Metro Rental Housing Journal August 2015 by Professional Publishing, Inc

Rental Housing Journal Metro 3. U.S. Homeownership Rate Falls to the Lowest Level Since the 1960s 4. Property Managers Face Housing Market Conundrum 6. "The First Step and Then the Next" 8. 5 Ways to Improve Resident Relations – A Crash Course 9. Membership Has Its Privileges

August 2015 12. What Landlords Need to Know About Bed Bugs 14. Hoarding As a Fair Housing Issue: Beyond Reality TV 15. Owning a Rental Property Requires Hard Work, Patience, and Planning 16. Ask the Secret Shopper

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17. Why Work-Life Balance is the Wrong Idea 18. Dear Maintenace Men 19. Changes to the Treatment of Depreciation Effective with Your 2014 Tax Return 20. To Social Media Relevance

PORTLAND/VANCOUVER

Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association

Today’s Online Renter

Flipping Edges Out Renting As The Preferred Investment Strategy For the Third Consecutive Quarter According to Auction.com Real Estate Investor Activity Report™ Price appreciation and inventory constraints continue to dictate investor strategy uction.com, LLC, the nation's leading online real estate marketplace, today announced the findings from its Second Quarter 2015 Real Estate Investor Activity Report™, a nationwide survey of real estate investors. Survey data collected from investors bidding on properties online and at live events across the country reveals that flipping is still going strong, edging out the hold-to-rent strategy for the third consecutive quarter – a consistent trend since Auction.com began tracking investor intent. This research provides insight into real estate investment trends on both a national and regional level. "Rounding out the first half of 2015, most of the country and most investor segments performed in a manner very consistent with what we've been seeing for about a year," said Auction.com Executive Vice President Rick Sharga. "We're seeing two major trends that are driving these numbers. First, we're seeing a return of the 'mom and pop' investor in the single family rental space – smaller investors with an intimate knowledge of their local markets, who are willing to buy properties that deliver long-term returns based on monthly cashflow. Second, investors focusing more and more on flipping properties in regions where prices have rebounded from the 2008 crash and inventory of homes

continued on page 7 Professional Publishing, Inc., PO Box 6244 Beaverton, OR 97007

National Study Sheds Light on Changing Prospect Behaviors and Preferences By Doug Miller

e just conducted a 2015 revisit of our landmark 2011 “Today’s Online Renter” study. The study addressed questions about how today’s online prospects shop, what drives rental decisions, what impact reviews have, the importance of social media and more. Big picture, transparency and the basics are more important than ever. • Shopping, Rental Decisions, Brand, Trust • 60.1% of apartment shoppers used a smart phone or tablet in their search (26.3% in 2011) and 78.3% visited a property’s website before contacting the office. Therefore websites must utilize Responsive Website Designs (as of April 2015 Google boosts rankings for sites with RWD) and HTML5 coding (how Apple prod...continued on page 5

Pet Smart: What You Need to Know About Being Pet-Friendly After years of prohibiting companion animals, many apartment properties now welcome pets—and the residents and ancillary income they bring with them. By Kayla Devon, Les Shaver

fter prohibiting pets for so long, the apartment industry finally, begrudgingly, began accepting them over a decade ago. In a way, apartment owners were merely coming to terms with what had been a reality for a long time—furry creatures resided in their properties.

PRSRT STD US Postage PAID Portland, OR Permit #5460

In fact, Bobby Lee, president and COO of Los Angeles–based JRK Property Holdings, estimates that as many as 40% of his residents had been keeping pets in their units, even when they weren't allowed. But by eventually embracing animals, apartment companies found a way to attract residents rather than tune them out. And, in some cases,

they've found a way to make money, as well. But just saying you allow pets isn't enough. To be successful, apartment owners need to have a strategy—knowing the costs and benefits of allowing pets, what the popular amenities are, what types of pets to restrict, and the types of materials to use for a pet-resilient environment. ...continued on page 10

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Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

U.S. Homeownership Rate Falls to the Lowest Level Since the 1960s Kathleen M Howley The share of Americans who own their homes fell to the lowest level in almost five decades, extending a multiyear decline as families struggle to regain ground lost during the financial crisis and rentals gain favor. The U.S. homeownership rate was 63.4 percent in the second quarter, down from 63.7 percent in the previous three months, the Census Bureau reported Tuesday. It was lowest reading since 1967. Would-be homebuyers have been held back by stringent mortgage standards and wage growth that hasn’t kept up with surging home prices. The average household income in June was 4 percent below a record high set in early 2008, even as unemployment dropped to its pre-recession rate, according to Sentier Research LLC. “We’re still suffering the effects of the housing collapse and the financial crisis,” said Mark Vitner, senior economist with Wells Fargo Securities

in Charlotte, North Carolina. “We may have another percentage point to go before we see a bottom” in the homeownership rate, he said. Home values have jumped 34 percent since reaching a bottom in early 2012, making purchases more expensive for entry-level buyers. Prices in 20 U.S. cities climbed 4.9 percent in May from a year earlier, the S&P/ Case-Shiller Index showed Tuesday. Demand for rentals is growing, fueling a surge in multifamily construction and sending leasing costs soaring. The number of renter-occupied units increased by about 2 million in the second quarter from a year earlier, the Census Bureau report showed. The rental vacancy rate fell to 6.8 percent from 7.1 percent in the first quarter and 7.5 percent a year earlier. It was the lowest rate since the 1980s, according to the report. The median asking rent was a record $803 a month.

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Thank you to all of the wonderful sponsors and participants in the 2nd Annual “Really Fun” Golf Tournament Thank you to our generous sponsors at the Really Fun Golf Tournament making the it truly a Really Fun Tournament! Thank you to Mt. Hood Cleaners as our tournament sponsor and the famous Hot Dog hole. Additionally, the generous donation to our charity JOIN of $250. The tournament raised $650 though raffle prize money for JOIN. Raffle prize donations This years sponsors: Pacific Screening Interstate Roofing Alpha Impressions Lifetime Exteriors All Aspects Renovation BT Maintenance Real Estate Mold Solutions

NoAppFee.com I & E Construction Uptown Property Management Pacific Screening

Forensic Building GreenPointe Design Real Estate Mold Solutions Alliance Flooring Uptown Property Management Payne West Insurance I & E Construction Squires Electric Paul Davis Restoration

Thank you to the Really Fun Golf Tournament Committee for all of their hard work! Special Thank you to AJ Sheppard & Liz Soucie of Uptown Property Management and Lynn Whitney of Real Estate Mold Solutions. Matt Korshoj Paul Davis Restoration of Greater Portland, Brennan Taylor BT Maintenance & Katie Poole Hussa Acorn Property Management & Trina Latshaw Squires Electric.

Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

Property Managers Face Housing Market Conundrum Recent reports of a robust recovery in the construction and sales of single-family homes are eclipsed by stories of a boom in higher-density, multifamily complexes. Even publicly traded homebuilders are seeing their share prices soar to heights last seen well before the Crash of 2008. D.R. Horton (DHI), the largest publicly-traded homebuilding company recently reported excellent 2nd quarter earnings. The company stated that it sold 22% more homes than in the same quarter a year ago. To put that in perspective, the company reported that total revenue grew by 37% from the same period last year.

That in part was due to a 7% average increase in the price of its houses sold. The entire housing industry, including those companies that supply materials, are reporting acrossthe-board gains in revenues and earnings-per-share. The share price of the nation’s largest wood cabinet manufacturer is another good example. American Woodmark (AMWD) and its shareholders have watched its stock soar 62% so far in 2015. All these anecdotal accounts might give property managers the idea that the home-buying industry is in great health. But hat’s a notion

that’s contradicted by U.S. Government statistics. Home Ownership Levels Haven’t Taken Off but Quietly Crash-Landed If you guessed that the number of Americans who actually own or are buying a house is increasing, think again. You’d have to go back to 1967 to find a time when a lower percentage of Americans own a house. Yes, according to the U.S. Census Bureau the homeownership rate fell to 63.4% in the second quarter of 2015. The Census Bureau is measuring the percentage of occupied homes that are owned-occupied. That percentage peaked at 69.2% in

2004. Then it plunged in 2007 after the mortgage and housing fiasco. Since a picture paints a thousand words, look at the Bureau’s chart below to see what happened. Thanks to my colleagues at Casey Research we see an illustration of the shocking truth about the percentage of owner-occupied homes in America today.

...continued on page 19

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Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

Todays Online Renter ...continued from page 1 ucts read websites and permits for ideal viewing on smartphones, tablets, laptops). • The Top Five sources used changed since 2011 [chart], and review sites now a top source. Since 45.4% of shoppers now use review sites, it is critical to manage the resident experience and a property’s reputation. Apartment shopping sources ILS Apartment community or management company website Driving in desired neighborhoods Search engine Rating / review website Referrals Printed apartment guide Apartment community or management company social media Newspaper advertising

2015 Total 68.8% 66.5% 59.2% 50.5% 45.4% 42.4% 21.1% 11.6% 6.1%

• Prospects focus on basics: photos, floor plans, rents, specials, availability, and features / amenities. Reviews are also very important (4.18 on a five point importance scale) because they offer the transparency today’s consumer demands. • The top rated factor impacting rental decisions was viewing an actual apartment home available to lease; this has implications on the market ready process and raises questions about how much to invest in models (ranked #12). Consistent with importance of transparency and the resident experience, perceived quality customer service and unfiltered reviews were rated second and fifth, respectively.

What impacts rental decisions – Top Five [Five point impact scale]

2015 Total

Perception of quality customer service

4.24

Viewing the actual apartment I can lease

4.58

Ability to pay rent online if no convenience fee

4.18

Security, access control features Ratings/reviews of community

4.16 3.99

• 24.4% report rental decisions are impacted by the management company brand name; this means 75.6% of decisions are not impacted by brand name. Therefore communities must focus on service delivery and the resident experience as drive their online reputation. • 74.4% trust friends and family. At 67.7%, reviews had the second highest “trust” score; sites offering reviews rank high in Google searches so properties must focus on delivering a quality resident experience and leveraging this feedback online. Residents do not trust ads (second to last, 11.8%) or a property’s social media efforts (ranked last, 7.1%).

What sources do you trust?

2015 Total

Online ratings / reviews / comments

67.7%

Friends, family members or co-workers

74.4%

Company website

32.6%

Ads

11.8%

Social media

7.1%

• 49.7% do not trust websites where most or all reviews are positive. Because negative reviews are as important as positive ones, resist the temptation to cherry pick reviews to post on those sites that permit this. • Ratings and Reviews • 61% were willing to post positive reviews about their community, however only 16% have ever been asked by the property; and a majority reported being “very likely” to post comments or reviews online. This reveals an opportunity, however remember that offering incentives to post reviews violate Federal Trade Commission guidelines. • Residents have strong feelings about properties responding to reviews. 51.7% felt that the staff responding communicates they provide great customer service, and 48.9% felt this shows the staff cares about residents. Only 11.1% said they did not care if the staff responded. Lastly, a majority reported that the staff not responding created a negative impression of the community. Responding presents another marketing opportunity. • Social Media • Only 11% reported using social media a “source” when shopping, and social media earned a low 2.27 score on its impact on rental decisions (five point importance scale). Additionally, as noted earlier, residents do not trust social media as a shopping source. • Renters do not follow communities or management companies on most social media. While 20% reported following a community on Facebook, less than 3% reported fol-

lowing on Twitter, Instagram or Pinterest. Key Takeaway #1 - Transparency • Prospects feel empowered and want transparency so they can make informed decisions. They want to know what it’s really like to live at a community via unfiltered reviews, to tour actual vacant apartments they can lease, and they don’t trust marketing, ads or social media. Key Takeaway #2 - The Basics • Success continues to have its foundation in the basics. And the basics are more critical than ever due to their impact on satisfaction with the resident experience and a property’s online reputation.

Doug Miller is founder and president of SatisFacts Research. Prior to creating his own businesses in 1996, starting in the late 1980's Miller was Director of Marketing for several national and regional property management firms. Miller received his B.S.B.A from Washington University (St. Louis) and his M.B.A. from The American University. Doug can be contacted at DMiller@ SatisFacts.com.

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RENTAL HOUSING JOURNAL METRO President: John Sage • President Elect: Ron Garcia • Past President: Elizabeth Carpenter Secretary: Lynne Whitney • Treasurer: Elaine Elsea • Office Manager: Cari Pierce 10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821 info@rhaoregon.org • www.rhaoregon.org.

President’s Message:

hope that everyone is having an enjoyable and productive summer. Have you been spending time with the family, making memories? Here at RHA Oregon, we have been busy. It seems like there has been events going on weekly with opportunities to meet and talk with vendors and members of our organization. It is amazing to me the wealth of knowledge that is available when you attend events and get to know the members of RHA. Back on June 30th, we held a Happy Hour event at Uptown Market in Lake Oswego. If you weren’t there or haven’t been to their location before, be sure to go check them out. The food and bever-

ages were excellent. Then on July 15th at the RHA Oregon Office annex, we held the second annual, Starry Night event for JOIN. This is a fundraising event for JOIN to get a family off of the streets and into housing. Last year we were able to sponsor one family. There is a silent auction, raffle and oral auction of donated items from members and vendors. It is heartwarming to see the generosity and giving spirit of all those involved. A big “Thank You”, goes out to the volunteers that worked to set up this event and those that worked to make the event the big success that it was. We have already started planning for next

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year’s third annual Starry night. So start looking for updates and announcements coming in the next year. In August is the annual RHA Oregon Picnic at Oaks Park on Wednesday August 12th starting at 2:00 pm. Since long before I was a member RHA Oregon has been holding this event. This is another great opportunity to meet and talk with other members and vendors. There is of course the picnic dinner, and rides for the kids. There will be vendor tables, so that you can get to know some of the vendors and how they can help you. Then to round out the event, there is Bingo at the end of the night. So be sure to bring an age appropriate prize to donate for the person playing. Your board of director’s will be there serving the dinner, running the registration tables, and of course calling the numbers for Bingo. I look forward to seeing all of you there and getting to know you better. Who knows I may be the one calling the Bingo numbers again this year!! With the latest legislative session for the Oregon legislature having recently adjourned in late July. I would be remiss if I didn’t mention

John Sage RHAOregon President

our lobbyist Cindy Robert. She spends countless hours attending meetings, tracking bills, and talking with legislators on behalf of RHA Oregon. Without her efforts we would be like a voice in the wilderness. Remember, even if your units are full and you are not currently looking for rental forms or advice, RHA Oregon is working to protect your rights as a property owner. Your membership pays to have people like Cindy Robert working for RHA Oregon. By the way, your V.P. Phil Owen, also spends a lot of volunteer time in meetings as a member of the landlord tenant coalition and other duties with RHA Oregon. Thank you Cindy and Phil!!! Keep checking our website and your email for upcoming events. Have a great and wonderful rest of your summer! Sincerely, John Sage, President RHAOregon, Stegmann Insurance Agency Inc.

Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO Q2 2015 Live Event Investor Data: Intent of All Investors Surveyed State Flip Rent Undecided Arizona 71.3% 28.7% 0% California 71.9% 28.1% 0% Georgia 56.6% 43.4% 0% Idaho 77.5% 22.5% 0% North Carolina 66.7% 33.3% 0% Nevada 70.4% 29.6% 0% Tennessee 54.8% 45.2% 0% Texas 54.4% 45.6% 0% Washington 65.5% 34.5% 0% Nationwide 61.3% 38.7% 0%

Flipping ...continued from page 1 for sale remains scarce – an almost perfect scenario for investors looking for a short-term profit." Although Auction.com's findings for the second quarter reveal a propensity toward flipping among investors overall, investor intent varies considerably by the type of auction (live event versus online auction) and investor profile. Survey

respondents who indicated that they were making a one-time purchase clearly preferred a hold-to-rent strategy, while respondents identifying themselves as full-time "real estate investors" and those indicating that they were working on behalf of another investor favored flipping.

Q2 2015 National Findings: Investor Intent Investor Profile Flip One-time purchase 26.5% Real Estate Investor 55.6% Working on Behalf of Another 63.7% Investor TOTAL 53% Investors bidding at live events appear to be far more likely to flip the properties they purchase based on survey responses collected in the second quarter of 2015, with respondents indicating a preference toward

Rent 72.2% 43.3% 34.6%

Undecided 1.2% 1.1% 1.6%

45.8%

1.2%

flipping over holding to rent in every state where Auction.com conducted live events. Of the states represented in the survey, the widest margins occurred in the Southwest and Midwest.

Conversely, responses given at online auctions in the second quarter of 2015 show that investors bidding online generally intend to hold the properties they purchase. This was true in every region except the Northeast, where the pendulum has swung toward flipping. As was

noted regarding a similar (though temporary) shift in the West earlier in the quarter, this is likely due to the region's inventory constraints and higher purchase prices negatively impacting rental property returns.

Q2 2015 Online Investor Data: Intent of All Investors Surveyed Region Flip Rent Undecided West 42.9% 55.3% 1.8% Midwest 43.9% 53.2% 2.9% South 43.8% 54.3% 1.9% Northeast 51% 47.2% 1.7% Nationwide 44.6% 53% 2.4% Less active investors (those indicating that they purchase one or fewer properties per year) demonstrated a strong preference for renting properties, while flipping was prevalent among investors who purchase multiple properties per year. This preference appears to be grow-

ing among investors purchasing more than 50 properties per year: nearly 62 percent of respondents in this group favored flipping in the second quarter – up from 56.3 percent in Q4 2014 and 53.6 percent in Q1 2015.

Q2 2015 Investor Data: Intent By Purchase Profile Purchase Profile Flip Rent 0-1 Property/Year 38.2% 60.2% 2-49 Properties/Year 59.8% 39.2% 50+ Properties/Year 61.9% 38.1%

Undecided 1.6% 1% 0%

About Auction.com: Auction.com, LLC, is the nation's leading online real estate marketplace. Founded in 2007, the company has sold over $30 billion in residential and commercial real estate assets. Auction.com has over 900 employees and headquarters in Irvine and Silicon Valley, California as well as offices in Austin and Plano, Texas, Atlanta, Denver, New York and Miami. Visit www.auction.com for more information. SOURCE Auction.com, LLC

Robinson Financial Group Colonial Life

“Making Benefit Count” Office: 503.557.4997 Fax: 503.557.1244 Rental Housing Journal Metro • August 2015

21780 Willamette Dr. Ste. B, West Linn, OR 97068 7

RENTAL HOUSING JOURNAL METRO

5 Ways to Improve Resident Relations – A Crash Course By Aimee Miller

re you set up for success in 2016? Join 2,500 real estate industry leaders Aug. 4-7, 2015, at Inman Connect in San Francisco. Get Connected with the people and ideas that will inspire you and take your business to new heights. Register today and save $100 with code Readers. Takeaways: • Maintaining resident relations is a key factor to successful property management. • Once you establish the reasons why individuals might leave, you can take a proactive approach to improving your resident relations and avoiding a potential issue. • Keeping long-term residents cuts your costs and increases your profitability — you don’t have to spend time and put resources into marketing open units. Maintaining resident relations is a key factor to successful property management; but, it can be hard keeping clients happy when you are managing multiple properties and juggling various responsibilities. How do you keep track of one individual’s needs in a sea of many? How do you improve tenant relations so that your renewal rates can

continue to climb? Before your head starts spinning with countless questions, take a moment to read through our fivestep crash course to improving resident relations. 1. Know why a resident might leave There are several reasons why residents decide to vacate a building. Perhaps the rent was too high? Maybe they had a bad experience with new neighbors — or worse, the property manager? Or maybe they simply decided that it was time to live in an upgraded building. No matter the reason, step one of improving relations requires you to get to know your residents. Learn what makes them tick and why they might leave an apartment or home. Once you establish the reasons why individuals might leave, you can take a proactive approach to improving your resident relations and avoiding a potential issue. Tip: Include a survey upon lease signing, and then conduct an annual survey of your residents to gauge their happiness with the property. 2. Make customer service the crème de la crème As a property manager, it is your job always to be responsive, courteous, attentive and professional when

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handling any resident requests. The simplest and most reliable way to improve relations is to offer the best customer service. To this end, you should always respond to an issue as efficiently and effectively as possible. It is easy for people to become too frustrated if their issues aren’t resolved in a timely fashion. Once a resident has become frustrated, it is much harder to build a positive experience back. Tip: There are technology solutions you can use to streamline response time, as well as convenient online services that can give a huge boost to resident happiness, including features such as online rent payments and maintenance request portals. 3. Flaunt those amenities Amenities, or lack thereof, are one of the top reasons that a resident moves on to a new building. Make sure that your residents are aware and taking advantage of all of the benefits of living at your specific property. From the free Wi-Fi to the neighborhood’s new plans for a live music venue, make sure that your tenants are up to date on all of the benefits that come with calling your building home. Tip: Extend this helpfulness outside the property proper — use a blog to share information about the immediate community, surrounding area and fun events nearby that your residents might enjoy. A community group on Facebook is also an excellent way to build awareness and communication. Tip: Extend this helpfulness outside the property proper — use a blog to share information about the immediate community, surrounding area and fun events nearby that your residents might enjoy. A community group on Facebook is also an excellent way to build awareness and communication. 5. Respect the privacy of your residents On the off chance that you need

to access a unit to conduct repairs, make sure that you respect their privacy. Find out what time is best to conduct the repair and give plenty of notice — it can go a long way toward making the resident feel comfortable having you in their space. Remember it is their home, and they might have abnormal working or sleeping hours, as well as visiting family. Do your best to limit the amount of time that you have to spend in a rental unit while conducting seasonal maintenance or cosmetic repairs. In this vein, make sure that you conduct annual cosmetic improvements on the building to enhance the aesthetic appeal of the property. Make sure that you offer a fresh coat of paint or a carpet cleaning for longterm residents. Tip: The modern resident expects instant notifications on their mobile devices. Gone are the days of posting paper notices; set up text messages and email alerts to get relevant information in front of your renters faster. Keeping long-term residents cuts your costs and increases your profitability — you don’t have to spend time and put resources into marketing open units. With these five steps in mind, you will be well on your way to improving your current and future resident relations and securing some long-term residents. Aimee Miller is the vice president of marketing at AppFolio, providers of Web-based property management software.

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www.re ntalhous ingjournal.com Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO 16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 503-213-1281, 503-213-1288 Fax www.multifamilynw.org

Scott Arena President, Multifamily Northwest

Membership Has Its Privileges August 2015

or a few days in June I had the privilege of attending the NAA (National Apartment Association) Education Conference and Exposition. This is a four-day annual multifamily industry event held in different locations each year throughout the United States, drawing participants from around the world! Seven different countries represented in 2015! This year the conference was located in Las Vegas. And it was extremely hot. The “115 degrees” kind of hot! Fortunately, the resort hotels in that city have ex-

cellent air conditioning to keep you inside, comfortable, and, of course, “generating revenue” – also referred to as gambling. The conference was a spectacular event and drew record attendance of more than 9,000 industry professionals. Education sessions totaled 65 courses offering valuable learning opportunities for those seeking leadership skills, information technology, ROI enhancement, marketing, social media strategies, management communication, HR, and much more. As with past conferences, it was an amazing event providing excellent opportunity to network with fellow professionals, learn about industry advancements, and view new indus-

Multifamily NW

Upcoming Educational Opportunities 8/4/2015

8/20/2015

Fair Housing for Maintenance

9th Annual SWV Charity Golf Tournament

8/5/2015

Landlord Study Hall: Marijuana Regulations, from Medicinal to Recreational

8/25/2015

EPA Lead-Based Paint Renovation Certification 8-Hour

8/6/2015

8/26/2015

Forms and Notices 101 (Vancouver)

Strengthening Frontline Skills for Maintenance

8/11/2015

8/27/2015

Maintenance for New Hires

PDX Membership BBQ

8/14/2015

9/1/2015

It's the Law Lunchtime Series: Time to Part Ways: Terminating the Tenancy

NALP: Why Your Competition Matters

8/18/2015

CAM: Management of Residential Issues

try products via the largest trade show (870 exhibitors) the multifamily world has to offer. For this month’s article I am focusing upon one of the key benefits of membership with Multifamily NW: affiliation with the National Apartment Association (NAA). As an entity or individual, joining the NAA is only possible through membership with the local rental housing affiliate. Along with the multitude of benefits offered by MFNW such as education, networking, board involvement, government affairs, charity events, tradeshows and more, it is important that members understand how the connection with NAA enhances this platform – offering even further opportunities of professional development and industry support. So what is the NAA organization and how did it come into existence? The entity was established over 75 years ago. In 1939, the mission of the association was defined as serving the interests of multifamily property owners, managers, developers and industry suppliers to promote and maintain the highest levels of professionalism. Prior to this time, the property management industry

was struggling to gain a sense of professionalism, with many owners and landlords operating without uniformity and any established rules of conduct or legal navigation. A primary goal of the association was, and still remains, maintaining the highest level of professionalism in the multifamily housing industry to best serve the rental housing needs of the public. The NAA represents all sectors of the multifamily housing industry: Property managers, apartment owners, management executives, builders, developers, investors, leasing professionals, maintenance techs, suppliers and related industry professionals. NAA seeks to support and further its mission through a variety of offerings to the industry professional. At the forefront is education. As any multifamily industry professional knows, learning, understanding and keeping current with our rapidly evolving world is critical to business survival and essential for success. NAA offers a variety of education, training and recruitment programs to attract, nurture and retain top-quality professionals. ...continued on page 13

9/3/2015

CAM: Marketing 8/18/2015

9/8/2015

MWV Membership BBQ

CAM: Property Maintenance for Managers

8/19/2015

New Hire Training: Introduction to the Industry

9/9/2015

CAM: Human Resource Management Part I

Form of the Month

This form as become a popular addition to the typical move-in package of forms tenants sign at the beginning of a tenancy. It sets the expectations that tenants will promptly report any pest issues and agree to follow all instructions and treatment protocol. With this form signed, tenant noncompliance during pest treatments is a violation of the rental agreement. It also discloses dangers of introducing uninspected second hand furniture as well as acknowledging that the rental was pest free at move-in.

Rental Housing Journal Metro • August 2015

PEST CONTROL ADDENDUM DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________

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UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________

It is our goal to maintain the highest quality of living environment for our residents. Owner/Agent has inspected the unit prior to lease and knows of no pest infestation. Residents have an important role in preventing and controlling pests. Good housekeeping will help control any problem, minimize any infestation, and limit its spread. Resident acknowledges that all furnishings and other personal property that will be moved into the unit are free from pests. Resident agrees to avoid and not bring in secondhand goods that have not been thoroughly inspected for the presence of pests. Resident agrees to promptly report any problems, specifically any signs of pests; and any related maintenance needs. Resident acknowledges that failure to timely report pest problems can substantially increase the kinds, number and costs of treatments. Owner/Agent may conduct extermination operations in the unit several times a year and as needed to prevent or treat for pest infestation. Owner/Agent will notify Resident in advance of extermination operations in the unit, and give Resident instructions for the preparation of the unit and safe conduct during and after treatment. Resident will be responsible to prepare the unit for extermination treatments in accordance with Owner/Agent’s or the exterminator’s instructions. Resident must request, in writing, extermination treatments in addition to those regularly provided by Owner/Agent. Resident agrees to follow the preparation guidelines required by Owner/Agent or the exterminator on the day of interior extermination treatments to ensure the safety and effectiveness of the extermination operation. If Resident is unprepared on the scheduled treatment date, Owner/Agent may charge Resident for the service call. Owner/Agent also reserves the right to charge Resident for necessary extermination services. Preparation guidelines may include but are not limited to the following: • Empty and clean all cabinets and drawers in kitchen and bathroom • Remove all miscellaneous items from floor, clean all closet floors, and remove all items from under beds and/or furniture, allowing as much floor as possible to be accessible to treatment • Remove pets from the areas to be treated and notify Owner/Agent of their placement • In most cases, all residents and pets must vacate the unit for 3-4 hours after service • Remove chain locks or other types of obstruction on day of service • Cover fish tanks and turn off their air pumps • Do not wipe cabinets after treatment Prior to extermination, Resident is solely responsible to notify Owner/Agent, in writing, of any anticipated health or safety concerns related to extermination and the use of pesticides. Resident agrees that violation of any of the terms of this addendum constitutes a material noncompliance with the Rental Agreement and is grounds for eviction and/or other legal action by Owner/Agent. Pest control protocol may change as new research developments occur. Resident acknowledges that Owner/Agent will not be responsible for damage to, or decontamination of, Resident’s personal property or for providing temporary accommodations due to Resident’s failure to follow the terms of this Addendum.

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RENTAL HOUSING JOURNAL METRO

Pet Smart ...continued from page 10 Multifamily Executive spent time exploring each of these issues. You can read our findings by clicking through the tabs above. Profit Point Steve F. Hallsey, president and CEO of AMLI Management Co., says his firm's initial intent behind allowing pets wasn't to create a profit center; it was to differentiate AMLI from its competitors. "The right way to think of it is the competitive advantage you have in having it and the competitive disadvantage you have by not having it," Hallsey says. "Do you pick up 100 or 200 basis points in occupancy? You probably do." Others see the same benefit—petfriendly amenities offer differentiation. "The primary reason we added [the dog park] is that it would be a tiebreaker for people who had dogs," JRK's Lee says. "If you're a dog lover and see a place for your dog to play in, it's that last impression that may drive the decision." But in some cases, apartment owners are finding that catering to pets can do more than just help attract residents: It can add to the bottom line, as well. Yes, dog spas, pet washes, and pet exercise equipment carry extra costs, but a simpler option, such as a grassy area with play equipment, costs less but still goes a long way. At most of its properties, JRK

includes a dog park. "It's a really low-cost amenity that can distinguish us from the competition," Lee says. While dog parks cost money, many times they cost less to produce than what they're replacing. "[Dog parks] took the place of other amenities that used to be more popular, like tennis courts," says Cristina Sullivan, executive vice president of operations at Gables Residential. "It wasn't an ‘add to.' It was an ‘instead of.' " Pet areas also may offer more flexibility than traditional amenities. "[They] allow you to be more creative," Sullivan says. "We put them in parking decks on roofs." In fact, urban high-rise product may be the most profitable place to offer a pet-friendly environment. In its high-rises, AMLI charges a nonrefundable pet deposit between $250 and $500, pet rent of $25 to $50, and a pet-floor premium of $25 to $35. That adds up, especially in a building with hardwood floors that can withstand the daily rigors of pet paws, poop, and pee. "The pet fees themselves are a nice source of income in ‘other income,' " Hallsey says. "You have an ability to charge very nice premiums in fees." But for other owners, especially those that aren't renting new, urban high-rises, the profits aren't as easily

enjoyed. In fact, in many cases, Lee says, JRK doesn't consistently charge pet fees across the board. "On a nonrefundable pet fee, we won't go above about a half month's rent," Lee says. "Some properties don't charge a fee. Some properties charge both [pet fees and pet deposits]." But even with a pet fee and pet deposits, covering the costs of replacing a carpet at each unit turn, much less the added maintenance required at a dog park, makes it tough to turn a profit, Lee says. Yet, JRK still adds dog parks, and Lee has found that they do offer an economic advantage. "Our guys never had issues charging the nonrefundable pet fee," Lee says. "But when someone would ask, ‘What am I paying pet rent for?' we'd have an answer." There's another reason to be careful with pet fees: Sullivan says Gables will charge pet deposits and fees, when possible, but is careful (as many other apartment owners we spoke with agreed) in the wake of the class action lawsuits in Boston in 2012 in which their tenants sued Archstone and Equity Residential over pet fees that violated Massachusetts Security Deposit Law. (The law prohibits landlords from charging any up-front fees except for first month's rent, last month's rent, a security deposit, and a lost-key fee.)

"We're very cautious," Sullivan says. "We don't have a blanket policy on fees and deposits. If it's gray, we lean on the side of ‘don't charge.' " Pet Amenities Pets are like family, and when it comes to keeping them happy and healthy, most owners will do just about anything for them, regardless of cost. In a 2014 survey on pet products and services, market research firm WSL found that 81% of respondents spent more or the same on their pets despite recent economic troubles. In a separate study, the American Pet Products Association, in its National Pet Owners Survey, found that pet owners spent $58 billion on their pets in 2014, up from $41 billion in 2007. That's why, to win over animallover residents, more properties have invested in amenities in the past 10 years that cater to a higher standard of living for pets. "We're always looking at every single building and what we can do to maximize people's enjoyment of their lifestyle," says Daria Salusbury, senior vice president of leasing at Related Cos. "We realized a long time ago that pets are people's extended family." Though Related Cos. has always been pet-friendly, the team has recently found success in providing ...continued on page 11

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Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

Pet Smart ...continued from page 11 more for their four-legged tenants. Related first built a dog grooming station in One Carnegie Hill in Manhattan. Salusbury says it was the most-used amenity in the entire building. With MiMA, also in Manhattan, Related went one step further by introducing Dog City, a dog spa that takes care of every need imaginable, from dog walking and doggie dates to geriatric care and nutrition plans. If going all-in on a dog spa or grooming stations isn't feasible, pet events are also fun ways to attract tenants. AvalonBay, for example, offers Doggie Paddle pool parties, Yappy Hours, and pet CPR classes to foster a sense of community among pet owners. We realized a long time ago that pets are people's extended family. But not everybody loves dogs, cautions Gables Residential's Sullivan. "We want to be careful where we put those amenities and how they're integrated into the community, because if you're not a dog lover, you don't want to be sitting at the pool [next to one]," she says. Material Gain Between paws, accidents, and strange smells, pets can do some real damage on traditional housing materials. The flip cards below detail what finishes to equip your petfriendly units with so they're more durable and cost less in rehab later

on. Poop Police While people love their dogs, they don't exactly love picking up their dog's poop. One study estimates roughly 40% of dog owners don't pick up after their pets. But dog poop isn't just a nuisance; it's hazardous. The EPA ranks dog waste as an environmental problem equal to toxic chemicals and oil spills. But companies like PooPrints and P.E.T. CSI are turning dog-waste management into an ancillary-income opportunity for property managers by catching the culprits with DNA testing. For an average cost of $39.95 at move-in to have a dog's cheek swabbed, property managers can keep the DNA on file and send out dog poop samples to catch residents who fail to clean up after their pets. When the results come back, properties charge a fine anywhere from $50 to $500. According to PooPrints CEO Tom Boyd, participating properties see a 90% reduction in dog waste in one month and 98% in six months. Property Policies It's never really the pets you have to worry about—it's the pet owners. Many properties have policies regarding breed and size restrictions that aim to eliminate large, aggressive dogs from the community. Common breed restrictions include Pit Bulls and Dalmatians, while typical size limits start at below 25

pounds and reach 75 pounds. Such restrictions, however, are outdated and based on information that has been proven untrue, says The Humane Society of the United States, which claims there isn't sufficient evidence that specific breeds or large dogs cause more harm than others. Ultimately, a dog's behavior depends on the training it receives— or doesn't receive—from its owner. Consequently, the Humane Society urges property managers to judge four-legged tenants on a case-bycase basis, determining if the dog has been spayed or neutered, if the owner can provide pet references, and if the dog has any training certifications. One of WC Smith's newest developments, The Shawmut, in Washington, D.C., allows any size and breed and simply requires the dog and owner to do an interview with the building manager. According to Holli Beckman, vice president of marketing and leasing operations at WC Smith, 70% of the building's residents own dogs, in all sizes and breeds, and no issues involving the pets have come up. "When you're trying to fill a 400unit building in a hyper-competitive market like D.C., you have to eliminate as many leasing obstacles and objections as possible," says Beckman. The leasing agreement language should also clarify how any inci-

dents involving barking, aggression, damage, and so on will be handled. Policies range from small fines to "three strikes, you're out." Property managers shouldn't forget about non–pet-loving renters either. AMLI has pet floors to separate pet people and non-pet people. Some buildings have even specified pet-friendly elevators so renters with allergies or an aversion to animals can choose a people-only car.

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What Landlords Need to Know About Bed Bugs By: Chuck Nelson, Owner of Dog Inspectors

eing a landlord is no easy task. It is riddled with responsibilities, from screening all tenants to taking care of maintenance repairs and keeping properties clean. Perhaps one of the most dreaded calls a landlord can get is, “I think we have bed bugs.” According to a 2015 Bugs Without Borders Survey, conducted by the National Pest Management Association and the University of Kentucky, the No. 1 place where pest professionals report finding bed bugs is apartments/condominiums. That’s why it’s important for landlords to be prepared and respond effectively. Be prepared As a landlord, you’re bound to run into a bed bug issue at some point in time. First, you must determine what laws apply to your state to ensure that you know what you are responsible for should you be faced with a tenant infestation.

Twenty-two states have laws addressing bed bugs in rental properties, institutional facilities and schools. In many states, landlords have a duty to maintain their buildings free of pests. Although laws in most of these states use very general terms for ‘pests,’ those in Florida and New York City specify that landlords must exterminate bed bugs. In some states, landlords only need to act if more than one unit is infected. Once you know what laws pertain to your state, develop a proactive plan to prevent bed bugs from entering your building. For example, schedule a pest control or K-9 inspection after each tenant leaves. You can also provide guidelines for new tenants on prevention tactics, such as not bringing in used furniture and carefully inspecting luggage after a trip. Respond Effectively When responding to a tenant’s complaint of an infestation, follow these guidelines: • Respond with empathy and understanding for the person mak-

ing the complaint. Bed bugs can cause fear and hysteria, so a little kindness and compassion can go a long way when speaking with the person who reported seeing bed bugs. • Promptly inspect the areas in question, especially beds and areas where luggage might be stored. Look for the bugs themselves, their shed skins or dark spots on sheets, bedding, walls, electric outlets, etc., as this may be an indication of bed bug fecal remains. • Contact your pest management company. The sooner the problem is eradicated, the better. Make certain that whoever you use to treat the problem has a great deal of experience in bed bug eradication and offers a warranty for their work.

Bed bugs are not something to mess around with, especially as a landlord. Nothing will cause residents to scatter and new tenants to avoid your property like the plague like a report of bed bugs. That’s why it is important to be proactive in preventing an infestation and in responding to a tenant’s report of bed bugs.

Chuck Nelson is the owner of Dog Inspectors, the first company in Tennessee to utilize trained, certified detection dogs to find bed bugs in commercial and residential buildings. For more information about the company's services, visit www.doginspectors.com.

• Schedule a follow-up pest control or K-9 inspection after the treatment has been completed to confirm all bed bugs have been eliminated. • Document all actions taken.

Order Your Free Recycling Resources Now! Making sure resident garbage and recycling is properly disposed of can be a big challenge. When it’s not, you’re left with a mess that costs time and money to fix. The good news: our free tools and resources help ensure your residents know how to handle recycling and garbage the right way. We can help you prevent mistakes before they happen at your multifamily property.

Look for these free resources in your mailbox or visit www.portlandoregon.gov/bps/multifamily Need more information? Multifamily Resource Line: 503-823-7224 Email: multifamily@portlandoregon.gov

Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

Membership ...continued from page 9 Understanding that the key to future success of our industry is dependent upon drawing and developing young talent today, NAA established the NAAEI (NAA Education Institute). For anyone seeking proficiency in specific area of multifamily housing management, NAAEI offers designation programs. Each course is annually reviewed and updated to ensure material is accurate and timely. Courses are delivered through the local affiliate such as MFNW minimizing travel challenges and saving time. Many are available as on-line courses. Current NAAEI designation programs include the following: • Certified Apartment Manager (CAM) • National Apartment Leasing Professional (NALP) • Certificate for Apartment Maintenance Technicians (CAMT) • Certified Apartment Supplier (CAS) • Certified Apartment Portfolio Supervisor (CAPS) • Independent Rental Owner Professional (IROP) In addition to these designations, NAA offers a course in advanced Fair Housing providing real-life situations that encourage critical thinking, careful decision making and method coaching to prevent expensive mistakes. In conjunction with

the National Affordable Housing Management Association, NAAEI offers the Specialist in Housing Credit Management (SHCM) and the Credential for Green Property Management (CGPM). Leadership training is offered through Leadership Lyceum, a yearlong curriculum to develop highly motivated, engaged and wellinformed volunteer leaders. This prepares candidates who are tracking to serve and chair NAA committees and task force committees and eventual NAA Board positions. Legislative decisions have major impact upon how our industry operates and how we protect our interests and those of our clients, employees and customers. Along with education programs, NAA also provides an excellent opportunity to become involved with local and national government affairs. The NAA Capitol Hill Conference is held annually in Washington D.C. In March, I joined MFNW Executive Director Deborah Imse to attend this event. The conference affords a rare opportunity to meet our local members of congress and directly advocate on behalf of our industry, focusing on state and federal issuesincluding such issues as tax reform, housing finance and immigration laws. Education sessions are provided in advance to help understand and gain knowledge for advocating prior to visiting congress and senate members. The NAA staff conducts

legislative tracking in all 50 states and provides members with expert insight into the industry’s most vital policy topics and trends. The association can also assist members on a local level by managing policy issue campaigns and developing advocacy strategies. I have touched upon just a few of the benefits offered to the multifamily professional through NAA. Speaking from my experience with both NAA and Multifamily NW, I would encourage any and every multifamily industry professional management, leasing, maintenance, supplier, owner or other affiliate –to seek out and fully explore ALL that

these associations can provide. The investment is well worth the effort and the potential dividends are immeasurable! To have such resources available provides an amazing opportunity to nurture and enhance professional and personal development. As an old ad campaign used to say: membership has its privileges. Take advantage of all that yours has to offer!

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Hoarding As a Fair Housing Issue: Beyond Reality TV

By Elizabeth Gray, FHCO Intake Specialist, Fair Housing Council of Oregon fire or ambulance crew can’t safely respond to a medical emergency in a single family home because the resident has belongings stacked up to the ceiling and blocking many windows or doors. A tenant living in an apartment faces eviction when he or she fails to pass a follow-up inspection after several warnings about lease violations related to items that create a tripping hazard, fire danger, or limit access to maintenance staff. The tenant then contacts their case manager in a panic. These are just two examples of

possible complications in housing settings that could impact housing providers. Hoarding is distinct from simply building a collection, which is usually displayed with pride, or letting a few days of dishes and laundry pile up when life gets busy. A person who has been diagnosed with hoarding has a disability under the Fair Housing Act1. Hoarding has been added to the DSM-5, the latest version of the American Psychiatric Association’s classification and diagnostic tool, and is now recognized as diagnosable condition independent of other mental health conditions. FHCO had received a few calls about potential hoarding situations by the time an invitation came in the spring of 2013 to participate in a col-

laborative Multnomah County conversation about the issue. Two graduate social work students serving as interns in the Multnomah County Office of Aging and Disability Services convened various agencies to meet for a “community assessment.” Attendees have included representatives of several nonprofit and for-profit housing providers, Aging and Disability and Adult Protective Services, Legal Aid, Animal Control, and Assessments and Tax. This Hoarding Task Force has continued to meet regularly, researching resources and bringing in experts to assist in coordinating services and developing best practices. The group is now beginning the process of staffing cases and developing a more

formal protocol. The good news is that there are new cognitive behavioral therapy models that can be successful in treating hoarding. Since hoarding disorder is a disability under the Fair Housing Act, these individuals have the right to request a reasonable accommodation (RA) from a housing provider. This might include providing an agreed upon length of time to bring in a professional cleaner / organizer to help clear pathways, reduce pile heights, clear materials in front of heating vents, etc. More will probably be needed than a single deep clean. There may be several steps to the RA request, prioritizing the most immediate safety needs and then allowing a more gradual timeline for reducing ...continued on page 18

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Owning a Rental Property Requires Hard Work, Patience, and Planning

f you’ve entertained thoughts about renting out your home, you may be asking yourself a few questions: “Is it worth hanging on to this property?” “How will I feel about strangers moving into my home?” “Will my tenants be responsible?” Owning a rental property can require hard work, patience, and planning. There’s the good to consider, like the potential to increase your income and build a steady cash flow. On the other hand, being a landlord may test your ability to deal with the unexpected, like emergency home repairs or unreliable renters. Before you hand over the keys, here’s what you can do to make the rental process go smoother. 1. Research the market Research the market in the neighborhood of your rental home to choose a rent amount that matches local rates while still helping you earn a profit. Consider the square footage and number of bedrooms and bathrooms. You might also take into consideration any additions to the property and the age of the home. Don’t forget to factor in costs like pest control, lawn maintenance, and occasional

home repairs. 2. Grace your home with curb appeal The first impression of your home’s curb appeal can mean everything, and depending on where you live and the time of year, your home may have taken a beating from the sun, wind, rain, or snow. To give your home a fresh look, rent a power washer, clean out the flower beds, and trim shrubs and low-hanging tree branches. Give your lawn a clean trim, your panels a new coat of paint, and your shutters a good cleaning. 3. Check to see if your prospective tenant is financially responsible A credit check can offer insights into your applicant’s payment history and gives you a good idea if they’ll likely be a good or bad credit risk. You may also want to consider hiring a reputable company that can perform a tenant screening on your potential occupants to find out if they’ve damaged previous rental properties or have a criminal record. You can also ask for referrals from past residences since this information won’t be included in a credit report. 4. Plan for financial emergencies

Renting comes with its own set of unexpected emergencies, from tenants suddenly vacating a property to their calling you on a Sunday about a broken water heater. These can be tough expenses to bear, and as a landlord, it will behoove you to set aside funds for such situations. 5. Get appropriate insurance coverage There’s always the possibility that your tenants or one of their guests

might have an accident or damage your property. You could also experience a loss of rental income due to an unforeseeable disaster. The proper insurance may cover these things along with legal fees if you end up taking your tenant to court. For some, becoming a landlord is all about on-the-job training. It can be a challenge, but in the end, renting out your extra space can help you reap financial benefits.

Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

sk the Secret Shopper

losing the sale is of utmost importance in turning prospective renters into new residents for your apartment community. It would be the equivalent of “setting the hook” for those who are trying to catch a fish. In each case, the prospect and the fish are trying to “get away” without committing to a home or a hook, while your job is trying to get both of them to BITE! Building owners and management companies want to know: What can we do to get our leasing staffs to close the sale? Even when we authorize incentives and rent specials to give them additional tools to work with, they still aren’t asking for the sale. What else can we do? Even with incentives and promotions, the leasing people are still ultimately responsible for closing the sale. Very few clients will whip out their debit cards and say, “I’ll take it!” Most people who are not forced into making a buying decision will delay making one. They will continue to weigh all their options, and there are LOTS to consider! I believe that the number one reason that leasing people are not converting more prospective renters into residents is because they stop short of asking for the sale. They are not “setting the hook.” They do a sensational job of presenting their product and explaining the application pro-

cess, which I would refer to as “putting the ‘bait’ out there.” However, when they get a buying signal (A BITE!!) they do not recognize it for what it is, and then let the prospect get away. Here is what it looks like on a shopping report: After an outstanding presentation, the leasing consultant asked if I thought the apartment would work for me. (bait) I responded with great enthusiasm, “I love it! It’s perfect!” (bite) She said, “That’s great. All you have to do if you want this apartment is fill out an application form and leave a $250 deposit. We can process your application within 24 hours. I’ll get you an application to take home with you. Then you can fill it out and bring it back if you decide you want the apartment.” (letting the fish off the hook) I agreed to take the application form and thanked her for her time. (fish swimming away) She thanked me for coming by and closed with, “I hope to hear from you soon.” (watches fish swim away and wonders how that fish got off the hook . . .) Relaying information about rental requirements is not the same thing as ASKING for the sale. I firmly believe that many leasing consultants honestly think that they are closing the sale by describing the application

process if someone is interested in renting, rather than coming right out and asking that person to rent. Remember: In order to get a commitment, you have to ask for one. Asking for the rental sounds something like this: After an outstanding presentation, the leasing consultant asked if I thought the apartment would work for me. (bait) I responded with great enthusiasm, “I love it! It’s perfect!” (bite) She said, “That’s great. Let’s go back to the office and I’ll get you started on the application.” (setting the hook) I told her I wasn’t ready to do that just yet because I had a cou-

ple more places to look first. She reminded me how much I loved the vaulted ceilings and the spacious kitchen, and I had to agree. When we got back to the office she handed me the application form and a pen. She said, “Go ahead and make yourself comfortable. I’ll get you something cold to drink while you start filling out the application.” (reeling in the fish) She returned with my soft drink and said, “I’ll need two separate checks: One for the deposit and the other for the application fee. Make the first one out to…” (having fish for dinner tonight) Some of the most exciting, yet

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RENTAL HOUSING JOURNAL METRO

Why Work-Life Balance is the Wrong Idea A Better ‘Balance’ Is Finding the Right Job for Your Purpose, Says Talent Expert

By Brian Mohr he corporate world is susceptible to fads.

Work-life balance, a push to properly prioritize work in relation to lifestyle, features the kind of fad-ish thinking that can lead gifted people down the wrong path, says talent expert Brian Mohr. “Think of those who love their job – for them, it’s not exactly ‘work’ as they exercise their capabilities fully toward a goal that they believe in,” says Mohr, co-founder and managing partner for Y Scouts (yscouts.com), a purpose-based leadership search firm.

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“Finding the right fit – whether an organization is searching for leadership or an individual is seeking the right job – is more important than people realize. The problem of work-life balance starts farther upstream. When the appropriate person is aligned with the appropriate goal, balance is natural.” A concept like work-life balance is a claim on how we should prioritize our lives, which, if believed, can be confusing. Mohr discusses how an organization’s employees, from bottom to top, can benefit from a more helpful perspective. • Don’t buy into the notion of the “work you” as being separate from the “real you.” We spend 8.8 hours of each day working, according to the United States Bureau of Labor Statistics – the largest amount of time spent in any single activity (sleeping is second at 7.6 hours). Work-life balance enforces a strange notion that you are essentially different on the clock than off the clock, which hurts both employers and employees. Who wants this divided personality? Why not be yourself while doing what’s important – providing for your well-being and that of your family? “Costumes are for Halloween,” Mohr says. “In my line of work, I want to offer a leader who is authentic and not some impostor version of who they really are.” • Not everyone is working for the weekend. Rather than worklife balance, it’s more helpful to think of your role in a company or nonprofit as work-life symbiosis. Just do the math. Working nearly nine hours in a role that you do not like doesn’t stack up well with two days that quickly pass by – assuming you hate your job. How many years of your life do you want to waste not doing what would make you happier? “Most importantly of all is aligning the right people with the right role,” Mohr says. “That means aligning the purpose and values of an organization to the purpose and values of the right people. Everyone owes it to themselves to find the right organization.” • Take a cue from your tech-

nology. In today’s world, we simply cannot compartmentalize different areas of our lives like people used to. You can communicate with your spouse at any time and know people better through social media than through real-life interaction. And, for work, most of us carry our work around in our smartphones. If not text messages, then we get emails sent to our phones. “Whether through our technology or the software running in our brains, we don’t simply turn off work when we leave the office,” he says. “We should drop the idea that ‘work’ and ‘life’ are somehow separate. They’re not.”

only real competitive advantage in business and the best employer/ employee connections start by connecting through a shared sense of purpose and values. Previously, Mohr worked as a talent strategist and in leadership management for major corporations, including P.F. Chang's China Bistro and Jobing.com. He is a graduate of the Advanced Executive Program at Northwestern University’s Kellogg School of Management.

Brian Mohr is co-founder and managing partner for Y Scouts (yscouts.com), a purpose-based leadership search firm that connects organizations with exceptional leaders. Y Scouts operates under the belief that people are the

RENTAL HOUSING JOURNAL METRO

Dear Maintenance Men: Dear Maintenance Men: I have a bathroom sink that is slow draining. I have already snaked the drain and found no stoppage. When I remove the pop-up assembly and have an open drain, water whooshes down with no problem. However, with the pop-up in place, water backs up into the sink and drains very slowly. Paul Dear Paul: Most bathroom sinks have an overflow hole near the top edge of the sink. This hole serves two purposes; 1: Acts as a safety drain to keep the sink from overflowing should the water rise above a certain level in the sink. 2: The overflow hole also serves as an air vent for the sink when the water levels are above the pop-up plug. The overflow hole allows air to escape through the drain and the water to evacuate more efficiently. What has happened is hair, toothpaste, grime etc. have built-up and sealed off the overflow drain where it exits just below the pop-up assembly plug. Most snakes are too big to go through the overflow drain. Alternatively, a speedometer cable will work great or even a long zip tie will work. Push the cable or zip

tie down through the overflow hole at the top of the sink and push any gunk out into the drain. Use water to help push the debris out the overflow drain, a funnel works great to direct a good flow of water. If you cannot access the overflow to drain, you will need to disassemble the main drain assembly to gain access to the overflow drain exit. Once the overflow drain has good airflow, the sink should drain a bit faster. If this does not solve the problem completely, look at restricting the water flow coming out of the faucet. Use a restrictive aerator to cut down on the GPM of the faucet. Dear Maintenance Men: I run into a vendor communications problem every now and then. It is very frustrating and at times costly to my pocket book or the vendors’ depending on whose error it is. It can be as simple as the wrong shade of paint, to as serious as work completed in the wrong unit. I try to keep my directions as simple and direct as possible, but mistakes still happen. What do you recommend? Steve Dear Steve: Sometimes familiarity and the assumption the other party can read

our mind gets in the way of proper communication skills. We have found that even with vendors we have used for a long time and who should know better, fall victim to mind reading errors. We no longer rely on verbal confirmation when finalizing a job. Everything is in writing no matter how small. Now, errors can still happen, but it is much easier to find who is at fault. To minimize errors further, be sure to write in a concise direct manner in simple sentences. Do not use compound sentences or complicated, jargon filled sentences. Write for the lowest common denominator. Often the work order will go from the contractor directly to his techs without any further explanations. The techs need to understand clearly what work is expected and authorized. If you have more than one task being performed in an apartment unit, itemize and specify by room what the work is. If you are painting, specify the color, flat or semi-gloss and what rooms are to be painted. If you have rooms or objects that are not to be painted, use a separate sentence so the difference can be clearly noted. This works with faucets, window coverings,

flooring etc. Have the other party initial not only the original work order, but also any changes that take place before work proceeds. With the work order initialed, miscommunication is less likely. Don’t forget to add special notes and details when needed, include a phone number for any question. Dear Maintenance Men: I am getting complaints for my residents that they are not getting hot water or that they need to run the water a long time before getting hot water. I checked the water heater and it is operating properly. What do you think the problem is? David Dear David: The first thing we would check is the circulation pump for proper operation. Calcium or hard water deposits in the water heater and lines may also aggravate this problem. The circulation pump’s job is to bring hot water to all the units at the same time. When the pump is not working or is clogged; the hot water will take much longer to get to the units furthest away from the heater. The first step is to determine if the pump is work...continued on page 23

Hoarders ...continued from page 18

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other clutter, in conjunction with a professional organizer or mental health provider. As with any RA request, housing providers need to evaluate the request and the verification of disability and respond in a timely manner. Housing providers are always well advised to review the legal reasons for denial, consult with a fair housing attorney, document the rationale for their decision, and feel comfortable defending it if a complaint / case follows when making a decision on a RA request. As always, regardless of the request that’s made or what the disability is, if a denial is made, HUD says a conversation should ensue about what would work for the individual with the disability. Want to learn more? Suggested reading list: Hoarding basics: www.psychiatry.org/hoarding-disorder -American Psychiatric Association: “Hoarding Disorder” "The Hoarding Handbook: A Guide for Human Services Professionals" – Bratiotis, Christina, et. al., New York: Oxford University Press, 2011 “Task Forces Offer Hoarders a Way to Dig Out” – The New York Times, Jan Hoffman, 5/26/13 “Obsessive compulsive and related disorders” – American Psychiatric Publishing This article brought to you by the Fair Housing Council; a civil rights

organization. All rights reserved © 2015. Write jbecker@FHCO.org to reprint articles or inquire about ongoing content for your own publication. To learn more… Learn more about fair housing and / or sign up for our free, periodic newsletter at www.FHCO.org. Qs about this article? ‘Interested in articles for your company or trade association? Contact Jo Becker at jbecker@FHCO.org or 800/424-3247 Ext. 150 Want to schedule an in-office fair housing training program or speaker for corporate or association functions? Visit www.FHCO.org/learning-resources/trainings to learn about the trainings we offer for companies and groups. Federally protected classes under the Fair Housing Act include: race, color, national origin, religion, sex, familial status (children), and disability. Oregon law also protects marital status, source of income, sexual orientation, and domestic violence survivors. Additional protected classes have been added in particular geographic areas; visit FHCO.org/mission.htm and read the section entitled “View Local Protected Classes” for more information.

Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

Changes to the Treatment of Depreciation Effective with Your 2014 Tax Return

Ay Heather L. Jackson, CPA | Tax Manager | Kern & Thompson, LLC, Cliff Hockley, President &

Heather Hill | Bluestone & Hockley Real Estate Services

arning: The following article attempts to clarify important changes to the tax code. While pertinent to property owners, no amount of artistry could make this material more exciting. We recommend that readers use patience to digest this complex topic.

The federal government recently made major changes to tax regulations with a specific focus on the capitalization of tangible assets. Not only do these changes impact all taxpayers that acquire, produce or improve tangible property, they provides specific rules for buildings versus other tangible property and provide guidance on the application of Sections 162 (a) – deduction, versus 263 (a) – capitalization. To start, the IRS clarified the definitions of different types or property that are important in the decision to write off or capitalize on expenditure. To understand the new regulations, we must first refine what determines a unit of property. According to the IRS, a unit of property is real or personal property consisting of all of the components of property that, functionally interdependent,

comprise a single unit of property. For example, a truck is a unit of property because all the parts are interdependent; however, each building in an apartment complex with multiple buildings is a single unit of property. Materials & Supplies The new tangible property regulations also define the treatment of materials and supplies. Materials and supplies are NOT: a unit of property, acquired as part of a single unit of property, or inventory. Materials and supplies ARE: Consumed in the taxpayer’s operations • A component acquired to maintain, repair or improve a unit of tangible property owned, leased or serviced by the taxpayer • Items that are reasonably expected to be consumed in 12 months or less • Items with an economic useful life of 12 months or less • Items with an acquisition cost or production cost of $200 or less • Identified in the Federal Register or in the IRB as materials and supplies

Safe Harbor Rules The new 2014 tax changes provide an election to treat certain materials and supplies under the de minims safe harbor rule. The de minims safe harbor rule allows taxpayers to deduct items up to $500 or those with a useful life of less than 12 months. The limit can be increased to $5,000 with an applicable financial statement. (Examples of applicable financial statements are: Financial statements required to be filed with the Securities and Exchange Commission (SEC), independent certified public accountant (VPA) audited financial statement (not a compilation or review prepared by a CPA), and financial statements (other than a tax return) required to be provided to a state government or any federal or state agency (other than the SEC or the IRS)). Safe Harbor can be applied on a per-item, per-invoice basis but the taxpayer must have an accounting policy and it must be applied to all eligible materials and supplies. For Example: Josh owns an apartment complex with a rental office onsite. The rental office

Research answered the questions, “How can this be? Who owns all the new homes that these companies are helping to build?” The answer: investors of all sorts, shapes and configurations. “Individuals and large investment

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You’re probably wondering how this is possible. How can homeownership be at a 48-year low while home builders, suppliers, and cabinet makers’ stocks are at multi-year highs? Again the keen eyes of Casey

purchased a new printer for $199 and desk for $499 in 2014. Josh makes the de minims safe harbor election on his 2014 tax return. Because of the election he can deduct the full $698, instead of capitalizing and depreciating over the life of the property. This is an annual election. Form 3115 – Annual Accounting Policy Election Josh must elect an accounting policy to do this correctly. As of 2014, all taxpayers that acquire, produce or improve tangible property will now be required to file form 3115 declaring the current accounting method for depreciation. The IRS did grant a reprieve to “small” businesses (which are defined as 10 million in assets and 10 million in revenue) from filing form 3115 for the 2014 tax year. Initially there was also a $3,500 per property penalty if form 3115 was not filed. For Example: Jake inherited a residential

companies have been buying up homes,” claims a recent report by The Casey Daily Dispatch. “In fact, US private equity firm The Blackstone Group (BX) is now the single largest homeowner in America. Blackstone has purchased nearly 50,000 homes since 2012.” Bloomberg also reported recently that indeed it is investors who are driving the housing recovery: “Investors who purchased at least 10 homes a year have spent about $68 billion on 528,000 single-family houses since 2011, according to Morgan Stanley analyst Haendel St. Juste, making a corporate business out of a space dominated by mom-andpops.” Because of this, America is turning into a nation of renters, which is good news for property managers.

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Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

To Social Media Relevance

Those Seemingly Inconsequential Hashtags are Crucial to Gaining More Exposure for Your Brand By Jay York ot so many years ago, many people probably paid little attention to that pound sign on the computer keyboard. You know, the one that looks like this: #. Then along came Twitter and what we have come to call the “hashtag,” and social media marketing was changed forever. Yet not everyone takes advantage of hashtags the way they should, and that’s unfortunate because if you are not using hashtags you are missing out on exposure for you and your brand. When you are on social media sites such as Twitter or Instagram, your goal should be to become part of the conversation. The hashtag allows more people to find your contributions to that conversation. Without them, you miss out on lots of eyes that could be viewing your content. For example, let’s say 1,000 people follow you on Twitter. Not counting re-tweets, only 1,000 people will see your posts

if you don’t use a hashtag. Add the hashtag, though, and you start picking up momentum because the post has the potential of being seen by, and re-tweeted by, any number of people. A common hashtag, such as #love, can position your post to be seen by potentially millions of people. But be warned. While there are great benefits to hashtags, there also are pitfalls. Hashtags don’t come with exclusivity. Anyone can use them, so a hashtag can become a weapon that works both for you and against you. Critics of your brand, or just the usual assortment of Internet trolls, may attempt to hijack your hashtag, putting you or your business in a bad light. A prime example of a hijacked hashtag happened a few years ago when McDonald’s, apparently hoping for a flattering conversation about the restaurant chain, introduced #McDStories on Twitter. #McDStories went viral, but not in a good way as

the Twitter world had a field day tweeting unflattering tales of their alleged bad experiences with the restaurant. Don’t let such cautionary tales deter you, though. March boldly into hashtagging, but as you do keep in mind these suggestions for getting the most out of your efforts. • Use proprietary hashtags. One of the advantages to a proprietary hashtag, such as “Orange is the New Black’s” hashtag #OITNB, is that it is linked directly to your brand. These hashtags typically are not used as widely as a more generic hashtag, but the goal is to brand yourself through the hashtag with the hope it could go viral. • Don’t overdo it. A post littered with too many hashtags can be difficult to read, so your message might become obscured as your followers see what appears to be gibberish. Perhaps you saw the skit Justin Timberlake and Jimmy Fallon once performed in which they

spoofed the device’s overuse by lacing their spoken conversation with seemingly endless hashtags. It was hilarious and annoying all at the same time. Twitter itself suggests using no more than two hashtags per Tweet. Certainly, three should be the very maximum on Twitter. A different etiquette exists on Instagram, though, and most Instagram followers will tolerate excess hashtags. Meanwhile, although hashtags can be used on Facebook, there’s little reason to include even one. That’s not the way people use that social media site. • Think geographically. If you are a local company that depends mainly on local clientele, a hashtag that links to your location works well. Hashtags such as #Bizbee or #Bangor drop you into numerous conversations about your hometown. Since social media has become such a vital element of any comprehensive marketing strategy, understanding all of the nuanc-

Ask the Secret Shopper ...continued from page 16

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Rental Housing Journal Metro • August 2015

RENTAL HOUSING JOURNAL METRO

rental in June of 2013. When preparing his tax return in 2013 he didn’t report the step-up as his basis in the rental house. In 2014, Jake realized this mistake and wanted to reclaim the additional depreciation that was missed on the 2013 tax return. Jake can now file IRS Form 3115, changing the accounting method. This will give him the audit protection for 2013 and correct for the missed depreciation in 2014. Capitalizing Improvements The requirement to capitalize amounts paid for improvements to a unit of property depend on the purpose of the improvement. Betterments ameliorate an existing material condition or defect and can include expansions. Restorations assume that the property being restored has fallen into disrepair and is no longer functional or has caused a major component to cease functioning. Improvements adapting the property to a new or different use can also be capitalized. For Example: If the landlord of a manufacturing space decided to convert

it to apartments, the cost to regrade the land would need to be capitalized but the amount paid to clean up the site (which does not adapt the land) does not need to be capitalized. Likewise, if a tenant leased adjoining spaces in a commercial office building, the cost to combine the two spaces would be deductible because it does not adapt the use of the space. Deductible repairs and maintenance are activities not required to be capitalized as tax improvements. However, you can elect to capitalize for tax purposes if capitalizing for book. Routine maintenance and small taxpayers enjoy safe harbor protection. An activity is routine maintenance under the safe harbor rules if the activity is performed more than once during the class life of the (nonbuilding) property. In the case of buildings, the activity is performed more than once during a 10 year period. If unsure whether something can be claimed as routine maintenance, consider the recurring nature of the activity, if it is industry practice, whether it coincides with the

manufacturer’s recommendations and whether you have had experience with it at a similar or identical property. Tax payers may elect not to apply the capitalization requirements to an eligible building property if the total amount paid during the taxable year for repairs, maintenance, improvements and similar activities performed on the building property does not exceed the lesser of 2% of the unadjusted basis of the eligible property or $10,000. For Example: John and Jane own a residential rental which originally cost $305,000. During 2014, they had a plumber fix a leaking pipe for $250, they replaced the home’s water heater for $1,900, and repaired the siding from a wind storm for $1,400. John and Jane filed the small taxpayer safe harbor election with their 2014 return and then deducted the entire $3,550 since it’s less than 2% of the unadjusted basis (cost) of the home. This is an annual election. What’s ahead for 2015? On December 16, 2014, the tax extenders were passed bring-

ing back the higher Section 179 limits and bonus depreciation at 50% effective January 1, 2014 to December 31, 2014. So as of right now, we are at the reduced Section 179 amount ($25,000) and lower limits ($200,000) and no bonus deprecation for 2015. This makes some taxpayers susceptible to the Alternative Minimum Tax which was permanently fixed a few years ago. With bonus depreciation gone, the tax and AMT depreciation are no longer the same. This may cause someone to fall into AMT where in the past, bonus depreciation prevented this. This article attempts to summarize recent tax changes using examples for clarification purposes only. Every investor has a different tax situation; please consult your tax advisor for your specific situation. PropertyManager.com a Service of AppFolio

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ESS: ____________ __________________ __________________ ____ DATE:_____ (G)Good (F)Fair CITY: (P)Poor ___ __________________ __________________ ____ UNIT: ______ __________________ ___ In _____ STATE: ______ Out In Out ____ ZIP: ______ ___ BEDROOM

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DESCRIPTION OF PET(S)Blinds/Drapes

Stove/Racks

Refrigerator

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Dear Maintenance Men: ...continued from page 18 ing. The pump is normally found next to the water-heater. Check that the motor is plugged into an electrical outlet. Next, touch the water lines on either side of the pump and determine the temperature. If it is working properly, the lines should be warm or cool to the touch, not hot. If the pipes are hot or very hot to the touch, the pump is not working properly. If the pump does not spin when plugged in, it may need to be replaced. If the pump motor is working, the pump may be clogged with debris. Remove the pump and clear out the lines. Pay special attention to the line between the pump and the water heater. The pump tends to impact this section of the water line due to calcium buildups in the water heater tank. While you have things apart, this is a good time to clean out the tank deposits, which may be contributing to the slow hot water issue. Water heater clean outs should be done at least once a year. If you live in a hard water area, adding a water softener to the incoming cold water line will greatly improve calcium and hard water buildups in the water tank.

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