Rental Housing Journal Metro March 2016 by Professional Publishing, Inc

Rental Housing Journal Metro

March 2016

3. Why Buy Earthquake Insurance?

6. Oregon Senate Passes Bipartisan Housing Legislation

4. Fair Housing Facts & Tips

8. Dear Maintenance Men – Water Heaters, Paint Prepping & Swimming Pools

5. Maintenance is a Part of What We Do

12. Rents to Flatten in 2016 13. Oregon’s Bill 4134 and How it May Effect You 18. Ask the Secret Shopper – Ready Vacants

Portland/Vancouver

www.rentalhousingjournal.com • Professional Publishing, Inc

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

Commercial Real Estate Experts

4Q15 Market Overview Multifamily Housing Update

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

1,134.4m 39.1m (3.6%) 29.7m (2.7%) 26.4m (2.3%) 22.8m (2.0%) 18.1m (1.5%) 18.4m (1.5%) 4.7% (Dec.)

4Q15 Payroll Trends and Forecast Portland’s labor market continued to outperform historical norms, adding to payrolls at a 39,100-job, 3.6% year on year rate, more than twice the Rose City’s 25year historical average and the 20th consecutive quarter of 2% growth or faster. This supercharged job creation was sustained with virtually no help from the typically procyclical construction sector, which added only about 500 (0.9%) jobs in 2015. Instead, manufacturing, transportation and all variety of skilled services led the charge, collectively hiring at a 28,700-job, 4.1% rate. Of note, the techheavy professional and technical services sub-sector contributed 3,300 jobs, a 4.7% annual advance. Seasonally adjusted data also recorded robust gains. This series indicates that establishments added 26,400 jobs July-to-December and 41,600 for the full year, the largest 12-month add recorded in Portland’s 26-year BLS series. With Portland job creation running so far above normal, specifying an unbiased model that produces “reasonable” results can be challenging. In the end, RED Recontinued on page 9 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

Moderate Expansion, Easing Prices Expected in 2016

espite various global and domestic hurdles hindering economic growth, steady job gains and stable leasing demand should help keep commercial real estate activity expanding in 2016, according to the authors of an annual report published jointly by Situs Real

Estate Research Corporation (RERC), Deloitte and the National Association of Realtors®. According to the report, Expectations & Market Realities in Real Estate 2016— Navigating through the Crosscurrents, commercial real estate activity is forecast

to gradually grow this year with demand for space holding steady across all commercial sectors. While commercial property values and price gains are expected to flatten after surpassing 2007 peaks in continued on page 11

EPA Cracks Down On Lead Violations

By Jo Becker, Education/Outreach Specialist, Fair Housing Council of Oregon

ate last year the Environmental Protection Agency (EPA) announced it took action against 75 renovation contractors and others to protect people from harmful lead dust and debris exposure, as required by federal Lead-based Paint Renovation, Repair, and Painting (RRP) regulations. PRSRT STD US Postage PAID Portland, OR Permit #5460

These cases show EPA is cracking down on businesses and renovators who ignore federal requirements that have been in effect for several years now. These requirements apply to many repairs and renovations done to painted surfaces in homes and daycare facilities built prior to 1978. Pre-78 properties are of concern, as they

are a major source of lead exposure that can cause lead poisoning, especially in our nation’s young children. The RRP Rule, which is part of the federal Toxic Substances Control Act, is intended to ensure that owners and occontinued on page 14

Advertise in Rental Housing Journal Metro Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly. Call 503-221-1260 for more information

Rental Housing Journal Metro

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Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

Why Buy Earthquake Insurance? By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

any of our clients have asked us over the years if they should purchase earthquake insurance. This is a difficult question to answer specifically because every property is constructed differently (i.e. wood, masonry, concrete, metal) and is located on different soil(i.e. clay, rock, sand). The height of the building also makes a difference. Imagine the impact on a one story building versus a thirty story unreinforced masonry building. The age of the building, and the code requirements in every state and city, need to be taken into consideration as well. Most importantly, building owners want to know what risks their buildings face located in the Cascadia subduction zone, a seismic area that encompasses the coastal areas of Northern California to Vancouver Island and inland to I-5.

The Impending Risk In the cover story in the July 2015 edition of the New Yorker Magazine titled,“TheReally Big One: An earthquake will destroy a sizeable portion of the coastal Northwest.”Author Kathryn Schulz pointed out, “we now know that the odds of the big Cascadia earthquake happening in the next fifty years are roughly one in three. The odds of the very big one are roughly one in ten.” Chris Goldfinger, professor and paleoseismologistat Oregon State University, is an expert in seismic and tectonic studies and one of the main sources of the New Yorker article. In 2011, he also authored a comprehensive study on the Cascadia subduction zone for the US Geological Survey based on 13 years of research that exposed a pattern of earthquakes reflected in the region’s earthquake history. “Over the past 10,000 years, there have been 19 earthquakes that extended along most of the margin, stretching from southern Vancouver Island to the Oregon-California border,” Goldfinger noted in a 2012 OSU news release on the paper. “These would typically be of a magnitude from about 8.7 to 9.2 – really huge earthquakes. We’ve also determined that there have been 22 additional earthquakes that involved just the southern end of the fault,” he added. “We are assuming that these are slightly smaller – more like 8.0 – but not necessarily. They were still very large earthquakes that if they happened today could have a devastating impact.” Jay Patton, a co-author on the study, added, “By the year 2060, if we have not had an earthquake, we will have exceeded 85 percent of all the known intervals of earthquake recurrence in 10,000 years. The interval between earthquakes ranges from a few decades to thousands of years, but we already have exceeded about three-fourths of them.”The last major earthquake along the Cascadia subduction zone was estimated to have occurred in approximately 1700.

The Predicted Impact

What that mean to owners of Pacific Northwest properties is that there is a risk and we need to prepare for it. A 2011 Cascadia earthquake study by the Federal Emergency Management Agency (FEMA) estimated that only 20 percent of the buildings located in the Portland Metro region would escape damage; the other 80 percent would suffer damage from slight to complete loss.

Table 1: Analytical Baseline Study for the Cascadia Earthquake and Tsunami (Source: FEMA, November 18, 2011) Commercial Metro Outside Metro Total

None 6,759 14,333 21,092

Slight 10,106 7,596 17,702

Moderate 12,270 11,878 24,148

Extensive 4,647 7,904 12,551

Complete 461 3,072 3,533

Total 4,242 44,785 79,027

Statewide, the report predicted that about 27 percent of commercial buildings would survive without damage, and 22 percent would suffer slight damage. The remaining buildings which would suffer moderate damage (31 percent) or extensive damage (16 percent)or will be completely destroyed(4 percent)will not be unusable for commercial purposes. More importantly, the Oregon and Washington coastline will most likely be swamped with a tsunami. continued on page 10

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Rental Housing Journal Metro

Fair Housing Facts & Tips

he Fair Housing Act protects people from discrimination when they are renting, buying, or securing financing for any housing transaction. The Fair Housing Act specifically cover’s discrimination because of race, color, national origin, religion, sex, disability and the presence of children. (Provided by HUD)

Fair housing laws prohibit illegal housing discrimination. Discrimination is illegal in any housing situation if it is based on, or adversely affects, a “protected class.” That is, if someone is denied a home, is treated differently, or is harassed because of one of the reasons listed below, it is illegal. Consistency is Key! 1. Remember to be consistent within your daily job performance & Interactions when dealing with residents, prospective residents and their guests 2. Never make assumptions regarding a. Disabilities b. If an animal is a companion or pet c. Treat everyone the same! Discrimination is sometimes deliberate or unintentional due to lack of Fair Housing knowledge toward residents, prospective residents & their guests that fall into any protected class category More often than not discrimination occurs during the leasing process while dealing with prospective residents. BE CAREFUL! The information and purpose of leasing and Fair Housing is not to scare you out of the industry. It is an extremely import-

ant part of the job performance and expectation. Fair Housing classes will give you the understanding of pitfalls of falling into possible discrimination in Fair Housing. It also prepares and gives the tools necessary to help avoid complaints.

Here are a few examples that occur during leasing: Example: Oh my, your children are beautiful! I have the perfect home for you on the ground floor by the playground! I am so excited to show you this apartment Intention: More than likely the leasing associate has the best intentions for the prospective residents, it is still DISCRIMATION. Perception: This is discrimination in the form of Steering, and could prompt a complaint. Correct Action: Anyone applying for an apartment can live in any available unit and must be show the same apartments as anyone applying Prevention: EDUCATE, EDUCATE, EDUCATE! It is necessary to make certain that the associates working for you are knowledgeable and trained to minimize the risk to you and your company

Learn about the Federal, State and Local protected class on The Fair Housing website http://fhco.org

My best advice is Document, Document, and Document! Documentation How does documentation have the potential for a complaint? Example: You may have a star on one guest card and not another or you may have written she is so sweet make a great resident! Intention: You really liked that prospect and really thought they would make a great resident and noted as much on their guest card Perception: This could be construed as discrimination base on the fact that these types of doodles and or comments were not present on all guest cards. These guest cards would be brought into question should a complaint be filed Remember not to doodle or make marks on applications, guest cards or any paperwork related to prospect or resident Fair Housing Laws apply to:

Discrimination is Discrimination! Unfortunately, even the best of intentions of the leasing consultant can put them, the owner and Management Company at risk. Make no mistake, Fair Housing and discrimination is real and happens.

Ignorance Of The Law Is No Excuse!

• Owner / Agents • Property Management Companies • Maintenance, Leasing & Administrative staff

• Individuals, Corporate & Business Owners • Architects, Builders, Developers, Engineers • Responsibility is non-delegable • Ignorance of the law is no excuse A couple of thoughts, ask your associates and how they would address these scenarios in the leasing process? (In red are common answers and or thoughts your will receive from the well intentioned leasing associates and are discriminatory, in my experience during training) • Women with 2 young children? Do not make assumptions! . This women and children will be quite, I can put them upstairs • Married couple with 2 teen aged boys? . Those boy are going to be trouble • Married couple with 1 teen aged girl? . Quite residents

Discrimination is real and can be prevented! by Dana Brown – EDGE Training – Full Spectrum Residential Services, LLC danabrown3321@gmail.com or 503-740-8432

• Outside Vendors such as Landscapers, Painters, • Exterminators, Insurers, etc. • Real Estate Agents, Brokers, Lenders • Homeowners & Condo Associations

See you at the 2016 Maintenance Fair We’ll be at Metro’s Recycle at Home booth. MF NW Maintenance Fair 2016 Thursday, March 31, 2016 7:30 a.m. – 4 p.m. Oregon Convention Center, 777 NE Martin Luther King Blvd. Get free materials and support to make your job easier. Keep your garbage and recycling program working for you and your residents. Multifamily Resource Line: 503-823-7224 Online: www.portlandoregon.gov/bps/multifamily Email: multifamily@portlandoregon.gov

Rental Housing Journal Metro · March 2016

President: John Sage Vice President: Phil Owen President Elect: Ron Garcia Secretary: Lynne Whitney Treasurer: Elaine Elsea

John Sage, RHA Oregon President

Past President: Elizabeth Carpenter Oﬃce Manager: Cari Pierce

President’s Message

10520 NE Weidler, Portland, OR 97220 (503) 254-4723 • Fax (503) 254-4821 info@rhaoregon.com • www.rhaoregon.org

Maintenance is Part of What We Do

ell, the weather is already warm and dry for this time of the year. I am sure that you, as well as I, are ready to get started on projects for our rentals and personal homes. It is time to start working on landscaping and other repairs. Maintenance is part of what we do as property owners. We weather the storm of winter, assess the damage, make repairs, and then get ready for the next year. This year there have been many storms of change to our industry resulting from the concerns revolving around supply and demand of rental property. Mainly low supply and high demand!! Rents have increased, and so have the number of people applying for rental housing. The city of Portland is experiencing population growth, as the state of Oregon is the number one state in the nation people are moving to. New rental units are coming, but will it be enough to keep up with the demand? As a rental property owner, these are good problems to have, but they too can also be very frustrating. I talk with property owners every day about the problems that they face. One of the things that I see is that coming together and talking about best practices makes all of us better at what we do. I don’t want to use all of my space this month talking about new bills currently being debated in the State

ON-SITE-NW SEA

Fair Housing Class in April, but coming March 10th and 22nd is Landlording 102 training taught by Attorney at Law Jeffrey Bennett. METRO, We also have ARIZONA several tenant VALLEY, screening classes throughout the months of March and April. You can go to our website and check our calendar for more details. Our office team is also available to help guide you to needed information. The State legislative session has started in Salem this month. As always, we are getting reports from Cindy Robert, our lobbyist for RHA Oregon, about upcoming bills. Cindy does a great job keeping us informed about those bills, which can have an effect on how we conduct our business as property owners. I would encourage you to check your emails and read the UPDATE for important information. Also, please make sure that we have your current email address for alerts and calls to action that may be coming. With 1800 members we can be a strong voice in the state for our industry, but only if we are taking the opportunity to make our voice heard.

APT

Salsbury Indu

Legislature so I will just point out that together we can and do make a difference on these issues. Are all of you taking advantage of the training and classes that RHA Oregon has available? Are you up on the current Fair Housing laws and how they apply to operating your business? The reason I ask is because of a recent conversation that I had with a rental property owner. This rental property owner had a no pet policy with all his properties. However, an applicant recently requested an accommodation for a companion animal. This owner was unaware of the Fair Housing laws concerning this issue and denied the applicant based on the companion animal and his own no pet policy. Since my day job is that of an insurance agent, I was, to say the least, aghast at the potential law-

Feb, Apr, Jun, Aug, Oct, Dec

suit that I could see on the horizon for this owner. Thankfully, I recovered quickly from my shock and got him in touch with the RHA Oregon office so that he could get some help. Once I found out he was not a member of RHA Oregon I recommended that he join the association so that he was sure to get future information and training to cut down on the potential for a loss or claim due to not knowing the current laws. Fortunately for him, RHA Oregon has a Fair Housing class by the Fair Housing Council of Oregon on April 7th. Property owners who are not aware of the laws and are operating improperly affect not only themselves, but in the long run all of us. Please, if you know of someone who is in need of help or who could use some training let them know about RHA Oregon. Not only do we have the

Sincerely, VALLEY, John Sage METRO, ARIZONA President RHA Oregon Stegmann Insurance Agency Inc.

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Form of the Month & Event Calendar on page 6

1/8 Page 4 7/8” x 3 5/8”

Rental Housing Journal Metro 16083 SW Upper Boones Ferry Rd, Suite 105, Tigard, OR 97224 503-213-1281 | Fax 503-213-1288 | www.multifamilynw.org

Form of the Month & Event Calendar

3/7/2016 3/8/2016 3/11/2016 3/15/2016 3/15/2016 3/16/2016 3/17/2016 3/21/2016 3/22/2016 3/23/2016 3/24/2016 3/31/2016 4/42016

Law and Rule Required Course (LARRC) (Portland) CAMT: Heating (Portland) It’s the Law - Smokin’ Hot: Marijuana and Your Rights (Portland) Curb Appeal (Portland) NSPF® CPO® 2 day Certification Class (Portland) CAM: Human Resources Part I & II (Portland) SOLD OUT – Fair Housing 150 (Portland) Unit Inspections and Turnover Techniques (Corvallis) CAMT: Air Conditioning (Portland) CAM: Fair Housing (Portland) Unit Inspections and Turnover Techniques (Portland) Maintenance Fair 2016 (Portland) Washington Landlord Tenant Law (Vancouver)

Form of the Month SMOKING POLICY ADDENDUM

Smoking Policy Addendum M155 OR

DATE __________________________________________ PROPERTY NAME / NUMBER __________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________ ___________________________________________________________________________

_______________________________________________________

UNIT NUMBER ___________________________________ STREET ADDRESS ________________________________

_____________________________

CITY _________________________________________________________________________________________________________________________________

Take advantage of this essential move-in form to describe in detail your smoking policy for your rental properties. Whether it is completely banned, or permitted in certain areas, this enables you to enforce your smoking policy and easily collect on subsequent smoke damage from tenants’ noncompliance.

Due to the increased risk of fire, increased maintenance costs,, and possible health effects of secondhand smoke, Owner/Agent is s adop the following policy relating to smoking which covers all orr a part of the th premises on which the dwelling unit is located (the “Premises”). emises”). The T following terms, conditions and rules are hereby incorporated orp ted into the Rental Agreement. 1. PREMISES SUBJECT TO SMOKING POLICY CY (Check paragraph that applies): c P SES X SMOKING PROHIBITED—ENTIREE PREMISES c PREMISE X SMOKING ALLOWED—ENTIREE PREMISES c HE FOLLOWING L LIMITED MITED AREAS X SMOKING IS ALLOWED IN THE (Check all that apply). ALL OTHER AREAS OF THE COMMUNITY ARE NO-SMOKING: locate at: c X The smoking areaa located

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c _______ _________________________________________________________ X c _____________________________________________________________ X Other: ___ Note: Smoke if smoking is allowed, will never be considered normal mal wear wea and tear. 2. DEFINITION OF SMOKING. The term “smoking” means inhaling, exhaling, breathing, carrying, or possessing any activated vaping device, lighted cigar, cigarette, pipe, other tobacco product or any other similar lighted product in any manner or in any form. 3. IF SMOKING PROHIBITED. 3.1 (Entire Premises). Resident agrees and acknowledges that th entire Premises has been designated as a no-smoking livin environment. Resident agrees that he/she will not smo SAMPLE ___________ ___ __ __ feet anywhere on the Premises or adjacent to and within (if left blank, 10 feet in OR or 25 feet in WA) of any portio the Premises. Resident will not permit any guests or visito Resident to do so. ees and 3.2 (Smoking allowed in limited areas). Resident agrees acknowledges that all areas of the Premi are no-s oking except for limited areas. Resident agre he wil only re smoke in the areas of the Premi e where smoking is allowed and will only per rs to smoke in smoking designated areas. 3.3 Resident agrees to inform all of his/her g i f the no-smoking policy and t ny g who violates the policy to l t is r the st actions of his/her guest s. X

SAMPLE

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DATE

SAMPLE SAMPLE ON SITE

_________________________________________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ __

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ATE __________

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___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ ___________________________________________________________________________

_____________________________________________________________________________________ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

________________ ___ __ ___ ___ ___ __

ZIP _____________________________________________________________

WED—ENTIRE PREMISES. Oregon and W s ibit smoking in any space “open to the public” suc as the rental office of the Premises or within 10 feet (OR) or such W ) of the entrances or windows of such public space. WA 25 feet (WA) R e to comply with the applicable law and require his/ Resident agrees h guests and visitors to comply also. her 5. OWNER/AGENT NOT A GUARANTOR OF SMOKE-FREE E ENVIRONMENT. Resident acknowledges that Owner/Agent’s ado adoption of a policy relating to smoking, and the efforts to designate al or some of the Premises as non-smoking, do not make Owner all or any of its managing agents the guarantor of Resident’s health or of the smoke-free condition of the non-smoking portions of the Premises. However, Owner/Agent will take reasonable steps to enforce the no-smoking policy. Owner/Agent is not required to take steps in response to smoking unless Owner/Agent has actual knowledge of the smoking and the identity of the responsible resident. 6. OWNER/AGENT DISCLAIMER. Res t acknowledges that Owner/Agent’s adoption of a non-s g environment, and the efforts to designate all or po e Premises as nonsmoking, does not in any way ard of care that Owner/Agent has under appli r Premises any safer, more habitable or imp lit standards d than any other rental premises. ic disclaims hav any any implied or express warranti ise have higher or improved air quality st her rental Agen cannot and d property. Owner/Agent r promise es will that the Premises free from sec . Resident acknowledges that Ow Agent’s abilit , monitor or ndum enforce this Addendum p ndent in g f p rt on voluntary ents’ guests. gu complia nts and residents’ Residents with conditi respi lergies or other conditions relating to smoke wner/Agent does not assume any higher are Owner/Agent th any other Owner/Agent d this Addendum than e reemen nd ental Agreement. N RESIDENT. EN Resident acknowledges that NT iding on the Premises under leases/rental prior to adoption of this smoking policy may not t to this smoking policy. As current residents n leases expire or enter into new leases/ nt e smoking policy will become effective for . ACH. Resident understands and agrees with the a d conditions cond terms and of this Addendum and that failure to adhere to th terms te any of the of this Addendum will constitute both a material non-comp non-compliance with the Rental Agreement and a serious violation o the he Rental R of Agreement. In addition, Resident will be responsible for all costs to remove smoke odor or residue upon any violation of thi Addendum. this c X If checked, the effective date of this Addendum will be SAMPLE _______________________________________ when the Premises is converting to nosmoking. If not checked, this Addendum is effective immediately.

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Upcoming Events with Multifamily NW

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MAIN OFFICE (IF REQUIRED)

Oregon Senate Passes Bipartisan Housing Legislation Multifamily NW: New bills take positive steps to address the housing aﬀordability crisis Salem, Ore. – The Oregon Senate approved bipartisan legislation that will address the housing affordability crisis increasing funding for subsidized housing, and providing new policy tools to local governments. Earlier the Oregon House passed a set of new renter protections with a strong bipartisan vote. Following the Senate vote, Multifamily NW, a nonprofit association represent-

ing owners and operators of both subsidized affordable housing and market-rate apartment buildings across the state, issued a statement from Executive Director Deborah Imse: “For weeks, we’ve been at the table with tenant advocates, affordable housing organizations, and local governments to craft effective solutions that address the region’s housing affordability crisis. In the

end, we’ve landed on a balanced approach that will provide more housing options for families of all incomes and help to reduce displacement. This legislation marks a significant step forward by adding to the housing supply, enacting common-sense protections for tenants, and increasing funding for affordable housing. “While these bills are meaningful, we need to remember that the conversation

doesn’t end here. Housing affordability is an ongoing challenge – and as an organization, our members are ready and willing to spend the next several months assembling the tools needed to build stronger and more stable communities. “

Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

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Rental Housing Journal Metro · March 2016

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Rental Housing Journal Metro

DEAR MAINTENANCE MEN: Water Heaters, Paint Prepping and Swimming Pools

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men: I just replaced a water heater and boy are they expensive! What are some tried and true ways to extend the life you a water heater or recommended preventive maintenance tips? Since I’m starting with a new heater I want to make this one last as long as I can. Fred Dear Fred: There are a number of things you can do to extend the life of a water heater, be it gas, electric, new or old. At least once a year, plan on flushing the tank to remove calcium deposits. First shut off the gas or breaker, let the water cool. Drain the tank and flush with a steady stream of water from the cold water inlet and let the water and debris drain from the drain valve until the water runs clear. If you have a 100 gallon or larger tank, use the clean out port to remove the calcium deposits. Removing the deposits keeps your water heater from working overtime. The more deposits in the tank, the harder the burner needs to work to keep the water hot. Equally important is checking the “Anode Rod”. The anode rod is a long sacrificial zinc or magnesium rod that protects the metal tank from corrosion. This rod should be checked yearly and replaced every 3 to 5 years. The rod can be found at the top of the tank and is held in place by a hex bolt head. To check the rod, turn off the water supply and let the water cool. With a wrench, turn the hex

bolt at the top of the tank and lift the rod out. If the rod is smooth and white in color, it is fine and can be reinserted ready to be inspected again in a years’ time. If the rod is corroded, brown, or looks like a rusted nail or missing all together; it is time to replace it. (Actually, it is well past time to replace it.) A new anode rod can be found at any plumbing supply house. If you have a low ceiling above the water tank, ask for a flexible rod to ease the installation. Smear Teflon pipe thread sealant on the threads of the new rod before you install it. Don’t use tape, since it can reduce the effectiveness of the rod. Keep in mind that replacing the anode rod on a regular basis (every 3 to 5 years) could easily double the life of your water heater.

Dear Maintenance Men: I am getting ready to paint my property and noticed a lot of mold or mildew in the shaded areas. I am worried that scraping these areas when we prep for paint will cause the mold spores to spread. What do you recommend we do as prep for painting? Marty,

FIND EVICTIONS STESSFUL?

Dear Marty: One item on your paint prep work will be finding the cause of the mold or mildew in this part of the building. Check for excess moisture in the ground, walls or even a poorly placed sprinkler head. Trim any bushes or trees that stop air flow continued on page 14

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Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

4Q15 Market Update ...continued from page 1 search settled on the simplest possible equation using two lags of the dependent variable and the rate of change of US payroll observations as independent variables. The 97.1% adjusted R2 (SE=0.4%) model predictably projects gradually slowing job growth in keeping with forecasted US conditions. Two percent or faster (20,000 to 30,000 jobs per year) growth is likely to be maintained through 2018. Occupancy Rate Summary Occupancy Rate (Reis) 95.0% RED 50 Rank 33rd Annual Chg. (Reis) -1.3% RCR YE16 Forecast 95.5% RCR YE17 Forecast 96.3% RCR YE18 Forecast 96.3% RCR YE19 Forecast 95.7% RCR YE20 Forecast 95.3% 4Q15 Absorption and Occupancy Rate Trends Portland apartment occupancy declined -130 basis points year-on-year to 95.0% in 2015, the worst performance among the RED 50 markets. Demand was not the issue — Reis report that renters absorbed 2,860 units in 2015, third largest annual total since 2001 — but supply was overwhelming. Developers delivered 4,551 units last year, representing the largest vintage recorded in 20 years. By contrast, Axiometrics surveys of larger, professionally managed assets posted a smaller –30 bps y-o-y drop, both among the universe of all surveyed properties (to 95.0%) and among the subset of stabilized, same-store assets (to 95.4%). The class-C segment maintained the

tightest market conditions (96.4%), while class-A succumbed to supply pressure, falling –130bps sequentially to 93.7%. Naturally, submarkets with the most active construction pipelines (Northeast, Northwest, Beaverton) suffered the largest occupancy losses, while the mostly classB-/C East Gresham submarket scratched out a small occupancy advance. RCR again used a simple model to forecast demand, giving added weight to PORT’s recent performance. With current payroll and T-1 inventory growth as independent variables, we specified a 95.0% ARS (SE=0.4%) equation that projects above historical average absorption through 2018, allowing Rose City occupancy to recover to 96.3% by YE2017. 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

$1,006 7.5% 4th 5.5% 4.9% 4.5% 3.9% 3.7%

4Q15 Eﬀective Rent Trends Rent trends went from strength to strength during 4Q15, topping the previous quarter’s 26-year Reis series record 7.1% year-on-year growth rate by 40 basis points. Rents increased $15 (1.5%) sequentially, down from seasonally stronger 3Q15’s $29 (3.0%) surge but superior to an $11 (1.2%) advance posted during the comparable period 2014; irrespective of negligible rent growth in the supply-heavy Northeast (0.0%) and lagging

Tigard (0.1%) submarkets. By way of comparison, Axiometrics surveys unearthed considerably faster rent growth. Stabilized, same-store property rents increased 13.1% y-o-y, down from 15.7% during 3Q15. Class-B was fastest for the 10thstraight quarter (14.4%), while class-A (10.0%) trailed. Only two submarkets failed to reach a 12% advance — Northeast (7.6%) and Northwest (5.0%) — in each case due to supply pressures. The current RCR PORT rent model uses only the first lag of the dependent variable; Baa-rated bond yields (-); the rate of Portland personal income growth (+); and the rate of change of RED 46 rent growth as independent variables. The 92.2% ARS (SE=0.7%) model projects exceptional 4.5% 5-year annual compound rent growth, ranking second among the RED 46; trailing only New York City (4.7%). Trade & Return Summary $5mm+ / 80-unit+ Sales 13 Approximate Proceeds $425mm Average Cap Rate (FNM) 4.9% Average Price / Unit $170,302 Expected Total Return 8.8% RED 46 ETR Rank 3rd Risk-adjusted Index 5.21 RED 46 RAI Rank 12th

4Q15 Property Markets and Total Returns Property sales activity was moderately slower during the fourth quarter as 13 priced transactions closed during the period for gross proceeds of $425 million. This compares to 18 transactions valued

at $640mm during the previous period. Moreover, sales in 1Q16 appeared to get off to a sluggish start as only five sales were recorded by the end of February. Slow sales velocity was largely attributable to a shortage of quality assets offered for sale rather than weakening demand. Owners of investment quality assets appear to prefer to further capitalize soaring rents before considering a liquidation of a precious core holding. By way of pricing, investment quality suburban properties were priced to mid4% to low-5% yields. The lone recent infill class-A transaction appears to have been priced to a materially sub-4% cap. ClassB/B– properties were priced to mid-5% yields and a handful of class-C or marginally located assets sold to high-5% to 6% going-in cap rates. In view of the supply/demand imbalance for PORT properties, RCR reduced the cap rate proxy from 5.2% to 4.75%. Even at this level metro assets offer an attractive 8.8% annual total return over a five-year hold, based on model derived occupancy and rent point estimates; ranked third among the RED 46. Above average rent volatility reduces risk-adjusted returns for which Portland ranks group #12.

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continued on page 15

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Earthquake Insurance ...continued from page 3 It predicted that the most dangerous impact at the 9.0 scale will be felt all along the Oregon coast and be particularly devastating to the coastal communities of Crescent City, California; Cannon Beach and Warrenton in Oregon; as well as the Moclips/Westport area in Washington. It will include a tsunami and the following impacts along the I-5 corridor. This major FEMA study also included significant details regarding the infrastructure impact of such a large earthquake: Electric power: Extensive electric power outages would be experienced throughout the region. Outages could last several weeks along coastal areas but most customers in other areas are expected to have power restored within 1 to 8 days. Natural Gas: Damage to both the transmission and distribution pipeline networks in the affected region could cause the majority of customers in western Washington and western Oregon to lose natural gas service. Many homes may lose all sources of heating due to the combined effects of natural gas and electric power outages. Telecommunications: Major undersea transpacific cables are likely to be severed; disrupting communication service to East Asia as well as between Alaska and the contiguous United States, with a two- to three-month expected restoration time. Transportation Fuels: A significant number of pump stations along the Olympic and Oregon Line refined-product pipeline system, as well as a substantial number of refined product terminals in the region, are expected to sustain considerable damage; the inability to store and distribute fuels locally is likely to have

a major impact on regional fuel supplies. Road Transportation: Significant damage to roads can be expected, particularly those along the coast and connecting the coast to the I-5 corridor. U.S. 101 is expected to suffer substantial damage due to both ground shaking and tsunami, resulting in a limited capacity to carry traffic for several months. Nearby coastal areas may be isolated for a short period. Water Transportation: Tsunami damage at the mouth of the Columbia River is likely to impact navigation and the ability to export agricultural commodities. Rail Transportation: Long-term rail traffic disruptions along the I -5 corridor and a complete loss of key rail bridges in the Olympia and Seattle area and downtown Portland are expected. Banking and Finance: Loss of major transpacific undersea cable capacity would affect transoceanic commerce, settlement, and transpacific financial market exchanges. Emergency Services: Widespread damage to police stations, fire stations, and hospitals along the coast is expected. Health Care: The potential of 15,000 to 30,000 casualties and the expected loss due to damage of 15-27 hospitals comprising 524-1708 regular beds and 60-228 critical bed facilities concentrated near the coast would be sufficient to saturate the excess capacity of other hospitals within a 250mile range of the worst damage. Water and Wastewater: Disruptions to potable water supply are expected with restoration times of three weeks to seven months with the greatest damage and restoration times occurring near the coastline.

It is clear that the impact for a 9.0 earthquake will affect many businesses. Many small companies, because they lack the financial resources to survive, will be put out of business. This will have a direct impact on residential and commercial investments since businesses leasing commercial space might fail due to a lack of power, fuel, and communications. If some commercial tenants fail due to the earthquake, then many people will be left without the income to pay residential rent with. I believe all properties should be covered by earthquake insurance. In that vein, we have included some tips to consider when shopping for earthquake insurance.

Understanding Earthquake Insurance

There are typically three (3) main parts of the basic earthquake coverage, your property coverage which covers your property up to a certain amount, called the limit; personal property coverage; and loss of rents coverage. Property coverage needs to be researched, as do deductibles. In Oregon, unlike California, there is no regulated coverage and only a limited pool of providers. Choose a company that is strong,rated by A.M. Best or check with the Oregon insurance commissioner. Note that earthquake insurance may not cover landscaping, pools, fences, masonry, and out buildings like storage or garages. If you rent or own a condo, you do not need this coverage as long as you make sure your association has the coverage. Loss of rents coverage should be on an ”actual loss guaranteed basis” and extend for at least 24 months, preferably 36

months(if you can find it). The longer the better since after a major earthquake you may have trouble finding tenants. Other coverages to consider include building code upgrade coverage or coverage for limited debris removal, land restoration, and emergency repairs. It is also important to know what your earthquake insurance policy does not cover. All insurance policies have exclusions. Have your insurance agent help you understand your policy. In general, earthquake insurance usually does not cover anything that your normal building insurance policy already covers. You definitely need to check with your insurance agent to confirm where fire and liability insurance leave off and where earthquake insurance kicks in. Common exclusions include: Fire: Even if an earthquake causes the fire, your building insurance policy covers fire damage. Land: Usually, earthquake insurance does not cover damage to your land, such as sinkholes from erosion or other hidden openings under your land. You may be able to buy limited additional coverage to restore or stabilize land. Vehicles: Earthquake insurance does not cover damage to your vehicles or your tenants’ vehicles. If you have a fleet of vehicles that might be damaged you may want to check into additional insurance. Flood: Even if you live near a lake that floods your home after an earthquake, water damage from floods, including those caused by a tsunami, are covered by flood insurance, not earthquake insurance. When purchasing earthquake insurance, you may need to buy on a secondcontinued on page 17

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Rental Housing Journal Metro

Commercial Real Estate Experts ...continued from page 1 some major markets, investors will still benefit from the strong income flows generated from new and existing leases. The fift h annual release of the joint report draws on the three organizations’ respective research and expert analysis and offers an objective outlook on commercial real estate through forecasts and commentary on the current economy, capital markets and commercial real estate property markets. A research-based assessment of the office, industrial, apartment, retail and hotel property sectors is also provided. “Historically low interest rates, especially in treasuries, combined with commercial real estate’s stable prices and value make this asset an attractive investment,” says Ken Riggs, president of Situs RERC. “Looking into 2016, the commercial real estate market should moderate, which could stabilize prices.” Vacancies are expected to continue to decline slightly in 2016 for all property types, except in the apartment sector, where they are forecast to increase modestly by the end of the year as more new project completions come onto the market. Continued job growth, demand exceeding supply and limited new construction (outside of multifamily) should lead to rising rents and steady investor re-

turns, which overall will shift away from capital appreciation as price growth levels off in many markets. Continuing on the same slow trajectory seen for many years, the U.S. economy – facing headwinds from a rising dollar, financial market volatility and geopolitical concerns – is forecast to grow at a rate of 2 percent to 3 percent in 2016, which is stronger than most global economies and enough to generate around two million net new jobs over the next year. Deflationary pressures related to low gasoline and energy prices are expected to diminish by mid-2016, in part because of robust growth in apartment rents. “Supported by solid hiring in most parts of the country, the demand for ownership and rental housing will continue to increase in 2016 despite another year of meager economic expansion,” says Lawrence Yun, NAR chief economist. “While supply shortages will weigh on housing affordability and push home prices and rents higher, the housing sector will keep the U.S. economy afloat and lead the residential investment component of GDP growth by up to 10 percent this year.” SOURCE National Association of Realtors

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Rental Housing Journal Metro

Rents to Flatten in 2016

fter years of record rent appreciation, Zillow’s rental forecast shows relief in sight for cashstrapped renters. • National median rent at the end of 2015 was $1,381, and is expected to increase slightly to $1,396 over the next 12 months. • The slowdown in rents means that, by the end of the year, they will be rising at a slower pace than incomes in many markets. • In December, home values rose 4 percent to a Zillow Home Value Index of $183,500.

Rent appreciation will level off over the next 12 months, slowing to an annual rate of 1.1 percent by December 2016, according to the new Zillow® Rent Forecasti. The national Zillow Rent Indexii at the end of 2016 is projected to be $1,396 -- compared

to $1,381 in December 2015. Zillow is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest

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growing metros had double-digit annual rental appreciation at the end of 2015. Zillow expects rental appreciation to slow down most significantly in Nashville, Tenn., San Francisco, Portland, Ore. and Denver. Rents in San Francisco saw 12.5 percent appreciation in 2015. Zillow forecasts rent in San Francisco will grow half as fast in 2016 -- 5.9 percent. Even with the slowdown, rents will remain unaffordable in many of the major markets across the U.S., especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40 percent of their income on a rental paymentiii. “Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Dr. Svenja Gudell. “The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.” The slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets. The Zillow Home Value Index rose 4 percent year-over-year in December 2015, to $183,500, according to the Zillow® December Real Estate Market Reportsiv.

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Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

Oregon’s House Bill 4143 and How It May Aﬀect You

f you have been following Oregon’s 2016 legislative session, you know that there have been two hotly debated bills brought before our elected officials that will have an impact on real estate. One being the Oregon’s new minimum wage increase which was signed into law by Gov. Kate Brown on March, 2nd 2016. The other being HB 4143 which addresses several topics having to do with rent increases and evictions. HB 4143 as of the writing of this article has passed the Oregon House and Senate and is expected by most to become signed into law by Gov. Brown. Law makers have added the following emergency declaration as the last piece of that bill making it effective immediately upon its signing. “This 2016 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is

declared to exist, and this 2016 Act takes effect on its passage.” Our firm has had many discussions over these two bills with the general public, property owners, and other real estate industry professionals and it is the opinion of most that the momentum was driven by historically low vacancies and rapidly rising rents. These trends were primarily effecting the Portland and Bend rental markets in recent years but have made their way down the Willamette Valley into the Salem-Keizer area. According to the speaker at an event I recently attended put on by the Salem Rental Housing Association, renters are becoming more organized. HB 4143 is the tip of the iceberg and is actually a combination of HB 4143/HB 4001. Ideas from both bills were combined to make them more palatable for law makers to pass. As

the calls grow louder and more frequent for tenant protections, Oregon’s law makers will undoubtedly be introducing more legislation in the coming years to appease their constituents. With the minimum wage scheduled to rise over the next several years many tenants will find themselves with additional income. Property owners that have been apprehensive to raise rents in lieu of scaring away their long term tenants may now find themselves more comfortable with the idea of moving their rents to current market values. For those owners, there are a couple of important items to factor in now that HB 4143 has passed with regards to noticing tenants including no rent increases within the first year of month to month tenancy and 90 day notice after that period. Also changing is the increase to 90 days notice for no cause evictions. If you are confident in your management abilities and enjoy the income these properties produce for you, I would encourage you to do a couple things. First would be to educate yourself. Make sure that you are up to snuff with changing landlord/tenant laws. If you are not well

versed, join a local association like Oregon Rental Housing Association. They have several local chapters throughout the state and can help you with the forms and knowledge that you need to protect yourself from liability. If you don’t have the time or desire to learn, seek the help of a professional management company. For owners who self-manage and are fed up with the increasing difficulties that new “tenant protection” legislation is creating, it is my opinion that now is the ideal time to plan your exit strategy and take advantage of a strong sellers’ market. In addition to the rents moving up, we are seeing a significant rise in property values for 2-4 unit multifamily properties in the Mid-Valley. Chris Salaz is Small Plex Broker at SMI Commercial Real Estate, LLC . Please contact Chris if you would be interested in receiving SMI’s free bi-annual newsletter which includes the most comprehensive rent and vacancy survey in the mid-valley, the SMI Apartment Update.

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Rental Housing Journal Metro

Dear Maintenance Man ...continued from page 8

EPA Cracks Down on Lead ...continued from page 1

or cause too much shade in these areas. The best way to remove the mildew safely is to use a power washer with a soapy solution that contains a mildewcide. Once the building is cleaned properly with the power washer, regular prep work can begin and the property painted.

cupants of pre-1978 “target housing” and “child-occupied facilities” receive information on lead-based paint hazards before renovations begin, that individuals performing such renovations are properly trained and certified, and that renovators follow specifically prescribed lead-safe work practices to reduce the potential for exposure to lead for all, including workers. Renovators are required to give the pamphlet to property owners and occupants within 60 days before starting a renovation. Housing providers, similarly, have obligations to notify residents prior to covered repairs and renovations, to share informational literature with them, including a disclosure form, and to be lead-safe certified or hire a contractor who is. To protect yourself and your investment, it’s important, that you assure the contractors you hire are in fact lead-safe certified and complying with the EPA’s safe work practice requirements. To learn more about what repairs are covered and what these work-safe practices are, visit http://www.epa.gov/sites/production/files/documents/renovaterightbrochure.pdf. The EPA reported that rough twothirds of the cases they recently settled involved failure to obtain EPA certification prior to conducting renovations. Over half the cases were related to violations of required safe work practice standards. The EPA states its aim in seeking penalties against RRP violators is to help deter other violations and to level the playing field for companies that do follow the law. Such fines and settlements help eliminate the financial advantage a violator may

Dear Maintenance Men: I have just purchased an apartment property with a swimming pool. The pool is in very poor condition and I am debating filling it in and putting in grass over the top. What is the procedure for filling in a pool? Rena Dear Rena: In our opinion a filled in apartment swimming pool is a good apartment swimming pool and an excellent use of dirt! First, before filling in a pool, check with your city or county, permits and procedures may differ. Drain all of the water out of the pool and pour concrete into the skimmer, main bottom drain and into any pipes leading into the pool. This will stop any water or creatures from using the pipes as a runway into the pool equipment area. If your pool is surrounded by concrete, try to save the water fill line into the pool, it can be used as a future sprinkler water line. Using a jackhammer, poke a number of holes in the bottom of the pool to help in drainage. These holes should be at least twelve inched wide and all the way through the pool bottom. Keep in mind the pool bottom can be a foot thick or more. Leave all the jackhammer debris in the bottom of the pool; it will help in future drainage. If your coping around the pool is in good condition, you can leave it, but we recommend that it be removed.

The coping can easily be detached by sledge or jackhammer. Just let the coping fall into the pool it will also help in drainage. One half to three quarters of the back fill material should be sand or gravel at the bottom of the pool. The balance of the fill should be clean dirt and topsoil level with the existing grade. Water the dirt as you back fill the pool to help in compressing the soil. The topsoil should be pack down with a tamper. Water the soil regularly for about a week, filling in any low spots. Seed or landscape as you wish after the soil has stabilized. Lastly, contact your insurance company and tell them the good news about your newly filled in pool, your rates might just come down a little. Bio: Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation Company www.BuffaloMaintenance.com www.ContactJLE.com www.Facebook.com/BuffaloMaintenance

get by underbidding competitors that are compliant. You can read the full EPA media release here: http://yosemite.epa. gov/opa/admpress.nsf/0/0D3D2DBE30561BAD85257EEB00698FC7 ‘Looking for a lead-safe contractor or want to become certified yourself in order to do work on your own properties? Call the Leadline for free information at 503/988-4000. A reminder that although lead poisoning is especially dangerous for kids, the fear of lead poisoning or liability does not give housing providers the right to deny or discourage families with children away from pre-1978 housing. Familial status is a protected class under federal fair housing law1 and doing anything to deny or discourage otherwise qualified families is illegal. Visit www.FHCO.org for more information on this topic. This article brought to you by the Fair Housing Council; a civil rights organization. All rights reserved © 2016. 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 www.FHCO.org for more information.

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Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

4Q15 Market Overview ...continued from page 9

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.

continued on page 16

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Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

Earthquake Insurance

...continued from page 10

ary market. Ask your insurance agent to scour the market and make sure that you are getting the best deal you possibly can. Don’t be surprised if the deductibles run from 15 – 25%. Consider how much cash you will have on hand to jump start a repair process. After a 9.0 earthquake it may take 6 – 8 months before the city will clear your building for occupancy. Earthquake insurance premiums vary depending on many factors, including the age of your building, the rent collected, the location, the kind of soil, the cost to rebuild, and the deductible. Don’t be shocked if it is expensive.

What else can you do to protect your property and manage your risk from a major earthquake? • Bolt the property to the foundation. • Brace any chimneys. • Strap water heaters to the wall. • Put in automatic gas shut-off valves. • Advise tenants to screw bookshelves and book cases into the wall. • Research the location of the property on a local hazard map to assess your risk. • Follow government issued earthquake proofing recommendations. • Reserve funds for earthquake proofing capital projects. • Tie the roof to the studs during roof replacements.

ning. We may not have the power to prevent the earthquake, but we do have the knowledge and technology to reduce the damages it may inflict. Even if you own one of the 20 percent of properties not affected, you still will be faced with the infrastructure problems such as a lack of power and telecommunications for days or weeks resulting in tenants unable to pay the rent. All buildings will be affected and all building owners need to prepare. The first step to mitigating your risk is to buy earthquake insurance.

Resources

The Oregon Resilience Plan https://multco.us/em/ oregon-resilience-plan The City of Portland Hazard Map: https://www. portlandoregon.gov/pbem/58572#maps Story: Historic Earthquakes, Teara: The Encyclopedia of New Zealand http://www.teara.govt.nz/ en/historic-earthquakes/page-13 The Really Big One: An earthquake will destroy a sizeable portion of the coastal Northwest, The New Yorker http://www.newyorker.com/magazine/2015/07/20/the-really-big-one Turbidite Event History—Methods and Implications for Holocene Paleoseismicity of the Cascadia Subduction Zone, U.S. Geological Survey http://pubs.usgs.gov/pp/pp1661f/ 13-year Cascadia study complete – and earthquake risk looms large, OSU News & Research Communications http://oregonstate.edu/ua/ncs/archives/2012/jul/13-year-cascadia-studycomplete-%E2%80%93and-earthquake-risk-looms-large Analytical Baseline Study for the Cascadia Earthquake and Tsunami, Department of Homeland Security https://www.bluestonehockley.com/ wp-content/uploads/2016/01/FEMA-earthquakestudy.pdf

• Tie the roof structure to the wall structure. The main recommendation in all documents regarding the impending Cascadia earthquake stress preparation and plan-

Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

sk The Secret Shopper Ready Vacants

hile market conditions remain strong, there may be times when you find yourself in a situation where you have no apartments to show. Maybe you don’t have a model or you’re in a make ready process with the vacant apartments that are available. Here is the question:

I know I shouldn’t show an apartment that isn’t ready, but I hate to ask someone to come back. Everyone is so busy I just don’t think they’ll make the time to come back for another visit. What can I do?

First of all, you do not have to show an apartment in order to rent one. While many people are “visual” and having a model or vacant apartment to show may seem like an advantage, it is not the only sales tool you have at your disposal. Here is what can happen when there is no apartment available to show: With a diagram of a 2 bedroom, the consultant “walked me through” the apartment as though we were inside. She used the terms “you” and “yours” during the entire “visual” tour. She pointed out the various storage areas, and also showed me the shelf and cabinet over the washer and dryer. The consultant used descriptive words like “oak cabinetry” and “spacious breakfast bar.” She mentioned the wood-burning fireplace and vaulted ceilings, and pointed out the fireplace and indicated where the ceiling begins to get

higher. The consultant also helped me visualize what type of furniture would fit in each room. When the apartment “presentation” was completed, the consultant walked me over to the location of the upcoming apartment. She pointed out and described the amenities we saw along the way and discussed the proximity of each one to the apartment. She indicated where I and my guests could park. Standing outside the apartment, the consultant pointed out other advantages to this location. She drew my attention to the private patio, nearby fountain and lush landscaping. She also mentioned the friendly neighbors upstairs and next door. Once the leasing consultant confirmed I was pleased with what I had learned about the apartment and community, she asked if I would like to put a hold on the apartment until it was ready to view. When I declined, she told me she understood my hesitation since I had not actually seen the apartment. However, she reminded me it was the only one she had coming available; without a deposit she couldn’t hold it for me. As I continued to hesitate, she told me my deposit would be fully refundable if I did not like the apartment once I saw it. As you can see, having no apartment to show did not hamper the leasing consultant’s ability to sell AND close the sale! In fact, it was quite the opposite: She became even more creative in selling her product! She had the opportunity to go the extra mile and “create a visual,” and she took

advantage of it. The prospective renter in this situation got a more comprehensive tour when there was no apartment available to show! Remember: You only get one chance to make a good first impression. Selling what you have to offer will increase your leasing ratio. Rather than demonstrating a dirty apartment or asking the client to come back, put your product knowledge to the test: Give a thorough presentation with whatever sales tools you have at your disposal, and then close the sale. Once you rent that last vacant apartment sight unseen, you will have the confidence to prelease all those upcoming notices . . .

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

Robinson Financial Group Colonial Life

“Making Benefits Count” Office: 503.557.4997 Fax: 503.557.1244 21780 Willamette Dr. Ste. B, West Linn, OR 97068

Rental Housing Journal Metro · March 2016

Rental Housing Journal Metro

Rents to Flatten in 2016 ...continued from page 12 Metropolitan Area

Dec. 2015 ZHVI

Dec. 2015 ZRI

ZRI Forecast for Dec. 2016

Forecasted Diﬀerence Between Dec. 2015 ZRI and Dec. 2016 ZRI

United States

$183,500

$1,381

$1,396

1.1%

New York/Northern New Jersey

$381,200

$2,384

$2,400

0.7%

Los Angeles, CA

$554,700

$2,491

$2,561

2.8%

Chicago, IL

$193,000

$1,633

$1,611

-1.4%

Dallas-Fort Worth, TX

$177,200

$1,500

$1,532

2.1%

Philadelphia, PA

$203,100

$1,558

$1,550

-0.5%

Houston, TX

$170,100

$1,579

$1,619

2.5%

Washington, DC

$357,800

$2,107

$2,118

0.5%

Miami-Fort Lauderdale, FL

$225,700

$1,822

$1,886

3.5%

Atlanta, GA

$160,000

$1,274

$1,280

0.5%

Boston, MA

$382,900

$2,247

$2,309

2.7%

San Francisco, CA

$785,800

$3,338

$3,536

5.9%

Detroit, MI

$121,800

$1,132

$1,128

-0.4%

Riverside, CA

$298,200

$1,691

$1,723

1.9%

Phoenix, AZ

$216,000

$1,249

$1,266

1.4%

Seattle, WA

$368,700

$1,931

$2,018

4.5%

Minneapolis-St. Paul, MN

$214,300

$1,500

$1,511

0.8%

San Diego, CA

$499,900

$2,316

$2,348

1.4%

St. Louis, MO

$141,000

$1,123

$1,115

-0.7%

Tampa, FL

$160,100

$1,296

$1,302

0.5%

Baltimore, MD

$242,300

$1,714

$1,702

-0.7%

Denver, CO

$320,800

$1,952

$2,031

4.0%

Pittsburgh, PA

$126,700

$1,090

$1,079

-1.0%

Portland, OR

$310,200

$1,689

$1,753

3.8%

Charlotte, NC

$157,800

$1,221

$1,250

2.4%

Sacramento, CA

$331,500

$1,599

$1,654

3.4%

San Antonio, TX

$148,000

$1,301

$1,306

0.4%

Orlando, FL

$180,600

$1,343

$1,373

2.2%

Cincinnati, OH

$141,800

$1,225

$1,243

1.5%

Cleveland, OH

$124,300

$1,124

$1,117

-0.6%

Kansas City, MO

$146,600

$1,199

$1,228

2.4%

Las Vegas, NV

$199,800

$1,212

$1,191

-1.8%

Columbus, OH

$150,900

$1,271

$1,289

1.4%

Indianapolis, IN

$130,100

$1,181

$1,138

-3.6%

San Jose, CA

$933,000

$3,431

$3,699

7.8%

Austin, TX

$242,900

$1,683

$1,741

3.4% Source Zillow

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Rental Housing Journal Metro

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Rental Housing Journal Metro · March 2016