them.

Multifamily Traffic has a dedicated research team that performs this as a free service for anyone. You can call that team directly and have your research back free of charge in less than 1 hour in most cases. They are available at 888-683-5885.

The next step is looking for a partner that can drive renters to you without asking you to make changes to your website or overcharging you for the work they do. There are many SEO providers that charge thousands per month for a mixed bag of results. You want to work with a firm that understands the industry and can guarantee results for a price you can fit in your budget.

Once you get your property to the top of the search results you will hear the results in the form of hundreds of calls to the leasing office. Make sure your staff is ready to follow up quickly. If you wait to set an appointment the renter is likely to go back to square one and look at an ILS placing both you and themselves right back in the “cattle call”.

About the author: Matt Easton is EVP of MultiFamily Traffic the leading apartment SEO and digital marketing provider. MultiFamily Traffic works with 500 communities across the U.S resulting in thousands of leases signed every day. Matt can be reached at 303-803-7372 or www.MultiFamilyTraffic.com

Rental Housing Journal Colorado · October 2016