Metro Rental Housing Journal July 17 by Professional Publishing, Inc

Rental Housing Journal Metro

July 2017

3. Fewer Renters Think it's a Good Time to Buy a Home 4. Proven SEO Tactics for Apartment Communities 5. RHA Oregon President’s Message

6. In an Urban High-Rise Apartment

10. Multifamily Spotlight 10

7. Cost of Freon for Older Air Conditioner Repairs is Skyrocketing

13. Top 3 Biggest Stressors for Property Owners and Managers in 2017

8. Why is the Internet in Apartment Complexes So Bad?

15. Q3 2017 Special Report - Amazon Steps Into Real World Retail

9. Property Management Leadership Requires Timely Information

6. Solving the Pet Pee Needs

www.rentalhousingjournal.com • Professional Publishing, Inc

Portland/Vancouver

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

Rent Control and No Cause Evictions Bill Dies in Senate

Colorado Springs Named Hottest Housing Market

ontroversial legislation to remove the state-wide ban on rent control in Oregon and to set new rules for no-cause evictions has died in the Oregon Senate, according to reports. The bill, HB 2004 , passed the Oregon House 31-27 in April, but lacked support in the more conservative Senate and failed after several attempts to amend it. The Senate Human Services Committee modified the bill to make it less punitive against landlords. The committee’s amendments reduced the circumstances under which landlords would have to pay relocation fees to tenants who were forced to leave at no fault of their own. The Senate

by Dow Jones Publication

...continued on page 5

By Myle sMa

olorado Springs is the country’s hottest housing market, according to a list published Tuesday by MarketWatch, a publication of Dow Jones & Co. The ranking is based on mortgage application data analyzed by ATTOM Data Solutions. Markets in Colorado and the Carolinas are drawing the most potential home buyers, according to data released recently by ATTOM Data Solutions. The property data company analyzed mortgage applications to create its “PreMover Housing Index,” a measure of the proportion of homes likely to sell in a market. The index is based on the ratio of mortgage applications that include an estimated loan settlement date to the number of homes in a given market. Mortgages that have a so-called “pre-mover” flag, like a settlement date, close within 30 days 62.2% of the time, according to ATTOM’s data. An index above 100 in a given market means an above-average ratio of homes will be sold there compared with the national average. ATTOM looked at ...continued on page 7 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

Current Economic Data Supports Multifamily Investments

he macro data suggests that multifamily investments and properties continue to be a strong performing asset class, says the CEO of a specialty investment bank focused on real estate, according to a release. Multifamily is still supported by strong economic fundamentals, generally outperforming most other property sectors, David Blatt, CEO of Capstack Partners says in the release. Lenders have recently begun to express caution about financing new multifamily investments because of concerns that there is too much

inventory. Many banks share the belief that the added supply will cause vacancies to increase and rents to drop, especially those lending into primary and high growth markets, which have been seeing the most investment activity over this last market cycle. PRSRT STD US Postage PAID Portland, OR Permit #5460

While it is certainly valid to monitor the volume and delivery pace of apartment inventory, banks’ views can often get distorted when their primary data source is their loan portfolio allocation, Blatt

says in the release. While lenders will naturally become more selective as they consider increasing their multifamily investments exposure, ...continued on page 10

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

Rental Housing Journal Metro

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Rental Housing Journal Metro · July 2017

Fewer Renters Think it's a Good Time to Buy a Home

new survey shows fewer renters think it is a good time to buy a home and they are not optimistic about the economy and their personal financial situation, according to a release. The National Association of Realtors (NAR) released the new quarterly Housing Opportunities and Market Experience survey showing how the morale of renters about buying a home has declined. "Paying more in rent each year and seeing home prices outpace their incomes is discouraging, and it's unfortunately pushing home ownership further away — especially for those living in expensive metro areas on the East and West Coast," Lawrence Yun, NAR chief economist, said in the release. Confidence among renters that now is a good time to buy a home continues to retreat Fifty-two percent of renters think now is a good time to buy, which is down both from last quarter (56 percent) and a year ago (62 percent) 80 percent of homeowners (unchanged from last quarter and a year ago) think now is a good time to make a home purchase. Younger households, and those living in urban areas and in the costlier West region are the least optimistic. The surge in economic optimism seen in the first quarter of the year appears to be short lived, according to the survey. The share of households believing the economy is improving fell to 54 percent

in the second quarter after soaring to a survey high of 62 percent last quarter. Homeowners, and those living in the Midwest and in rural and suburban areas are the most optimistic about the economy. Only 42 percent of urban respondents believe the economy is improving, which is a drastic decrease from the 58 percent a year ago. Dimming confidence about the economy's direction is also leading households to not have as strong feelings about their financial situation. The HOME survey's monthly Personal Financial Outlook Index showing respondents' confidence that their financial situation will be better in six months fell to 57.2 in June after jumping in March to its highest reading in the survey. A year ago, the index was 57.7.

"It should come as little surprise that the confidence reading among renters has fallen every month since January (64.8) and currently sits at its lowest level (53.8) since tracking began in March 2015 (65.7)," said Yun. Low housing turnover at the root of supply and affordability problems The survey also showed 71 percent of homeowners believe it is a good time to sell. But whether they plan to list their home for sale is another question. This quarter, 71 percent of homeowners think now is a good time to sell, which is up from last quarter (69 percent) and considerably more than a year ago (61 percent). Respondents in the Midwest (76 percent) surpassed the West (72 percent) for the first time this quarter to be the most likely to think now is a good time to sell. There is an apparent mismatch between homeowners' confidence in selling and actually following through and listing their home for sale. "There are just not enough homeowners deciding to sell because they're either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy," Yun said in the release. "As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth."

Rental Housing Journal Metro

"Perhaps this notable uptick in seller confidence will translate to more added inventory later this year. Low housing turnover is one of the roots of the ongoing supply and affordability problems plaguing many markets," he said. Under half of respondents believe homes are affordable for most buyers; one in five would consider moving In this quarter's survey, respondents were also asked about the affordability of homes in their communities. Overall, only 42 percent of respondents believe they are affordable for almost all buyers, with those living in the Midwest being the most likely to believe homes are affordable (55 percent) — and not surprisingly — West respondents (29 percent) being least likely to think homes are affordable. Additionally, 20 percent of respondents would consider moving to another more affordable community. Those earning under $50,000 annually (27 percent) and those age 34 and under (29 percent) were the most likely to indicate they would consider moving. "Areas with strong job markets but high home prices risk a migration of middle-class households to other parts of the country if rising housing costs in those areas are not contained through a significant ramp-up in new home construction," said Yun. In April through early June, a sample of U.S. households was surveyed via random-digit dial, including a mix of cell phones and land lines. The survey was conducted by an established survey research firm, TechnoMetrica Market Intelligence. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,711 household responses are represented.The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI)

Finding Investing Success in Today's Housing Market

Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Proven SEO Tactics for Apartment Communities

ou are most likely familiar with the acronym SEO, which, as you probably know, has long been defined as “Search Engine Optimization.” However, there’s a more recent movement that defines it as “Search Experience Optimization.” With this new outlook, the user is king. The mission of behemoth search engine Google is to deliver its users with an optimum search experience. In marketing apartments, it’s important to understand the fundamentals of this tactic in order to improve your community’s search visibility. On-page search optimization consists of several tactics including optimizing your content, adding title tags on all of your photos, implementing relevant H-tags (headers), and enhancing your meta descriptions with keyword-rich content.

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All of these factors will help build a solid foundation for an effective strategy. Of course, there are more technical tactics that you should discuss with your website developer, but here are a few basic tips to help you improve your user’s search experience.

Content is King Thanks to smartphones, humans now have a shorter attention span than goldfish. Researchers surveyed 2,000 participants and studied the brain activity 112 others to conclude that the human attention span has fallen from twelve seconds in the year 2000 to eight seconds. And goldfish? They have the attention span of nine seconds. But this doesn’t detract from the importance of content. Algorithms are smarter and more complex than ever before; therefore, from a search perspective, search engines can spot content that is not useful to search users. Google’s mission is to deliver the best possible answer to its searchers so if your website has inadequate content, you will not have a strong presence in search results. In other words, the more helpful content you write, the more Google (and other search engines) will consider your website as a credible source on that particular topic. SEO has changed dramatically over the past decade. Repeating keywords over and over again will not help you achieve a higher search ranking as it once did. This means no “keyword stuffing,” or overloading your webpage with keywords in your content. Consider your target audience while optimizing your webpage for one or two keywords. In short, keep in mind what your audience is searching for when they utilize search engines such as Google or Bing. It’s really all about understanding the psychology of the user: their wants, needs, and desires when they look up a topic online. When composing the content for your apartment community website, it is critical to implement the proper headline tag to represent different sections of webpage content. It can impact both SEO and the usability of your website. H-tags are sequential: the most important headline tag is the H1 tag and the least important is the H6 tag. It’s imperative to include a primary keyword in your H1 tag. So don’t skip it! Title Tags The next step in your on-page SEO strategy beyond freshly updated, keyword-rich content is to optimize the title tags on each page, meaning on the homepage and all of the website’s interior pages. Even though it may seem unnecessary, considering you just wrote detailed content, title tags are vital to both user experience and search engine optimization. According to Moz, “It creates value in three specific areas: relevancy, browsing, and the search engine result pages.” The best thing about title tags, unlike generating content, is that they are loweffort; however, they still effect SEO in a highly significant way. The optimal title tag length is 55-60 characters. Think of the title tag as a description of that particular page’s content. Although

...continued on page 13 Rental Housing Journal Metro · July 2017

President: Ron Garcia Vice President: Phil Owen President Elect: Mark Passannante Secretary: Lynne Whitney Treasurer: Sandra Landis

RHA Oregon President’s Message

Ron Garcia, RHA Oregon President

love the 4th of July. It is a day that really makes me proud to be an American. When I watch the fireworks it always makes me feel proud, yet humbled. It’s a great day to celebrate – but it’s also a lot more than just hot dogs, sparklers, and parades. It is about patriotism and sacrifice. As I reflect on what it means to live in a free society, I’m reminded of a suggestion that has been made by some, that our country should build a “Statue of Responsibility” in the San Francisco Bay

Past President: John Sage Office Manager: Cari Pierce

to compliment the Statue of Liberty in the New York Harbor. Personal freedoms ought to be exercised with respect and consideration. Just because we “can” do something, does not mean we “should” do it. It’s fair to be entitled – but it should be encouraged to be generous. I wish we all might take more stock of our duties, even if it means relaxing a bit on our rights. In other words: Sure - I get annoyed when I go through TSA checkpoints at the airport – but I appreciate the need to

contribute to the safety of our airways... I may hope that I’m not called for Jury Duty, but I still feel privileged and honored to fulfill the role of being on a panel of my peers. As a landlord, I want to make sure I get a good return on my investment properties – yet I appreciate the concerns of tenants who worry about their ability to maintain an affordable, safe and stable living environment. I understand that being a rental housing provider carries a responsibility beyond profits – and I am prepared and eager to adequately maintain the condition and habitability of my rentals and work to keep my good tenants for the long run, even if I am not always at “market rent.” Now, in the spirit of reflecting on our values and being of service, while having a good time in July, I am excited to remind you of the annual RHA Oregon “Starry Night Event.”

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

for charitable activities throughout our community. RHA Oregon has set the standard for community involvement for 90 years! Please join us for this fun event to “let off a little steam.” It comes at a perfect time of the year – since the State Legislators have finally sounded the gavel and closed their session. Now we can assess the impact they have had on our industry, and the influence we may have had in protecting the rights of property owners statewide. Starry Night is the time when we can casually network with one another at the same time we can unite as a group to make a difference for those less fortunate. I hope to see you there and, in the meantime, enjoy the fireworks!

On Wednesday July 19th RHA Oregon will host our 4th annual Starry Night gala at our annex at 10530 NE Weidler Portland, OR 97220. It is our association’s way of saying “thank you” to all of its members and vendors who make our organization great. And it is our way to raise money

Rent Control ...continued from page 1 also removed a provision to lift a ban on local rent control, according to koin.com. However, the proposal lacked support from the Senate’s 13 Republicans. The bill, called a tenant protections bill by advocates, was a chief priority for House Speaker Tina Kotek and several other Portland-area lawmakers. Sen. Tim Knopp, has said restrictions on landlords are counterproductive to solving Oregon’s shortage of affordable rental units and has advocated for measures that make it easier for investors to develop new housing units. Originally as passed by the House, the measure would have allowed cities and counties to enact local ordinances that would control how much landlords could raise rents each year, removing the statewide ban. Rep. Bill Kennemer, R-Oregon City, who is a landlord, also told Oregonlive. com when the bill passed the house that

HB 2004 is "a well-intentioned effort," but isn't the right approach. "This bill does not build a single apartment unit," he said.

The bill originally stated: “Prohibits landlord from terminating month-to-month tenancy without cause except under certain circumstances with 90 days’ written notice and payment of relocation expenses. Provides exception for certain tenancies for occupancy of dwelling unit in building or on property occupied by landlord as primary residence. Makes violation defense against action for possession by landlord. Requires fixed term tenancy to become month-to-month tenancy upon reaching specific ending date, unless tenant elects to renew or terminate tenancy. Requires landlord to make tenant offer to renew fixed term tenancy. Repeals statewide prohibition on city and county ordinances controlling rents.”

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 www.rentalhousingjournal.com

Rental Housing Journal Metro · June 2017

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

Upcoming Events for July 2017 Strengthening Front Line Skills for Maintenance CAM: Resident Experience HR Issues: Employee Coaching SOLD OUT - It's the Law: Smokin’ Hot: Marijuana and Your Rights Forms and Notices: Move In CAM: Industry Essentials & Financial Management Understanding Maintenance for Managers EPA Lead-Based Paint: Renovation, Repair - REFRESHER REAC/Preventative Maintenance Training Landlord Study Hall: FED’s From Filing to Lockout Landlord Tenant Law Part I NSPF® CPO® 2 day Certification Class CAMT: Interior/Exterior Fair Housing 101 HR Issues: Employee Separation It's the Law: FEDs: Mastering the Evictions Process Handling Environmental Issues (Asbestos, Lead, Mold) Landlord Tenant Law Part II

Partial Rent Payment Receipt – Form M009 OR OREGON

PARTIAL RENT PAYMENT RECEIPT IP DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ __ ___ RESIDENT NAME(S) ___________________________________________________________________________

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

____________________________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ __

___________________________________________________________________________

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

____________________________________________________________________________ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

and all others. UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ CITY ___________________________________________________________________________________________________________________________________________________ STATE TAT TA AT ___________________________________ ZIP _____________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ __ STA ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

Resident understands that Owner/Agent is not required ired to accept ac late ate or partial p l payments paymen of rent. Resident has asked Owner/Agent en agreement to pay the balance to accept a partial payment along with Resident’s nce due. Owner/Agent is willing to do so as an accommodation to Resident. Resident understands partial payment and the payment agreement does not erstands that hat accepting the t waive any of Owner/Agent’s rights to terminate nate Resident’s Reside ’s tenancy if payments are not made as agreed.

SAMPLE

Rent amount due:

Partial payment received:

SAMPLE

SAMPLE $_______________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ __ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ __ SAMPLE ($__________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ ___ ___ __ __ ___ ___ __)

Rent balance due:

SAMPLE $__________________________________ ___ __ ___ ___ ___ ___ ____ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

Late fees:

SAMPLE $_______________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ ___ __

SAMPLE SAMPLE __________________________________________________________________________________ $_______________________________ Other:____________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ Balance due:

SAMPLE $__________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

Residentt agrees to pay the balance due du as follows:

SAMPLE

DUE DATE

AMOUNT

______________________________________

SAMPLE

SAMPLE $_______________________________

______________________________________

SAMPLE

SAMPLE $_______________________________ _ __

SAMPLE

SAMPLE $_______________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

______________________________________

All payments must st be rec received by Owner/Agent by 5:00 p.m. on each due date, e, time e being of the essence. ence All payments must be made by money order or cashier’s check. If Owner/Agent has not yet served a 72-hour or 144-hour termination notice of the current otice for non-payment non-paym curren rent due, acceptance of the partial payment does not waive Owner/Agent's right to issue such noti n or af e date a notice on after the allowed by statute for the he ttermination mination date on ssuch notice e or the payment date agreed balance of the rent due. If payment is not made by the later of the ce an ev ion action. above, Owner/Agent may terminate the tenancy and commence eviction of the current rent due, acceptance mination notice notic for non-payment non-pay If Owner/Agent has previously issued a 72-hour or 144-hour termination of this partial payment does not waive Owner/Agent’s right ght to t terminate minate based on o that notice if Resident fails to make any payment required above by the due date. No new 72-hour or 144-hour notice fails to make any payment due tice need be given g n if Resident R hereunder. The signature of any one Resident to this agreement binds inds all Residents of the e unit.

SAMPLE

_____________________________________________________________________________________

SAMPLE

_ __ _____________________________ ___ __ ___ ___ ___ ___ ___ __ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

RESIDENT

SAMPLE

_____________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __

RESIDENT

SAMPLE

_ __ _____________________________ ___ __ ___ ___ __

RESIDENT

SAMPLE

_____________________________

DATE

SAMPLE

______________________________________________________________________________________________________________________

ADDRESS

DAT DATE A E AT

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

_____________________________________________________________________________________

OWNER/AGENT

DAT DATE A E AT

SAMPLE

_____________________________________________________________________________________ ___ __ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ __ _ __

7/11/2017 7/12/2017 7/12/2017 7/14/2017 7/18/2017 7/27/2017 7/27/2017 7/31/2017 8/1/2017 8/2/2017 8/7/2017 8/8/2017 8/8/2017 8/9/2017 8/9/2017 8/11/2017 8/16/2017 8/21/2017

SAMPLE

______________________________________________________________________________________________________________________

D DATE

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

SAMPLE

_____________________________

RESIDENT

SAMPLE

SAMPLE ON SITE

SAMPLE

______________________________________________________________________________________________________________________

TELEPHONE

DATE

RESIDENT

MAIN OFFICE (IF REQUIRED)

It seems obvious that allowing a resident to pay just a portion of the actual monthly stated rent is a practice not in the best interest of the landlord. Surprisingly, it can be an all too common occurrence for a landlord to cash that partial payment. By accepting a partial payment, the landlord gives up the right serve a 72-hour notice for non-payment to enforce the rest of the rent payment. If a landlord does accept a partial payment, it is best to utilize the Partial Rent Payment Receipt that provides the additional payment schedule and necessary verbiage that allows the landlord to pursue a non-payment of rent termination should the tenant fail to complete their full rent payment obligations.

Solving the Pet Pee Needs By John Triplett

In an Urban High-Rise Apartment

provides San Diego high rise dog owners with a fresh grass pee patch delivered to the door. In addition, a member of their team returns in person to clean and replace the grass on a weekly basis. Founders Oscar Urteaga and Tricia Crespin started 92101 Dog Solutions less a year ago, and it has rapidly grown. In addition to servicing all the communities in downtown in the 92101 zip code, they also serve the 92102, 92103 and 92014 zip codes, including the neighborhoods of North Park, Bankers Hill, Golden Hill and Hillcrest.

ow to solve pet pee needs in the middle of the night when you live in a high-rise apartment can be a real challenge. A San Diego start-up company has come up with a unique product that helps both property managers and tenants. As an individual living in a high rise condo or apartment, one can imagine how difficult it can be when your pet needs to go out to pee in the middle of the night. Tenants don’t have the option of opening the back door to a large grass backyard. It requires getting dressed, leaving the unit, going in the elevator, and eventually outside. In a city like San Diego that is embracing and 6

building denser multifamily housing, moving from suburban environments to urban neighborhoods creates issues and difficulties for dogs and their owners when they need a grassy spot. Some dogs handle the adjustment to high rise living without incident. For others, it can be a challenge.

Solving the pet pee needs in apartments A new start-up company in San Diego has come up with a unique approach to pet pee issues that offers property managers and tenants the “backyard alternative for high rise living pooches.” 92101 Dog Solutions is subscription service that

Here is Urteaga’s story on how it got started “I met Tricia, my business partner and co-founder, shortly after she moved to San Diego from Arizona and brought her elderly dog with her. The dog had a heart murmur and had to take medicine that caused the dog to frequently urinate. “Living in high-rise condo in East Village, she was having to get up multiple times in the middle of the night, take him to the elevator, then downstairs outside where there were a lot of homeless people and it was not necessarily safe to take out the dog,” he said. “So I recommended to her some different products. Most were dog pee trays you can buy at pet stores and online. We tried every product and service we could find, and nothing met our expectations, and the dog did not utilize it at all. “One day we decided to buy a piece of sod and put it on one plastic tray. Given the texture and scent of real grass, the dog ended up going potty immediately. We realized that we needed real grass to curb the dog’s bathroom needs,” he said. “Unfortunately after a couple days of use, it started attracting some flies. Tricia’s brother worked on a farm in Washington State and we collaborated with him to formulate a deodorizer - we call it the, ‘secret sauce’ to reduce smells and flies. We can’t say what is in it, but we place the deodorizer under the grass to absorb all the liquids, prevent flies and it doesn’t smell. “After much trial and error to develop our own real grass pee patch, our

friends and neighbors started to inquire how to get one of their own and at that moment we realized we had a business idea,” he said.

How do property managers and leasing agents feel about this? “The property managers and leasing agents we have interacted with support our service because they see it as a way to help keep their existing units clean and prevent damage caused by dog residents,” Urteaga said. “Unlike our competitors that just provide a product, our business is unique because we actually service and replace the grass patch. The grass patch has a five-layer system, so no liquids make it through to the floor or carpet. “You would be very surprised, but some of our customers - the first time we walk into their unit and all they had put down newspapers and pee pads. It was pretty gross. So we believe 92101 Dog Solutions helps property managers and leasing agents keep their units much cleaner with residents that have dogs,” he said. “Our business is nothing new. We are not reinventing the wheel,” Urteaga said. “What we did was we saw a need and a demand. We looked at some existing services and products that are out there and we figured out a way to make it better,” he said. He said right now they only service San Diego and will soon be announcing plans to expand their service offerings to include a full service dog concierge list of amenities, such as dog walking, dog sitting and vet appointment pick up/drop offs. “Before we decided to pursue 92101 Dog Solutions as a legitimate business, we looked at the market and numbers. We found that in the 92101 downtown zip code, there are approximately 35,000 residents, and about one-third of them have pets, mostly dogs. One of the biggest downsides of living in downtown San Diego is that there is not a lot of grass space and open parks. There are very few open parks or dog parks to allow these animals to do their business. So that is the demand we had identified. “This service

...continued on page 12 Rental Housing Journal Metro · June 2017

Rental Housing Journal Metro

Cost of Freon for Older Air Conditioner Repairs is Skyrocketing In air conditioner repairs, owners face the challenge of whether to repair or to replace a system using R22 refrigerant from both a financial and environmental perspective, according to the release. “We are seeing the cost to repair older air conditioners needing additional R22 refrigerant increase by 300 to 400 percent, and that cost is only expected to increase as summer continues,” Dave Moody, Vice President of Marketing and Customer Engagement for Service Experts Heating & Air Conditioning, said in the release. Air conditioner repairs or

ir conditioner repairs this summer will come with skyrocketing costs for the refrigerant R22, more commonly known as Freon™, according to a release. Production of R22 refrigerant, which is being phased out by the Environmental Protection Agency because it contains environmentally harmful ozonedepleting substances, has already dropped by 90 percent. Production will be prohibited by 2020.

upgrade? “The repair cost increases are helping drive many owners to upgrade to a new air conditioning system to be comfortable, as they can also save up to 50% on energy bills right away.” New air conditioning systems use the more environmentally friendly R410A refrigerant, a different refrigerant that cannot be mixed or used in an existing air conditioner or heat pump designed for R22. Currently, reclamation and recycling of R22 is expected to be sufficient for existing systems, albeit at a much higher cost, providing time to upgrade systems before the phase-out period, according to

the release. “Owners don’t have to replace their entire system now, but it’s helpful for them to know their options in this situation,” Moody said. “It’s important to know you can’t mix R22 and R410A. When a new R410A system is installed, the outdoor equipment and outdoor coil both need replacing, and the interconnecting refrigerant tubing needs inspecting. These newer systems are often far more energy efficient and can significantly save on energy costs, sound pollution, or even utilize alternative energy sources like solar energy.” The average life-span of many air conditioners is 8 to 10 years, which will help determine the cost benefit of either paying the premium price for R22 to repair older systems, versus upgrading. Additional benefits to upgrading include the opportunity to take advantage of energy rebates being offered and improving a resident’s efficient use of energy. New equipment will also have longer warranty periods, quieter operation, and the peace of mind of a more ozone-friendly refrigerant, not to mention greater home comfort through more advanced technology.

Service Experts Heating & Air Conditioning locations have been serving their communities with air conditioning and heating repair, maintenance plans and new system installation for decades, and the average age of their service centers is over 50 years. Headquartered in Plano, TX, Service Experts is one of North America’s largest heating and air conditioning service companies with 90 locations across 29 U.S. states and three Canadian provinces.

Colorado Springs ...continued from page 1 120 metropolitan areas that had at least 100,000 single-family homes and condos. Those that scored the highest combined affordable homes with access to jobs, said Daren Blomquist, senior vice president of ATTOM. An index above 100 in a given market means an above-average ratio of homes will be sold there compared with the national average If you’re looking to buy in one of these markets, competition could be fierce. It may help to get preapproved for a

mortgage and to pull your credit to make sure there’s nothing on your report that will bog you down. Take a look at this list of the 15 areas with the highest PreMover Housing Indices.

Rental Housing Journal Metro · July 2017

This article originally appeared on Credit.com.Colorado

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Rental Housing Journal Metro

Why is the Internet in Apartment Complexes So Bad?

An Educational Series for Apartment Owners: Part 1 “Modem Service” Can a Multifamily Internet System with WiFi Installation be the Ticket?

busy, always connected lifestyle demands the Internet. So much so the FCC, in a 2016 ruling, deemed the Internet a utility and it will be regulated as such. Regardless of government policy, the fact remains, access and experience are extremely important to consumers. Internet, as a utility, is an important distinction in today’s marketplace. Most Internet users experience a “Dirty City Water” Internet experience because it’s poorly maintained and rarely managed by monopolistic Internet Service providers (ISP’s ) – leaving a bad taste in the consumer’s mouth. Most agree the Industry needs improving; just as there are quality options for drinking water in the market, there are quality options for Internet. A “Glacier Water” Internet experience stands apart from typical Internet offerings for the residents, simultaneously generating revenue, increasing brand loyalty and maximizing retention for an apartment owner.

Comparing “Dirty City Water” to “Crystal Clean Glacier Water” is like comparing “best-effort” Cable Modem or DSL services (a.k.a. Modem Service) to a professionally managed, highly reliable, Fiber Backed Property-Wide WiFi service (a.k.a. Pure Internet). When a network is installed and managed correctly, the true essence of “Pure Internet” can be achieved; if not, the likely experience is the status-quo (or worse) that plagues American Internet services today. Most have always known they’re paying too much for an inconsistent, inferior service and it’s no secret “Big Box” Internet Service Providers (ISP’s) are often ranked last in customer surveys. What’s not as intuitive is why.

The 4 pillars to “Dirty City Water” (Modem Service) Pillar 1 - Bandwidth: Calculating Internet speeds are often misunderstood by consumers. The industry has done a fabulous job of masking what’s important in achieving true speeds and a pure Internet experience. A) Internet Speeds: Bad news! Buying more Mbps (Megabits per Second) seemed the answer to faster Internet speeds but that’s not exactly true.

Purchasing more Mbps buys capacity not speed. Speed, how we comprehend it, is perceived in distance; like with miles per hour (MPH). Contrary to most beliefs, Internet speed is more accurately expressed as latency. Lower the latency, increase webpage load times. Isn’t that what we are looking for? Picture the Internet like a freeway; purchasing more Mbps buys you more lanes not a higher speed limit. Unknown by most, your lanes still move at the speed of your latency regardless of how many lanes you buy. Latency is something most ISP’s won’t discuss. They cannot control, manage or sell lower latencies effectively; instead they sell you more “slow lanes” of capacity. “What’s important to note here, and this confuses a lot of people, is that your internet isn’t any faster from 1 Mbps to 5 Mbps, or however much bandwidth your connection has. Your data is just transferred to you at a faster rate because more data can be sent at the same time. It’s more efficient, making your internet perceptually faster, not technically faster.” Your true Internet speed is the relationship between bandwidth (how much) and latency (how fast) – not just bandwidth alone. B) Oversubscription:

Modem Services are notorious for oversubscription ratios that routinely surpass 100 to 1. Meaning, 100 people are sharing the same allocation of bandwidth on the same “Internet pipe”. There’s nothing inherently wrong with oversubscribing bandwidth; most people aren’t fully utilizing their bandwidth. Further, it increases the cost efficiencies of a network. However, when oversubscriptions are high, it causes peak period slow-downs for end-users. One hundred (100) households with 5 devices or more, all sharing the same internet pipe, is simply too much. C) Symmetrical Speeds: Many forms of Internet, namely modem services, have asymmetrical speeds. This means higher downloads speeds than upload speeds. It’s common to see a 10to-1 ratio. This can be a problem for live communication applications; like video streaming (e.g. Skype), VoIP or chat. If you are “... running any real-time applications like Microsoft Office365, VPN, VoIP, video conferencing, web conferencing, and/or you have a need for large file transfers, you will benefit from high speeds in both directions…” A growing number of businesses facilitate remote work from home. Hence, the virtual work ...continued on page 11

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Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Property Management Leadership Requires Timely Information

echnology continues to connect us faster and from greater distances, until time zones and the miles between us no longer matter. These changes are happening at a blistering pace and timely information is allowing property management leaders to operate their companies and their properties with a new set of rules. Thomas Friedman, author of “The Lexus And The Olive Tree” says, “the future will require a complete integration of capital, technology, and timely information for leaders to lead”. As a property management professional, are you ready to be a leader of the future? Reviewing some powerful statistics: Given the rapid pace of technology and innovation it’s important to realize just how fast information and ideas are reaching us, with the tap of a keystroke. Here are some powerful statistics about today and the future: 1. It took commercial radio 38 years to reach an audience of 50 million, it took 13 years for television, but the Internet only took five years to grow this large. 2. According to the Cisco Visual Networking Index global IP traffic will reach 1.1 zettabytes per year, global IP traffic has increased fivefold over the past five years, and will increase threefold over the next five years, twothirds of all IP traffic will originate with non-PC devices by 2019, and

broadband speeds will more than double by 2019. 3. 92 percent of North American Internet users currently research travel arrangements online. 4. An MBA at Duke, Purdue or Syracuse University can be earned by taking online classes. 5. E-commerce will continue to double, over the next 24 months.

Tip From The Coach: As a property management professional, do the above trends surprise you? Are

you and your property management teams leveraging these trends for your competitive advantage? Remember, with the pace of technology, only the leaders who embrace this rapid pace will survive and thrive into the future! Leading-edge uses of technology and information: Many of our property management clients are using the statistics above to create some very innovative ways of applying capital, technology and timely information. Here are some examples:

1. Property management companies are using comprehensive internal websites [intranets] and the cloud, to maximize the flow of information and ideas within their company. In addition, our property management clients are linking their marketing information to the intranets of their corporate clients. 2. Leading property management companies are offering their residents WiFi Internet access and smartlycrafted resident portals. 3. Our clients have specifically designed their websites to capture the E-mail addresses of prospective future residents, for free future permissionmarketing. 4. Apartment communities are leveraging their online forms/access for handling maintenance requests and other resident services plus tracking levels of response time plus completion satisfaction. 5. Progressive companies are adding Chief Knowledge Officers to mine great ideas, share best practices, develop leading-edge technology and communicate strategic plans. 6. Our property management clients are conducting training and sharing realtime communication with their teams using a variety of training platforms. ...continued on page 18

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Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Multifamily Spotlight

Vacancy Up Due to Elevated Class A Deliveries; Rising Rents Point to Positive Momentum Marcus & Millichap

he national apartment vacancy rate increased in the first quarter due to a combination of high Class A construction deliveries and historic fourth quarter absorption weakness being pushed into the first quarter. However, a 4.1 percent rise in the overall average rent and 242,000 units absorbed over the past year point to the underlying strong demand drivers for multifamily. Sharp rise in Class A vacancy. Negative net absorption of 11,000 units and 77,000 apartment deliveries raised the national vacancy rate to 4.4 percent from 4.2 percent a year ago. The new units contributed to a 120-basis-point jump in the Class A vacancy rate to 6.6 percent. Some of the largest increases in Class A vacancy occurred in Atlanta, Chicago, Denver and Los Angeles, metros with elevated completions. Yet, Class A rents rose in all markets, except in New York City and Houston. Owners have anticipated the rising supply of new Class A units and instead of lowering asking rents they are holding firm on pricing in preparation for the spring leasing season, which historically has the highest absorption for the year. Slight Class B vacancy uptick caused by jump in the South region of the

country. The delta between Class A and B property rents is the smallest in the South. With select newly delivered units offering concessions to aid lease-up, some Class B tenants have been able to make the jump up to Class A units with only a small increase in their monthly rent. The Class C vacancy rate decreased over the past year, reflecting the strong demand for affordable rentals. Pause in apartment investment evident in first quarter. Potentially higher borrowing costs, along with proposed changes to fiscal policy and the tax code, have raised uncertainty that influenced investor decisions. Preliminary first quarter estimates place multifamily property sales down 15 to 20 percent from the corresponding period in 2016. Although the pause in transactions is significant, it should be noted that sales last year were near record levels. Greater clarity on the range of economic, tax and fiscal policy changes could spark renewed investor activity. Steady economy underpins 2017 market. Job growth in the first five months of 2017 equaled growth seen in 2016 and provides momentum for steady rental demand this year. Apartment construction will likely peak in 2017 with the delivery of 370,000 units. Nearly half of the total, however, will be delivered in

10 markets, potentially creating pockets of elevated vacancy rates in metros including Dallas/Fort Worth, Houston and New York City. Economic drivers support the absorption of more than 290,000 units this year and a rise in the national vacancy rate to the low-4 percent range. Following an advance in the first quarter, the average rent remains on track to rise 3.8 percent. Jay Lybik Vice President | Research Services For information on national apartment trends, contact: John Chang First Vice President | Research Services Tel: (602) 687-6700 john.chang@marcusmillichap.com

Multifamily Investments ...continued from page 1 it’s critical that they rely on a broader dataset to ensure attractive multifamily lending opportunities are not overlooked. The most prudent lenders also rely on historical and economic data to help guide their capital allocation decisions, according to the release. Current economic macro data supports multifamily investments For instance, while the national vacancy rate for multifamily property is projected to increase to 5.6% in 2017 and to 5.7% in 2018, according to CoStar Group, these figures are still below the 15-year average vacancy rate of 6.1%. •

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Meanwhile housing starts are at a historic low. Fewer homes are available for sale than in any previous cycle and the cost to build is climbing, especially with the recently implemented tariffs against Canadian softwood lumber imports. • Additionally, the recent and continued rise in interest rates make it more challenging for people to purchase homes. • All these factors will redirect prospective buyers back into the rental population, helping multifamily maintain its status as a safe and stable asset class. “In high growth markets, we check the apartment inventory data against fundamental economic drivers like growing industries and labor force,” Blatt said in the release. David Blatt, CEO of Capstack Partners “We look to structure our clients’ debt and equity financing to be stable

enough to handle momentary ebbs and flows in the cycle. This allows developers and operators to zoom out and focus on executing a fundamentally sound investment strategy based on drivers like jobs and population growth,” he said. Multifamily is largest asset class in real estate investing Multifamily is the largest asset class within real estate investing. When high profile institutions actively build then sell in the short-term, and lenders begin to murmur about too many apartments, it is important for private investors to remember that buying and building rental properties isn’t a market timing game. Rather, it is about managing and locking down your property operating and financing costs, increasing your rental revenue, and enjoying the appreciation of your investment over time. CapStack Partners is a specialty investment bank focusing on the real estate, hospitality, infrastructure and energy industries. Founded and led by capital markets expert David Blatt, CapStack provides a full range of investment banking services including project financing, private placements, mergers and acquisitions, loan syndications, workouts and dispositions, and strategic advisory. CapStack’s diverse range of clients include private and publicly traded companies as well as universities, not-for-profit institutions and municipalities.

Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Internet So Bad ...continued from page 8 force is rapidly growing; it’s imaginable to see a majority of the workforce working remotely in the future. D) Privacy: Make no mistake your Internet habits are being monitored, recorded and stored. With recent Internet laws being passed, it’s now legal for ISP’s to collect and sell “ALL” of your browser history and other relevant data. IT professionals can dodge this; however, for the rest of us, prepare to share your online habits with your ISP.

Pillar 2 – Management: A) Dirty Data: Modem services are a WIDE OPEN pipe from the Internet to your home. This means that hackers have the ability to penetrate your network; the only obstacle is your $60 router from Best Buy, configured and managed by you. The “average Joe” is expected to configure their router in an attempt to protect against these professional hackers. Managing a network at this level is not for the faint at heart, yet we have been relegated to “figuring-it-out.” Millions of Americans are “on-their-own” which creates legitimate risks and concerns. B) Customer Support: Unfortunately support from most “Big Box” companies only exists to maintain THEIR wiring and equipment. If they confirm it’s not THEIR fault, you’re on your own. In some cases, you may find they offer expensive network support to help guide you through the perils. However, most ISP’s simply confirm the signal to your modem and don’t support it further. A perfect storm of bad

equipment, bad wiring, monopolistic attitudes and profit-first philosophies fuel this lackluster and inept support experience. In the end, customer support falls short of par for most ISP’s. “…Without competition, there's no incentive for internet providers to improve infrastructure. These massive telecom companies create a bottleneck in the last mile of service by refusing to upgrade critical infrastructure. And they can charge exorbitant prices for the subpar service while they're at it.” C) Best Effort Service: Unfortunately, most Americans are relegated to “Dirty City Water” because they have “best effort” modem service as their primary residential connection. Somehow the industry has thrived by offering lowest-common-dominatorservices. They even named it similarly, “Best Effort.” The ISP is saying they will try their best to provide what you paid for. Only, there are no Internet-qualitypolice to hold them accountable. Worst yet, there’s often a monopoly or duopoly which creates very little incentive to improve quality of service and customer support. That’s why the industry’s biggest providers are routinely voted the most hated in the U.S. Security: You are on your own in terms of security. Relying on virus protection or your operating systems firewalls can certainly help stop certain types of online threats. However, you are still in grave danger from hackers. Without professional management the network is left with a “Mom and Pop” security environment that lamely attempts to

thwart determined threats. A study by CNET.com stated… “… all [14 top home routers] had critical security vulnerabilities that could be exploited by a "remote adversary" and could lead to unauthorized remote control of the router.”

Pillar 3 – Design/Configuration: A) WiFi Installation & Design: In a small space it may appear like WiFi design doesn’t really matter – there isn’t enough square footage to cause coverage issues, right? Not exactly, the WiFi radio frequencies (RF) from neighboring routers are all fighting for the same limited air space, with zero synergy. This is compounded in a multifamily environment; more WiFi interference means slower connections and decreased security, effectively creating a hodgepodge design that is counter-productive to “Pure Internet”. B) Configuration: Configuring a home router may seem intuitive if you know the basics. However, your home network is inherently disadvantaged because of the limitedfeature-set found in a home router. They usually don’t include enterprise firewalls, bandwidth shaping, black lists and interference mitigation. The lack of features vastly limits proper security. Even if an enterprise router was used, the weakest link is still the novice home network engineer. A BBC article titled “How easy is it to hack a home network?” puts novice configurations and home networking blunders into perspective. “I found out just how severely

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compromised my home network was in a very creepy fashion. I was on the phone when the web-connected camera sitting on the window sill next to me started moving. The lens crept round until it pointed right at me. I knew that the attackers were on the other end watching what I was doing, and potentially, listening to the conversation.”

Pillar 4 – Equipment & Wiring: A) Competition: It’s all about the bottom line, thus your local ISP plans on using their antiquated wiring infrastructure for as long as possible. Most ISP’s enjoy monopolistic environments. They won’t ordinarily upgrade unless there are extenuating forces. For example, in Google Fiber territories, local ISP’s magically upgraded their fiber infrastructure to compete. Googles expansion has since come to a halt. Google knows if they expand to new cities the local incumbents will simply ramp-up services in that area. Atlanta is the perfect example -- 99% of the country is not so fortunate to have a turf war driving down prices and forcing fiber upgrades. With little to no competition there’s no incentive to upgrade wiring and cannibalize profits. Unless something changes, most of America will have to wait for fiber -- hunker down and get used to antiquated wiring for decades. B) Antiquated Delivery: Bandwidth delivered over coaxial or copper wire is outdated, and, by association, the entire delivery process has ...continued on page 12

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Rental Housing Journal Metro

Internet So Bad ...continued from page 11 technological bottlenecks. Your delivery is only as strong as the weakest link. Even with fiber-to-the-home (FTTH), your bottleneck may still be the wiring inside the home, fiber media convertor, router or modem. There are many places the delivery could be bottlenecked when dealing with old wiring. “Most of America's telecommunications infrastructure relies on outdated technology, and it runs over the same copper cables invented by Alexander Graham Bell over 100 years ago. This copper infrastructure—made up of "twisted pair" and coaxial cables—was originally designed to carry telephone and video services. The internet wasn't built to handle streaming video or audio.” C) Over-the-Counter Routers: Most people either rent a modem/ router or buy one and, while over-thecounter WiFi equipment is priced to sell, it does not provide premium technology. Bigger living spaces can experience dead spots and most turn to mesh equipment, repeaters or other consumer grade “Whole-Home WiFi Solutions”. These types of solutions commonly relay the WiFi signal, which slows speeds around 50% per hop. Internet is only as fast as the weakest link. Next to bandwidth, equipment is the most common area that contributes to bad Internet experiences. Underserved/Overpriced: The typical Internet connection “sucks” and is overpriced. The average cost of residential Internet is around $75. Additionally, most pay $10 a month to rent their modem. The cost of Internet is not necessarily more than other utilities but definitely comes with the lowest

Pet Pee ...continued from page 6

quality and reliability. It is as essential as running water, but has all the problems of a do-it-your-self environment. Other utilities don’t pose the same dynamics. For most, the water pressure doesn’t drop every time neighbors run a bath. We pay $75+ for an essential utility service; we want the service to work – no headaches or training involved. From an antiquated infrastructure to user-error the entire experience is often a nightmare. Next month: Part II How to Fix Slow Internet for Residents, Generate Revenue and Ditch the “Cable Guys” With a Multifamily Internet Service Fiber Stream is a provider of futuristic high speed Internet and TV services. Fiber Stream’s target markets include Apartments, HOA'S, MDU's, and senior living communities. Headquartered in Phoenix, Arizona, Fiber Stream is a nationwide "Full Service" Internet provider, offering Fiber to the Unit (FTTU), Fiber-Backed Property-Wide Wi-Fi, Gigabit Internet, Managed WiFi solutions and IPTV. Fiber Stream developed one of the first Revenue Generating Internet Systems of its kind. For more information, visit www.FiberStreamWiFi.com or call 1-888-644-9434.

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does not replace dog walking – all dogs need exercise but rather offers an easy and convenient option for the bathroom needs of high rise living pooches,” he said.

How does the service work? 92101 Dog Solutions uses high quality Fescue grass that is dense and lush which dogs really enjoy. Customers can choose deliveries to occur on Saturday mornings, typically between 10:00 a.m. and 12:00 p.m., or on Monday evenings between 5:30 and 7:00 p.m. “Most of our customers are busy working professionals, so we arrive at our customers units and change/replace the pee patch in less than 5 minutes,” he said. They have a growing customer base and service more than a two dozen highrise condos and apartment buildings in the 92101 thru 92104 zip codes, he said. Some of the top questions about the service Q: Do tenants have to get property manager approval for this product? Have any apartments refused your service? A: No. We have not ever needed property manager approval, and we have not received any critical feedback either. We have met with several leasing agents and property managers, and all welcomed our services. Q: How much does the service cost? A: For dogs 25 pounds or less, our standard size is $130 per month, which includes the pick up and delivery of the fresh grass pee patch for four weeks. For dogs between 25 pounds and 50 pounds there is an XL version that costs $180 per

month. For dogs bigger than 50 pounds, the XXL version is $200 per month. Q: Should I pick up the poop from the grass pad? A: We provide our customers with poop bags to clean up after their dogs. Q: I have two dogs, do I need two pads? How many dogs can one pad handle? A: Depending on the breed of the dog, some may become territorial of their grass patches. But most of our customers that have two or three small dogs typically share the grass pee patch. We always offer advice and solutions for any requests our customers bring us. Q: Do I keep it inside or can it go on my outside balcony? A: Yes, you can keep it indoors or leave it on your balcony. Our unique five-layer system absorbs all liquids, and does not attract flies or create smells. Obviously, the grass eventually dies off after a full week of use, but we replace it the following week Q: Do you plan to expand from San Diego? A: Yes. We started in just downtown 92101 zip code. We currently now provide service to 92102, 92103 and 92104 zip codes. We are also looking to expand even more, and we will keep you posted on our progress. Contact 92101 Dog Solutions at 619-796-3647 or 92101DogSolutions@gmail.com

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Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Top 3 Biggest Stressors for Property Owners and Managers in 2017

n a new survey of 700 rental property owners across the country, maintenance repairs and replacement continues to be the biggest stressor overall for property owners and managers, according to Buildium.com. Overall 61% of respondents reported maintenance and repairs as stressful, compared to 62% last year, according to the survey. “It is clear we are struggling with both maintenance and tenant management,” Darcy Jacobsen, content manager at Buildium.com said during the webinar about the property owners perspective survey. “If you are an owner and you are struggling with these issues you are not alone. “If you are a property manager these are things you might want to bring up when you are trying to win more business, or emphasize in your marketing materials, or when you are talking to owners,” Jacobson said. Top 3 biggest stressors for

property owners and managers 1. Maintenance, repairs and replacements 2. Dealing with problem tenants 3. Finding and keeping good tenants Dealing with problem tenants now No. 2 While maintenance scored as the top stressor, three out of owners’ four top

complaints were solidly in the area of tenant management. Last year, ‘finding and keeping tenants’ came in a very close second (58%). This year it dropped to #3 (49%). It swapped spots with ‘dealing with problem tenants’, which is now #2 (52%). ‘Tenant damage and vandalism’ came in fourth place this year (38%). The take-away here seems clear. Maintenance woes scored highest on their own, but three out of owners’ four top complaints were solidly in the area of tenant management. In fact, you have to go very deep into the list to find additional maintenance-related issues—such as pest management and

severe weather, which tied at 6%. Breaking down the top maintenance issues When Buildium.com broke down the top maintenance issues in the survey, to highlight problems that have hit owners and property managers the worst in recent years, roofing, painting, foundations and landscaping came to the top. Maintenance upkeep costs were clearly at the top with “bad tenants” right behind, so “no wonder then when we asked owners why they might look for a property manager, 60% told us their top reason was maintenance,” Buildium.com said in the survey.

Owners said in the survey, “I would like someone else to deal with maintenance and emergencies,” was the top answer. And, 52 percent said managing property day-to-day is too time consuming.” Property owners were 54% men and 46% women, according to the survey. Buildium said in the survey that, “As a rental property owner, whether you are a strategic investor or someone who has fallen more unexpectedly into ownership, you are probably curious about the experience of others. • How are they keeping property ownership profitable and enjoyable? • What are their best practices?” “Or perhaps you are a property manager looking for insights on what owners care about most.” • How can you connect with them? • What are their expectations from property management and ownership? In March 2017, Buildium and All Property Management deployed this second annual Property Owners Perspectives Survey to nearly 700 rental property owners across the U.S., asking them about property, what they expect, and where they turn for information advice and help.

Proven SEO Tactics. ...continued from page 11 longer title tags often work better for social sharing and search engines don’t necessarily cut off keywords in search results, it is often suggested to write title tags that encourage clicks rather than obsess over length. Placement is also important. The closer the keyword is to the start of the title tag,

the more it will help ranking, boosting clicks from search users. Many SEO firms recommend using the brand name at the end of the title tag, especially if the brand is less well known. Just like when you’re writing content, you need to consider the user’s experience while you are creating title tags as well

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Rental Housing Journal Metro · July 2017

as keyword usage. If your title tags are compelling like your content, it will earn more visits from the search results. Since the title tag dictates the visitor’s first impression of your brand when they locate your apartment community through search, it should evoke a positive reaction.

Meta Descriptions You know that small description you see under a link whenever you perform a Google or Bing search? That is a meta description. Essentially, the meta description is an explanation of the content on the webpages you pull up during your search. According to the representatives of Google and Bing, a webpage’s meta description isn’t directly used in search engine ranking algorithms, but most SEO professionals still consider them to be critical because they will allow your website to gain user click-through rates. You should think of the meta description as an opportunity to advertise the content on your webpage to searchers, allowing them to discern whether the given webpage contains the information they were initially searching for. Meta descriptions are a search marketing tactic. Like webpage content and title tags, they should be unique. Even though you should use keywords in your meta description, you must also create compelling content in the process

that will draw the user in, encouraging them to click on the link above. Most meta descriptions are between 150-160 characters. Remember: Google and other search engines will bold keywords in the description when they match the user’s search terms. When crafting the content of your website, there is nothing more crucial than the user’s experience. You must develop a deep understanding of your prospects as well as your current residents. To boost on-page optimization, and in turn, click-through rates to your apartment community’s website, which have the potential to turn into leads, it is vital to write quality content, include title tags and H-tags, and carefully construct your meta descriptions.

Rental Housing Journal Metro

DEAR MAINTENANCE MEN: Counter Tops, Pinhole Leaks and Smoke Detector Batterys

By Jerry L’Ecuyer & Frank Alvarez Dear Maintenance Men: The kitchen counter tops in my rental units are old and tired looking. I want to upgrade but I am confused about which counter top material will be best. Can you go over the pros and cons of some of the more popular counter top surfaces available? John Dear John, We are lucky today to have so many choices of counter top materials available. The four most popular materials are plastic laminate, granite, engineered stone & ceramic tile. Plastic laminate or better known as Formica Brand is still the most popular choice for apartment counter tops. This is because the choice in colors is almost unlimited and the ease of installation keeps the costs down. With proper care, plastic laminate will last for years; however, it can be easily scratched by knives or scorched by hot pots. Laminate counter tops can be easily installed by

the average handyman, DYI person or contractor. Granite counter tops in the apartment industry are very popular and with good reason. The cost of granite has come down to reasonable levels and the upgraded look of a granite counter top is substantial. They are very tough and are resistant to staining, scratching and scorching. Granite counter tops will need to be professionally installed and sealed periodically. Engineered stone counter tops are almost as popular as granite, and are slightly more expensive than granite. Popular brands are DuPont & Silestone. Engineered stone counter tops are composed of quartz particles and resins and the surface is smooth, non-porous, and scratch resistant. They require less maintenance than granite. Engineered stone counter tops are not DIY friendly and will need professionally trained installers. Ceramic tile counter tops have been around almost as long as plastic laminate.

They can be installed by the average handyman, DYI person or contractor. They are heat & stain resistant. Ceramic tiles do need to have periodic maintenance to keep the grout lines clean and sanitary. From a management and maintenance prospective, we are finding granite counter tops to be the top choice. The price difference between laminate and granite are close enough to warrant upgrading to granite. If you intend to hold onto your investment for a long time, granite will more than pay for its self. Dear Maintenance Men: My plumber just informed me that my 10 unit building has “Type M” copper piping. He says Type M has thinner walls than the more robust “Type L” copper pipe. Could this be the reason I am having more water line pinholes leaks? Dave Dear Dave: A number of things can cause copper

water line pinhole leaks. Having the thinner Type M copper pipes may result in your property having pin hole leaks sooner than with the thicker Type L pipe. However, thin Type M pipe is often only a contributing factor when it comes to pinhole leaks. Typically, water chemistry, incoming water pressure, recirculation pumps and poor construction methods are part of the contributing factors in pipe leaks. Check with your city or water distributor in your area to get information on the water chemistry and hardness. Adding a water softener to the incoming water supply will help protect both the pipes and water heater. Reducing the water pressure with a pressure regulator will reduce stress on the pipes. If you have a recirculation pump for the water heater, it will help to install a timer to control the amount of time the pump is active. Moving water produces a lot of friction in the pipes. Set the timer to operate the pump only during high demand hours. ...continued on page 19

Rental Housing Journal Metro · July 2017

Q3 2017 Special Report

Rental Housing Journal Metro

Amazon Steps Into Real World Retail

Marcus & Millichap

Amazon Reinforces Importance of Brick-and-Mortar Presence, Leaps Into Grocery Business With Acquisition of Whole Foods

mazon enters grocery businesswith $13.7 billion purchaseof Whole Foods. After testing avariety of concepts to enter thegrocery store segment, Amazonrecently announced an agreementto acquire Whole Foods Marketfor $13.7 billion. The purchasegives the e-commerce giant instantaccess to the grocery storebusiness, which accounts for consumerspending of more than $636billion per annum. More importantly,the purchase highlights the importanceof omnichannel platforms,which incorporate a blend of brickand-mortar establishments with anonline footprint to drive traffi c andsales. In addition, grocery storesare typically retail center anchors,underscoring the importance ofstrip and neighborhood centers inthe retail landscape.

Growth of e-commerce highlightsnecessity of omnichannelstrategies. E-commerce sales haveincreased by 148 percent over thepast 10 years and now comprise13.2 percent of core retail sales. Thistrend is shaking up traditional retail,causing stores that fail to offer uniqueservices and an integrated onlinechannel to falter. Stores offeringunique positioning that blends onlinecapabilities such as Domino’s, HomeDepot and Ulta have outperformedin this climate. Amazon’s move intothe brick-and-mortar space throughpop-up stores in malls, physicalbookstores and now through the acquisitionof Whole Foods reinforcesthe importance of having both anonline and real world presence. Grocery sector has resistede-commerce integration. Whileonline sales have integrated successfullyinto a wide range of retailsegments, Internet sales of grocerieshave notably lagged. Amazon, byway of its Whole Foods acquisition,is seeking an opportunity to establisha more meaningful brick-and-mortarpresence in order to synergize its onlinepresence with its ambitions forthe broader retail landscape. Grocery sector convergencewith e-commerce likely to boosteffi ciency. As e-commerce becomesmore intertwined with thegrocery sector, greater effi

Rental Housing Journal Metro · July 2017

ciencieswill emerge through the use of existingstore space to fulfi ll online orders.Creating a hybrid model anda level of mutual dependency willopen a new dimension of grocerystore effi ciency unknown to the sectorto date. In addition, combiningonline convenience with brickandmortarexperiences will provide alevel of customer service that theInternet alone cannot create. As aresult, retail changes moving forwardwill reinforce convergence, nota winner-take-all environment in thesector. Amazon likely to drive innovationin brick-and-mortar segment. Asa leader of e-commerce retail salesand distribution, Amazon will steerthe sector toward innovation and amore integrated customer engagementmodel. As a result, the lines willblur on what constitutes traditional retail,further reinforcing the importanceof brick-and-mortar spaces.

Key Observations • Omnichannel Retail Model Validated. The Amazonpurchase of Whole Foods reinforces the ideathat retailers need both an online and real worldpresence. Amazon’s entry into the grocery businesswill likely spark innovation and further convergencebetween online and traditional retail. • Retail Construction Remains Muted. The measuredapproach to retail development, focusing onsingletenant and mixed-use multi-tenant spaces,has prompted signifi cant vacancy declines in thesector. While headlines have focused on troubledmall tenants, retail center vacancy has reached a16-year low. • Sales Activity Slows as Uncertainty Digested.Rising uncertainty as numerous policy changesremain in fl ux has caused investors to assume amore cautious stance, even as operations remainrobust. This has caused the pace of transactionsto slow this year. • Pricing Edges Higher, While Cap Rates RemainStable. Despite a slowdown in transactions, pricinghas moved higher over the course of the year. Additionally,cap rates have remained stable, providing afertile

...continued on page 16

Rental Housing Journal Metro

Amazon ...continued from page 15

Online Grocery Industry Gathering Traction Consumers’ preference for personally selecting fresh items has insulated thegrocery business from intrusions by e-commerce, but the increasing consumeradoption of online shopping has started to shift the trend. Early entrants intothis sector included pureplay e-commerce companies like WebVan. Althoughit generated modest success in dense urban markets such as San Francisco,adoption was limited. Traditional grocers including Safeway tried to leverageexisting retail locations by adding online sales and delivery capabilities, but theyhave generated little traction. Peapod is trying to engage this sector and anotherentrant, Instacart, offers two-hour grocery delivery services. Walmart hasalso joined the fray, leveraging existing associates who will deliver items to onlinecustomers, while Midwestern grocery chain Meijer is also moving online.Amazon’s move into the grocery business holds subtle differences from thecompetition. Amazon brings an e-commerce savvy customer base, a powerfulWeb portal, a penchant for innovation, a signifi cant capital war chest, anda seasoned fulfi llment and delivery system. It will blend these strengths withWhole Foods’ 467 locations, existing supplier network and brand that is knownfor quality. Together, the unifi ed offering has the potential to offer more than thesum of the parts, possibly reinventing the grocery business in the process.

Expansions Strain Retail Space Availability Signifi cant grocery store expansion will strain retail space availability as vacancyrates now stand at 5.4 percent on a national level, the lowest in 16 years.Retail developers have been cautious in the postrecession era, adding an averageof just 48 million square feet per year since 2010, roughly one-third theannual average from 2000-2008. Much of the construction in recent years hasbeen pre-leased or netleased properties, with little speculative additions. Thenoteworthy expansion by grocery chains, which typically anchor neighborhoodand community centers, will likely outstrip available space and spark additionalretail construction. The announced store openings by major grocers will absorban estimated 25 million square feet, which could be diffi cult to source withoutadditional development. As new grocery stores are built, in-line space will likelyaccompany it, pushing retail construction out of its currently fl at trajectory andinto a period of more aggressive development.

Whole Foods Purchase Provides Amazon Excellent Real Estate, Tech Testing Ground Although Amazon has been testing a variety of concepts to enter the physicalstorefront sector, the purchase of Whole Foods Market puts the grocery sectordirectly in the fi rm’s sights. In addition, the high-quality demographics surroundingWhole Food’s existing footprint likely overlap heavily with Amazon Prime users,providing a built-in incentive for the combined fi rm to draw in more customers.While Amazon could have spent years opening a handful of locations, theacquisition turbocharges its efforts and provides a testing ground for frictionlessshopping using a range of advancements including big data, machine learningand sensor technologies. The fi rm will likely expand the existing delivery serviceoffered by Whole Foods by utilizing its extensive logistics operations to streamlineservice offerings and drive effi ciency. Cross-selling opportunities across itsmany business lines are also likely within Whole Foods locations for Amazonproducts such as the Kindle, Echo, Fire and Prime-related benefi ts. New Challenges Await Amazon and Whole Foods While perception of the acquisition has generally been positive, aligning thesebusinesses carries a variety of risk factors. Amazon needs to leverage the existingWhole Foods stores as distribution centers for a multitude of food productswhile retaining its existing customer base. Additionally, Whole Foods operatesat a high-margin price point, yet Amazon has made lowering costs and marginsa key factor of its success in gaining market share and consumer spendingdollars. These strategic differences must be carefully integrated in order to realizethe clear synergies between the brands. Amid pitched competition in thegrocery sector, losing customers could be costly for both enterprises.

Uncertainty Weighs on Retail Transaction Activity;Sentiment Refl ects Negative Headlines Stemming from an uncertain political climate amid proposals in taxes, healthcareand infrastructure, retail property transactions have slowed moderatelythrough 2017 as investors maintain a cautious posture. Additionally, sentimenthas been driven lower amid a continuous stream of headlines focused on theperformance of department stores and mall-related apparel retailers, as well asincreased e-commerce competition, resulting in waning confi dence in the assetclass as a whole. However, the impacts on the overall retail sector have beenminimal to date, with sector performance remaining robust, driven by continuedstrength in the neighborhood and strip center segment.

Prices Edge Higher; Interest Rates Remain Wild Card While deal fl ow has eased from peak levels, prices have aligned with the robustoperations and a tight vacancy rate. The national average price per squarefoot has risen to $173 per square foot, up 6 percent from the last year. Theslower pace of development has also boosted the market as merchant buildersbring fewer assets to market than prior business cycles. The move up inprices has been accompanied by a moderate drop in cap rates to 7 percent,20 basis points lower than last year. Interest rates have been a primary topicof discussion among investors, driven by the rapid rise in longer-term Treasuryyields following the election. While interest rates have fallen back to pre-electionlevels, the volatility in the market has prompted a more cautious stance amonginvestors. Additionally, the continued pace of Federal Reserve rate hikes and theprospect of the Fed shrinking its balance sheet have many anticipating upwardmovement in Treasury rates.

Rapid Grocery Expansion Heightens Competition While Amazon’s entry into the grocery business holds the prospect of an innovativemodel blending online retail with this stalwart segment, a range of grocerycompanies have committed to signifi cant expansion. Publix is set to open 20 newstores this year, with Wegmans planning a similar expansion, primarily in EastCoast suburban communities. Kroger plans to open 55 stores and Sprouts isscoping for 40 new locations nationwide. Adding to the mix, German grocer Aldi,which offers a no-frills, value experience, has announced a $3.4 billion remodelof its existing storefronts together with a U.S. expansion that will add 900 newlocations by 2022. Another German chain, Lidl has initiated an aggressive entryinto the U.S., with plans for 100 East Coast locations by the middle of next year.Lidl’s smaller 20,000-squarefoot operations cater to value-minded customers. 16

Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Amazon ...continued from page 16 Prepared and edited by Aaron Martens Research Analyst | Research Services For information on national retail real estate trends, contact: John Chang First Vice President | Research Services Tel: (602) 687-6700 | john.chang@ marcusmillichap.com Price: $1,000 © Marcus & Millichap 2017 | www. MarcusMillichap.com Property Specialty Director: Bill Rose First Vice President | National Retail Group Tel: (858) 373-3100 | bill.rose@ marcusmillichap.com Marcus & Millichap Capital Corporation: William E. Hughes Senior Vice President | Marcus & Millichap Capital Corporation Tel: (949) 419-3200 | william.hughes@ marcusmillichap.com

a future event. This is not intended to provide specifi c investment advice and should not be considered as investment advice.Sources: Marcus & Millichap Research Services; CoStar Group, Inc.; CreditNtel; Federal Reserve; Moody’s Analytics; Real Capital Analytics; Standard & Poor’s; U.S. Bureauof Labor Statistics

The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, norepresentation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein. No representation, warranty orguarantee, express or implied may be made as to the accuracy or reliability of the information contained herein. This is not intended to be a forecast of future events and thisis not a guaranty regarding

Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

FIND EVICTIONS

Timley information ...continued from page 9 Accessing real-time information: In addition to the examples above, leading vendors in the property management industry are providing realtime website information. Here are two examples: A leading industry website provides password-protected real-time access for its property management advertisers at a secured portion of their website. This means advertising clients can make changes to their rental rates, update property information, review web page activity and analyze monthly/yearto-date marketing reports. In a second

example, a leading call tracking service is providing real-time access at their website for their property management clients. This access allows their clients to review important marketing information, compare the results of their marketing with other properties within their company, download and listen to actual in-bound telephone calls from future residents, download marketing information for their own internal spreadsheets and reports, E-mail reports to others within their company and define their own parameters for custom reports

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of their marketing statistics. Want to hear more about this important topic or ask some additional questions about how to access real-time leadership information? Would you like to know how leaders in the property management industry are using internal information dashboards to drive their critical decisions? Send an E-mail to ernest@ powerhour.com and The Coach will E-mail you a free PowerHour invitation.

Ernest F. Oriente, a business coach/ trainer since 1995 [37,400 hours], serving property management industry professionals since 1988--the author of SmartMatch Alliances™, the founder of PowerHour® www.powerhour.com, the founder of PowerHour SEO/SEM www. powerhourseo.com and his live weekly PowerHour Leadership Academy www. powe rhourleade rshipacademy.com/ pm has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around the world, executive recruiting, investment banking, SEO/ SEM web strategies, powerful tools for hiring SuperStars and building smart teams, plus social media strategies www. powerhour.com/propertymanagement/ socialmedialeadership.html . Ernest worked for Motorola, Primedia and is

certified in the Xerox sales methodologies. Recent interviews and articles have appeared 9000+ times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 260+ articles for the property management industry and created 400+ property management smartly-crafted templates, business and marketing checklists, sales letters and presentation tools. PowerHour® is based in Olympic-town Park City, Utah, at 435-615-8486, by E-mail ernest@ powerhour.com or visit their website at www.powerhour.com on Twitter, https://twitter.com/PowerHourCoach on LinkedIn, www.linkedin.com/in/ ernestoriente and on Facebook, www. facebook.com/powerhour2

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Rental Housing Journal Metro · July 2017

Rental Housing Journal Metro

Dear Maintenance Men ...continued from page 14 Doing these easy fixes, may add life to your existing pipes. If poor construction methods are involved, re-piping may be your only solution in addition to the above solutions. Dear Maintenance Men: I install a new battery powered smoke & CO detector into each unit before a new tenant moves in. The tenants moving into the apartment unit must sign a smoke detector agreement along with the rental agreement. The smoke detector agreement requires the tenant to check the detector for operation and replace the battery once a year. Should I be doing anything else or am I covered? Bill Dear Bill: We are not lawyers and cannot answer as to your possible liability in the matter of smoke & CO detectors. However, our guess is the brand new battery you installed at the beginning of your resident’s occupancy is currently operating a remote control toy. Our thoughts on smoke detectors are simple: They are cheap, install more than one and check them yourself regularly. From the property management view, most insurance companies require that you keep a smoke detector log on each unit and that they are checked every six months or at least once a year. The log does not need to be elaborate. Our Smoke Detector Log has the property address at the top, with eight columns. We recommend you keep a similar log for each CO detector you install.

1: Unit#: 2: Number of Detectors: 3: Check Detector: split column with Good/Bad 4: Battery Replaced: yes/no 5: Detector Replaced: yes/no 6: Initials: the person who did the checking should initials or sign 7: The Date of Inspection: 8: Comments: such as whether the battery was missing or the detector was damaged, etc. As an added precaution, we check the smoke & CO detectors every time we enter a rental unit regardless of the reason we are there. We make a note of the impromptu inspection on the Smoke Detector Log. Be sure to include the date and the person who checked the units. It helps us sleep at night.

Rental Housing Journal Metro · July 2017

If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: BuffaloQuestions@ gmail.com If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Frank Alvarez is licensed contractor and the Operations Director and coowner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor and Co-Chair of the Education Committee of the Apartment Association of Orange County as well as being Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance. com For more info please go to: www. BuffaloMaintenance.com Jerry L'Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Past President and past Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988.

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