On-Site (Seattle / Tacoma) Rental Housing Journal - February 2015

Rental Housing Journal On-Site

February 2015 - Vol. 9 Issue 02

3. Afraid to Admit that You Don’t Understand Social Media?

4. 5 Basic Fundamentals for Property Managers and Landlords 7. U.S. Renters Paid $441 Billion in Rent in 2014, Up Nearly $21 Billion Since 2013 8. Make 2015 the Best Year Ever 10. 4 Tips to Survive the Next Stock Market Crash 13. Attracting Families with Amenities Aimed at the Youngest Tenants 16. WMFHA Market Report

18. Property Management: 21 Low Cost Renewal Concessions 19. Instant Tenant Screening Reports & FCRA Accuracy Requirement 21. The Coach – Your Voice Carries the Words of 10,000 Leases!

22. Secret Shopper 23. Staying Safe 24. Looking at the Big Picture 26. Dirty Little Secrets of Family Business 27. Vacation Rentals – Make It Simple for Your Guests

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Published in association with: Washington Apartment Association, IREM & Washington Multifamily Housing Association

By Denise M. Holliday & Allyssa B. Birnley, Hull, Holliday & Holliday, PLC

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hether you have a doubt on whether or not an action qualifies as an immediate, or if your situation qualifies as a fair housing issue, etc., Attorneys Denise M. Holliday & Allyssa B. Birnley of Hull, Holliday & Holliday, PLC agree that the best course of action when in doubt is “call your attorney”. Rental Housing Journal asked Attorney Holliday & Birnley: As a landlord tenant attorney, if you were to give three pieces of advice to landlords and property managers, what would they be?

Attorney Denise M. Holliday advises:

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1. Make sure you keep up-to-date on the laws. Most lawsuits arise continued on page 8

I

A Dozen States Dominate Top Year-End Real Estate Markets

t appears that real estate investment has headed south for the winter, this according to yearend data compiled by Local Market Monitor, the national real estate forecaster, and HomeVestors of America (the "We Buy Ugly Houses"® people) with Texas, North Carolina and Florida ending 2014 as sure bets for single-family investment property markets.

"The real estate markets that made the top 20 list for investing were chosen based on population growth and it's near cousin, job growth - both conditions ideal for investing in single family homes," said Ingo Winzer, president and founder of Local Market Monitor. "In all of the top 20 markets, the populations increased by more than double the national average of one percent."

The top 20 markets for real estate investing are:

1. Austin-Round Rock, TX

4. Nashville-Davidson-Murfreesboro, TN

2. Houston-Baytown-Sugar Land, TX

5. Orlando, FL

3. Raleigh-Cary, NC

...continued on page 5

Pierce-Kitsap-Thurston Rents Up 4.8% in 2014

By Tom Cain, Apartment Insights Seattle - Apartment Insights 4th quarter results show rents increased 4.8% in 2014 . The vacancy rate declined to 4.51%, according to Tom Cain of Apartment Insights. The data are from his Seattle firm’s nonrandom survey on 50+ unit properties in Pierce, Kitsap and Thurston counties.

VACANCY: 4.51% The market vacancy for our nonrandom survey of conventional, stabilized 50+ unit properties in all three counties is 4.51%, down from continued on page 6

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

Afraid to Admit that You Don’t Understand Social Media?

View Those Sites As A Cocktail Party Where The Rules of Networking Etiquette Apply

By Marsha Friedman

I

talk to a lot of business owners and authors who don’t “get” social media.

A year or two ago when I’d speak with them, most were quick to say they didn’t understand it and didn’t need to.

Today what I hear is: “I know I’m supposed to be doing that, so I have a Facebook account.” Or, “Yeah, I’ve got my teenaged nephew taking care of that.”

Unfortunately, simply posting occasional announcements about upcoming sales or telling people why they should use your service or read your book is not social media marketing and it’s not helping you.

In fact, if that’s all you’re doing, it could be hurting you.

What’s worse, you’re not taking advantage of what could become the most powerful tool in your marketing arsenal. Why? Social media is the world’s biggest cocktail party and everyone’s there – including your competitors and your potential customers.

Rental Housing Journal On-Site • February 2015

I first heard the cocktail party analogy from marketing guru David Meerman Scott, who used it in his best-seller, The New Rules of Marketing & PR, published in 2007.

It immediately clarified for me why social media networks are marketing gold.

Imagine walking into a networking party at a hotel. People are roaming around, engaging with folks they

know and being introduced to those they don’t know. They’re talking about the economy, the weather, the price of milk.

You get into a nice chat with someone and he asks what you do for a living. If it were me, I’d say, “I’ve got a national PR company that specializes in publicity.” The person might say, “Wow, I’ve got a friend interested in that. Let me introduce

you!”

The friend may or may not be present at this cocktail party.

But if that same conversation happened on a social network like Facebook, that friend and dozens more would be so close by. They may actually be “listening” to your conversation. That’s what makes social media so much more valuable as a marketing tool. You can be exposed to thousands more potential customers than you would through traditional networking channels.

How does that happen? Social media users stay connected by “following” one another.

If I’m following you, I can see your conversations. Post something clever and I might share it with my followers, who may also share it with their followers.

Before you know it, you and your brilliance may be exposed to hundreds of thousands of strangers.

Some of them will become your followers and, voila! You have a growing audience.

But it won’t happen if you don’t continued on page 6

3

RENTAL HOUSING JOURNAL ON-SITE

5 Basic Fundamentals for Property Managers and Landlords

By Will Johnson Publisher RHJ

I

nteracting with the people who make our industry go is one of the most rewarding and interesting aspects of my job as Publisher of Rental Housing Journal. From the top executives at large management companies and apartment association leadership, to on-sites and

leasing agents, to independent rental owners and industry suppliers, I’ve gleaned a lot of wonderful and sage advice about how to best run a business in the rental housing industry.

Because of my position as publisher at RHJ, I am given the opportunity to pass much of this information along to others.

While there are certainly complexities and nuances to being a

property manager or landlord that are unique to this industry, the fundamentals of the business look a lot like any other business. Whether you’re an executive or a newbie, it’s easy to get distracted with the background noise and circumstances of the daily grind, and it’s always important to remind yourself of the fundamentals.

1. Be Organized Organization and the tools to be organized and manage your time can be very different depending on your position and the size of your company. If you’re an independent landlord, a datebook and a spreadsheet might be enough to keep your business straight and organized. If you’re part of a larger organization, you probably need a more complex system.

Regardless of what tools you’re using, I suggest using the “Hit By A Bus” test to make sure nothing is slipping through the cracks. That is to ask: “If you were hit by a bus tomorrow, could someone with reasonable knowledge of your industry come in and run your business with little issue?”

We all may want to seem irre-

placeable in our business, and certainly nobody wants anyone to get hit by a bus, but if your business is organized well enough to pass this test, you are prepared to run your business efficiently yourself.

2. Educate Yourself Property management is an industry that requires us to continue to educate ourselves. Some certifications require people to earn continuing education credits, but even those of us that aren’t required to take classes need to keep up on current laws, issues and best practices.

Thankfully, there are a lot of great avenues that folks in the industry can use to keep up. In addition to Rental Housing Journal, there are a number of great publications and websites, both local and national, where you can learn on your own time. But, I am a huge advocate of rental housing and apartment associations and real estate investor groups and their role in educating the industry through classes and education events. Just about every local area has one or more local groups, but there are a number of great national organizations as well, ...continued on page 9

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

A Dozen States ...continued from page 10 6. Boise City-Nampa, ID 7. San Antonio, TX 8. Denver-Aurora, CO 9. Charlotte-Gastonia-Concord, NC 10. North Port-Bradenton-Sarasota, FL 11. Oklahoma City, OK 12. Phoenix-Mesa-Scottsdale, AZ 13. Seattle-Bellevue-Everett, WA 14. Dallas-Plano-Irving, TX 15. Oakland-Fremont-Hayward, CA 16. Fort Worth-Arlington, TX 17. Las Vegas-Paradise, NV 18. Salt Lake City, UT 19. San Jose-Sunnyvale-Santa Clara, CA 20. San Francisco-San Mateo-Redwood City, CA "Texas has always been a sweet spot for real estate investing. Its economy is strong, and only getting stronger. This is spurring population and job growth, especially among younger workers looking for work in retail, business and tourism. They are looking to rent, not buy a home," noted David Hicks, HomeVestors copresident.

Along with job growth and population growth, relatively low home prices is a factor making investments in single-family homes as rental

properties a low risk opportunity in some markets. The average home prices in the top 10 markets are under $300,000, although the markets listed among the top 20 range from $166,000 to $844,000.

Despite high home prices, a few California markets made the top 20, including Oakland-FremontHayward (15), San Jose-SunnyvaleSanta Clara (19) and the San Francisco Bay area (20).

"There is definitely opportunity to strike gold in the California market for real estate investing. With some notable exceptions, they're growing again - both in jobs and in population - as is clear by double-digit home price increases," explained HomeVestors co-president Ken Channel. "But investors in these markets are likely to see more of their gain come from price appreciation and less from a long-term rental stream, because most of these markets are no longer under-priced."

About the Quarterly Data: The data identifies markets that will be good rental markets and where home prices are likely to increase at a good rate over the next few years. Criteria include markets where:

people moving there in search of jobs; • The current rate of job growth of 2% or better; and • There is low unemployment, so that new jobs will be filled by people who move there, not by unemployed people who are already there.

Markets are excluded that: • Have a small population because they don't have stable economies.

HomeVestors of America, Inc. Dallas-based HomeVestors of America, Inc. is the largest professional house buying franchise in the U.S., with over 56,000 houses bought since 1996. HomeVestors recruits, trains and supports its independently owned and operated franchisees that specialize in building businesses based on buying,

rehabbing, selling and holding residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each community. In 2013, for the eighth consecutive year, HomeVestors was among the prestigious Franchise Business Review's "Top 50 Franchises," a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors. com. In 2014 HomeVestors was recognized as the 25th fastest growing franchise by Entrepreneur Magazine and number 126 in the Franchise 500 by Entrepreneur Magazine.

• The population has been growing at above-average rates (4% or better) with growth coming from

RENTAL HOUSING JOURNAL

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Advertising Sales Will Johnson • will@propubinc.com Terry Hokenson • terry@propubinc.com

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Rents Up 4.8% ...continued from front page 4.91% in the third quarter. The vacancy rate was 4.89% a year ago.

The rate for all properties including those in lease-up is 4.99%. The last time this overall vacancy rate was below 5% was in 2008.

Pierce: 4.59% The current vacancy rate in Pierce County improved to 4.59% from 5.17% last quarter. The rate was 4.92% a year ago.

The strongest submarkets are Fife and University Place/Fircrest with vacancy rates around 4%. The submarkets with the highest vacancy rates are slightly over 5%. Lakewood showed the greatest improvement.

Kitsap: 4.01% The Kitsap market is quite tight.

Its vacancy rate dropped from 4.48% to 4.01%. The vacancy rate was 5.01% a year ago. All the submarkets are below 5%, and Poulsbo/Bainbridge Island is below 3%.

Thurston: 4.53% Thurston is the only county where the vacancy rate increased this quarter. It rose from 4.16% to 4.53%. Yet it is still down from the 4.71% in the fourth quarter of 2013.

Lacey is the weakest submarket at 5.62%. The others are under 4%.

RENTAL INCENTIVES Pierce: $13 per Month (1.41%) Kitsap: $7 per Month ((0.65%) Thurston: $5 per Month (0.56%) The overall rate for rental incentives for the three-county area is 1.2%, bettering the third quarter's 1.32%. There are 37 fewer properties offering incentives compared to last quarter.

RENTS: $921 per Unit Rents for the three-county area increased $8 to $921 per unit and $1.07 per foot. Rents have increased each quarter for more than two years.

They increased 4.8% over the past year.

Pierce

Kitsap:

Thurston:

Understand Social Media? ...continued from page 3

$1.04 per Square Foot Rents increased $8 in Pierce, $4 in Kitsap and $3 in Thurston. In the past year rents have increased 5.5% in Pierce, 3.1% in Kitsap and 2.9% in Thurston.

University Place/Fircrest registered the biggest rent increase at $21 or 2.4%.

NEW CONSTRUCTION There are 1,782 units under construction in the three-county area, almost all of which are in Thurston and Pierce. There are 997 units that have completed the design review process, and another 2,119 units that are in the earlier stages of the construction pipeline.

Featured in the photo, the 126unit Sinclair in Port Orchard opened in 2014. Rush Properties is the developer and manager.

have a plan and don’t apply cocktail party rules of etiquette. What works on social media – and what doesn’t – are the same things that work (and don’t) when you’re networking at that hotel conference room party: Go in with a plan. If you’re going to a party to network, you have goals. Maybe you want to find prospective clients or get people interested in your upcoming project.

You identify your target demographics and learn which influencers will be at the party, such as the local media, politicians and celebrities. On social media, the world’s biggest cocktail party, making the right moves gets a bit more complicated and involves some strategizing. (My company now offers customized strategy plans that can be easily implemented by casual or newbie social media users.)

OBSERVATIONS The three-county market continDon’t stand in the middle of ues its positive trend with a rent the room saying the same increase close to 1% and a 4.51% thing over and over. Repeatedly vacancy rate. Rents have increased posting the same thing, like “Come 4.8% over the past year. in for our big sale tomorrow” or “We New construction is moderate. won Business of the Year!” is like Based on this together with a sound going to a party and saying the same economy, we look for continued thing over and over. People will run strength in 2015. from you. Instead, engage in converTom Cain of Apartment Insights sations on a variety of topics. They Washington is a member of the non- can be related to your business or profit Central Puget Sound Real book, but in a tangential way.

Estate Research Committee in Someone who sells jewelry, for charge of providing apartment rent instance, might share a great trick for and vacancy data. Tom has been a cleaning rings. member of the Committee for over 25 years, and has been researching Be genuine and show some apartment market trends in the personality. At a party, you smile, Seattle area since 1978. His company surveys the five counties in Central and South Puget Sound.

This article highlights survey results that subscribers can access from an online database of all 50u+ properties. METRO, Apartment Insights also APT. NEWS VALLEY, ARIZONA provides customized rent reports and market reports. www.apartmentinsightswa.com 206-632-2220

ask people questions about themselves, maybe tell some jokes, if that’s your personality and the personality you want your brand to reflect.

People are drawn to people, not things, so let your humanity shine.

But don’t try to be something you’re not. Other users will quickly figure it out and you – and your brand – will lose their trust.

Social media is a great way to build awareness of your brand, cultivate prospective customers and establish yourself as an authority. It has tremendous value for anyone with marketing needs, and it’s really not intimidating once you jump in.

Plus, it’s a whole lot more fun than an old-fashioned networking cocktail party!

Marsha Friedman is a public relations expert with 25 years’ experience developing publicity strategies for celebrities, corporations and media newcomers alike. Using the proprietary system she created as founder and CEO of EMSI Public Relations, (www.emsincorporated.com), an award-winning national agency, she secures thousands of top-tier media placements annually for her clients. The former senior vice president for marketing at the American Economic Council, Marsha is a soughtafter advisor on PR issues and strategies. She shares her knowledge in her Amazon best-selling book, Celebritize Yourself , and as a popular speaker at organizations around the country.

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

U.S. Renters Paid $441 Billion in Rent in 2014, Up Nearly $21 Billion Since 2013 Rent paid by New York-Northern New Jersey metro renters accounted for more than 10 percent of all rent paid in America

R

ent paid by New YorkNorthern New Jersey metro renters accounted for more than 10 percent of all rent paid in America Americans shelled out $20.6 billion more in rent in 2014 compared to 2013. Cumulatively, U.S. renters paid $441 billion in rent in 2014 compared to $420 billion last year, an increase of nearly five percent (4.9 percent), as both the number of renting households and the average rent rose nationally, according to a Zillow rentals analysisi.

Rental Housing Journal On-Site • February 2015

Locally, the Bay Area, consisting of the San Jose and San Francisco metros, saw the largest jump in cumulative rent paid in 2014, up 14.4 and 13.5 percent respectively. Rent per household in the San Jose, Calif. metro rose by $197 per month, while rent in the San Francisco metro rose by $163 per month.

Out of the top 50 largest U.S. metro areas, the largest amount of cumulative rent was paid the New York-Northern New Jersey ($50 billion) and Los Angeles ($34 billion) metros. The smallest amount of

cumulative rent was paid by renters in Birmingham, Ala. ($1 billion), Louisville, Ky. ($1.2 billion) and Buffalo, N.Y. ($1.2 billion).

Nationally, the total number of renters is estimated to have grown 1.9 percent in 2014ii. Over the same time period, the median rent paid increased 2.9 percent.

"Over the past fourteen years, rents have grown at twice the pace of income due to weak income growth, burgeoning rental demand, and insufficient growth in the supply of rental housing. This has created real

opportunities for rental housing owners and investors, but has also been a bitter pill to swallow for tenants, particularly those on an entrylevel salary and those would-be buyers struggling to save for a down payment on a home of their own," said Zillow Chief Economist Stan Humphries. "Next year, we expect rents to rise even faster than home values, meaning that another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable." ...continued on page 9

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RENTAL HOUSING JOURNAL ON-SITE

Make 2015 the Best Year Ever

By Mary Girsch-Bock Pt. I t’s a brand new year. If you’re like most of us, you have a long list of New Year’s resolutions that you have vowed to keep this year.

And, if you’re like most of us, becoming better organized in 2015 is somewhere on that list; after all it’s one of the Top 10 resolutions year after year.

Getting organized can mean many things to many people. For the wellorganized among us, it can mean simply shredding old documents.

But for most of us, getting better organized can be a complex task, as we explore ways to make ourselves and our business more efficient.

In Part I, I’ll talk about some of the things that you can begin to explore in your quest to become better organized. In Part II, I’ll talk more about how to implement those things.

Ranging from simple solutions, to more complex implementation, here are some things you may want to consider: Catch up on filing. Yes, filing does fall really low on the priority

I

list, which is why many of us end the year with stacks of paper on our desks. But take a moment and think about how much time you and your staff have spent going through that stack of papers looking for an application, or a move-out form, or walkthrough papers. Think about how much easier it would be if you could simply walk to the file cabinet and locate the paperwork you’re looking for. Yes, filing is a pain, but it’s a necessary pain. Get those papers in their proper place, and then consider ways to make filing a non-issue in the future.

If you’re really tired of piles of paperwork, consider moving your office towards a paper-free environment. We’ll explore this more in Part II. Update your resources. Are you and your employees up to date on Federal Fair Housing Laws? If not, do you have a resource in place that can be easily accessed when questions or issues arise? You may never need it, but having Fair Housing Laws, Lead Paint Laws, and other applicable laws readily available for employees ( and yourself) to reference can eliminate questions or

issues arising in the future. The same rule applies for policies and procedures.

Create easier rent payment options. Giving your residents more rent payment options not only increases the odds that the rent will be paid on a timely basis, but it also makes it easier on staff who current-

ly has to process, endorse, and deposit all those checks.

Pt. II Are you ready to begin? There’s something about a new year that provides many of us with the impe...continued on page 12

Q & A ...continued from front page out of misunderstandings, not intentional acts.

well documented file makes life easier for (and us).

2. Use a well-respected and standardized lease, forms and property management agreement.

These have been modified through the years to help keep you out of trouble and clarify everyone’s obligations and rights.

2. Make policies and stick to them.

Make sure the staff receives the same training and that there is consistency in enforcing the policies.

3. When in doubt, pick up the phone and call a lawyer. Those few moments can save you thousands of dollars.

Attorney Allyssa B. Birnley recommends: 1. Document everything! Keep a good ledger, take pictures, log all conversations with tenants, and put all agreements in writing. A

8

3. If you are not sure how to handle a situation, call your attorney before you take action, not after.

We are here to help and it is much easier to prevent a potential problem than to have to deal with it later.

Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

Rent in 2014 Up ...continued from page 7 Total Rent Paid By The Largest 25 Metros Covered by Zillow* Metro Cumulative 2013 Cumulative 2014 Rent Rent per billion per billion United States $420.4 $441 New York-Northern $48.2 $50 New Jersey Los Angeles $32.5 $34.2 Chicago $13.4 $14.3 Dallas-Fort Worth $9.4 $10 Philadelphia $7.8 $8.1 Houston $8.2 $8.8 Washington, DC $13.1 $13.4 Miami-Fort Lauderdale $9.7 $10.5 Atlanta $6.8 $7.2 Boston $9.2 $9.8 San Francisco $12.8 $14.6 Detroit $4.3 $4.5 Riverside, Calif. $5.9 $6.2 Phoenix $5.9 $6.2 Seattle $7.1 $7.8 Minneapolis-St Paul $4.3 $4.5 San Diego $7.9 $8.3 St. Louis $2.7 $2.8 Tampa, Fla. $4.1 $4.3 Baltimore $4.2 $4.3 Denver $4.4 $4.9 Pittsburgh $2.2 $2.4 Portland, Ore. $3.9 $4.1 Sacramento, Calif. $3.8 $4.0 San Antonio $2.6 $2.8

Percent Change 2013-2014

Monthly Payment Change 2013-2014

4.9% 3.6%

$26 $20

5.3% 7.4% 6.2% 4.4% 7.2% 2.1% 7.7% 5.7% 6.9% 13.5% 4.6% 4.4% 6.0% 8.6% 4.8% 6.1% 3.3% 4.9% 3.0% 10.8% 10.6% 7.1% 5.2% 5.5%

$42 $50 $35 $23 $43 $2 $59 $30 $58 $163 $20 $26 $34 $71 $25 $55 $10 $24 $9 $86 $56 $46 $33 $25

* Data for the 50 largest metros covered in this Zillow rentals report is available.

Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research.

Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years.

The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgages, Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Mortech®, HotPads™, StreetEasy® and Retsly™. The company is headquartered in Seattle.

5 Basic Fundamentals ...continued from page 4 many of which have local chapters.

National Apartment Association, IREM, NARPM and ARPOLA are a few worthwhile national groups.

3. Give Great Customer Service Sometimes, it’s difficult to remember that our tenants and residents are our customers in the same way that we are customers of the stores where we shop and restaurants where we eat. It can be very easy to forget that their rent payments pay our bills, especially when dealing with the fires and headaches involved in providing homes for people. But, we have to rise above and treat our residents like customers in any other business. In fact, we really need to be going above and beyond – we’re providing the most basic of human needs, after all.

Treat your residents’ concerns with your own genuine concern.

Take their needs seriously, and always fulfill them within reason, landlord – tenant laws and industry best practices. Make sure your residents know that you value you them.

Never treat your residents less than you would treat your own friends and family. It seems simple, but when residents have their needs fulRental Housing Journal On-Site • February 2015

filled and feel valued, they are more likely to renew and pay more rent.

It goes without saying for property managers that your owners are also customers. It can certainly be difficult to balance the needs and desires of both residents and owners, but a skilled, successful manager will find a way. Your career depends on it.

4. Surround Yourself With Great People You’re only as good as your people. How many times have we heard this business cliché? For me, in one form or another, it’s thousands. Yet, only because it’s true.

Great leaders wouldn’t be great without talented and dedicated people behind them. If you’re an owner or manager, make sure you recruit, hire and retain people that are willing and capable to take your business where you want it to go. Make sure that your employees are both willing and able to perform the tasks you give them and make your company perform to the level you want it to. Don’t skimp.

Always work toward goal alignment within your organization. For instance, if the goal for your company is to provide quality housing at a

premium price, make sure everyone, from owner to manager to leasing agent to maintenance is doing their part and playing their role in order to achieve that goal.

The same can be said for the industry suppliers and vendors you choose to work with. Whether you’re screening candidates, turning an apartment or installing a playground, the people you’re contracting with are representing you. Make sure they’re aligned with the goals of your business and delivering the service and image that you desire.

5. Keep Your Mind On Your Money (And Your Money On Your Mind) I’m dating myself, but Snoop Dogg had it right. When the rubber meets the road, we’re all in this business for the money. There may be other, more altruistic, motives, but few people would take on the headaches of property management if it weren’t paying the bills. So, work your business with the bottom line in mind.

This does not mean that you should go cheap on expenses, or get

greedy when driving revenue. Your decisions on both should be measured, balancing both short and long-term benefit. For instance, you might save money in the short term by doing a minimal clean and repair apartment turn, rather than a major update of the unit. But, if the other communities in your area are new or investing in major updates, that might not be the smart play.

Conversely, if your building is already performing well, reasonably updated and the competition isn’t pushing the envelope, it might be worth rethinking the complete remodeling of your clubhouse.

Whatever you do, just make sure you’re putting thought into the short and long term effects of your decisions on your bottom line.

Will Johnson Rental Housing Journal Will@ProPubInc.com

9

RENTAL HOUSING JOURNAL ON-SITE

4 Tips to Survive the Next Stock Market Crash Advice on Smart Alternative

Investments from

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il prices are plummeting, taking energy stocks down with them. Meanwhile, financial experts such as Harry Dent and Robert Shiller say the U.S. stock market is overdue for a correction. Shiller recently noted in Forbes that the market is 65 percent overvalued, mainly fueled by “irrational exuberance.”

“Many investors today are yield-starved savers who are losing their earnings power to inflation, increased taxes, and persistent low interest rates,” says Salvatore M. Buscemi, managing director of Dandrew Partners LLC in New York City and author of “Making the Yield: Real Estate Hard Money Lending Uncovered,” (www.

MakingTheYield.com).

“As a result, they are being forced to take risks by investing against their better judgment into markets where they have little to no control, and for the majority, can’t afford to lose their money in another stock market crash as they did in 2001 and 2008.”

A growing trend among those seeking to beat the bear is to channel investments into real estate, he says.

Not the kind of venture that turned many into reluctant landlords during the housing bust, but another type called hard money lending.

“Here’s how it works,” Buscemi says. “Investors act like a bank and make short-term loans to small businesses that buy and repair distressed properties, refinance them with conventional bank loans and repay the short-term loans at higher interest rates, generating more profitable returns for the original lenders.”

Buscemi reviews ways to get the most out of this lucrative venture.

• Shop local. All things being equal, private investors are often served by small, perhaps localized real estate private partnerships that throw off real cash flow than by glob-

geopolitical shocks,” Mr. Buscemi says. “They don’t want to wake up in the morning blindsided that they’ve lost a good chunk of their portfolio because of something that happened overseas. Real estate keeps climbing higher and higher in some markets. And people implicitly trust real estate; it’s a very bankable asset class.”

al, publicly listed full-service investment brands where an alignment of interest between investors and these corporations may be deficient or missing.

• Explore crowd funding. With the advent of crowd funding and federal rule changes since the last real estate cycle, more people with less money can participate in deals that they may have never been able to get into before.

• Have a pre-flight checklist.

The best time to worry about a real estate loan is before you make it. Always have a list of items to review before committing capital. These include job history, experience in rehab property, education, and most important, credit quality. Always read the entire credit report as the devil is in the details. Also make sure to accept reports from a third party, not the borrower as they can be faked.

• Always ask how your interests are aligned with your borrowers. If

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they are not going to make any money, neither will you. The loan will default, and you’ll both be discouraged.

“Individual investors are looking for a more intimate method of managing their own money, insulated from

Salvatore M. Buscemi, author of “Making the Yield: Real Estate Hard Money Lending Uncovered,” is managing director of Dandrew Partners LLC in New York City (www.dandrewmedia.com). The company specializes in placing capital from prominent institutional investors into middle-market distressed commercial real estate investments. He began his career at Goldman Sachs, where he worked four years as an investment banker. A frequent speaker on hard money lending, Mr. Buscemi also cofounded Dandrew Strategies LLC, a $30 million real estate solutions provider in the secondary mortgage market specializing in non-performing residential mortgage portfolios.

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(206) 283 - 0816 / (800) 335 - 2990 / www.RHAwa.org Rental Housing Journal On-Site • February 2015

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RENTAL HOUSING JOURNAL ON-SITE

Best Year Ever ...continued from page 8 tus to change. For many of us, becoming more organized is a big part of that change. Yes, you can continue to rifle through that twofoot tall stack of papers resting on your desk, or you can find a way to painlessly organize those papers so that they’re easily available for anyone looking for them. You can wait until a leasing agent has a question about who they can refuse to rent to, or you can make that information easily and readily accessible to them.

You can have your leasing agent spend all afternoon endorsing checks and driving to the bank, or they can spend their time leasing apartments. If you’re ready to change, here are just some ways to implement the organizational tasks I talked about in Part I. Untold hours and a million paper cuts later, you’ve finished filing.

Now it’s a good time to think about how you can reduce or eliminate the amount of paper in your office. By storing important documentation electronically, you’ll ensure that employees have quick access to files when they need it, while significantly reducing the time spent filing.

Give your employees the resources they need to do their job. http:// www.civilrights.org/fairhousing/ laws/federal.html provides quick access to all the information a property management office needs, including links to Federal Fair Housing Laws, Fair Housing related

35

Presidential Executive Orders, and access to housing related statutes for 39 states.

Create a property process and procedure reference guide which can be a lifesaver for new employees, as well as a great go-to for those needing a refresher on the proper steps for approving an applicant, as well as moving in and moving out residents.

Are you still accepting only personal checks and money orders for rent payment? You may want to consider expanding your options this year. Imagine having a resident portal where residents can safely pay their rent and it’s automatically applied to their account. No more payment posting, no more checks to deposit, no more NSF funds to contend with. If you really want to be better organized in 2015, expanding your rental payment options is a must.

Less paperwork, easy access to needed resources, and expansion of rent payment options can go a long way to eliminate office stress, duplicate work, and stacks of paper.

Implementing even one of these options will allow you to become and remain more organized in 2015 and beyond. from PropertyManager.com a Service of AppFolio

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

Attracting Families With Amenities Aimed at the Youngest Tenants

By Sarah Matheson, Epoch Times

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NEW YORK—Children’s playrooms have become an increasingly popular amenity with developers over the last decade. Hundreds of new buildings have them, and for some families it factors into where they choose to live.

Manhattan is the borough that boasts the most children’s playrooms, followed by Brooklyn.

Playrooms act as a complement in upscale buildings with larger units, especially in areas with good schools.

Compared with other amenities, like pools or gyms, playrooms have lower operating costs. They can give developers a competitive edge over buildings at similar price points, but that lack the amenity.

"Developers are going after young families, not just singles. They are trying to keep them for longer than they used to be able to keep them in the past."

— Ryan Severino, senior economist, Reis In recent years, some of the city’s

most experienced developers have added playrooms to older buildings.

Extell Development, the developer behind One Riverside Park, has added playrooms to several buildings it renovated in Manhattan, and some of its new developments.

Amenities Woo Families If good schools entice parents to certain neighborhoods, familyfriendly amenities act as a magnet, pulling families toward a certain property.

That was the case for Stacey Stetson and her husband. After their baby Penelope was born last year, they decided to move from a 1-bedroom in West Village to a 2-bedroom in Battery Park City (they wanted something within the zoning for Public School 276).

By her recollection, they must have looked at every building in the area before deciding on Gateway Battery Park City, a waterfront rental complex near the World Trade Center. ...continued on page 20

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RENTAL HOUSING JOURNAL ON-SITE

Washington Rental Owners Association Washington Rental Owners Association (WROA), formerly know as Washington Apartment Association (WAA), wants YOU to join US and here is why!

We are the oldest statewide landlord association in the state of Washington. We have added a series of full support services for the individual landlord to the already tremendous lobby team that has been fighting for landlords for 61 years! Your membership supports landlords across this state and our entire industry. This non profit organization is one of the most respected groups on Capital Hill and your membership effectively improves the influence we have. This is how you have always been heard on Capital Hill. Now this organization is also how you can get the support you need where the rubber hits the road.

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Rental Housing Journal On-Site • February 2015

15

RENTAL HOUSING JOURNAL ON-SITE • Executive Director – Jim Wiard • President – Kris Buker – Vice President – Brett Stevens • Secretary – Heidi Daniel • Treasurer – Becky Sanders • Vice President of Suppliers Council – Rob Pendleton • Immediate Past President – Gail Duke

18300 Cascade Ave. S., Suite 130 Tukwila, WA 98188 (425) 656-9077 (425) 656 9087 (fax) admin@wmfha.org

Market Report

T

he Puget Sound region of Washington continues its hot streak – enjoying one of the best multifamily and job markets in recent memory.

Locally, rents continue to grow as vacancies remain low, despite new construction.

The Apartment Vacancy Report published by Dupre+Scott found the region’s market vacancy rate was 3.8% in September. The market rate excludes units in new construction in leaseup, as well as properties undergoing substantial renovation. The gross vacancy rate, which includes all units, was 4.7%.

Their forecast expects both the market and gross vacancy rates to climb to 4.7% and 5.7% respectively

in 2015. In spite of new units hitting the market in 2015, job growth, and a preference for renting should create enough demand to keep vacancy rates in a relatively comfortable zone in 2015. However, according to Mike Scott, vacancies will continue climbing in 2016, with the market vacancy rate reaching 5.7%, and the gross vacancy rate hitting 6.6%. Still not a catastrophe, but higher vacancies in 2015 and 2016 will put pressure on managers, Mike says.

Keep in mind, expenses continue to go up, particularly taxes and utilities, at a higher rate than rents, which results in slower growth of NOI over time.

In 2014, the Seattle metro area ended fifth in MSA’s for multifamily

www.re nt a l h o us i ng j our n a l .co m

permitting. Multifamily permits YTD through December, 2014 totaled 11,053 units, 14% higher than December, 2013. There are nearly 12,000 new units under construction to open in the next year.

According to Axiometrics, the U.S. economy continued to show positive signs of growth in December, when employers added 252,000 nonfarm jobs (on a seasonally adjusted basis), according to initial estimates from the U.S. Bureau of Labor Statistics.

That figure was higher than the consensus forecast of 240,000 jobs and was the 11th consecutive month in which 200,000 or more jobs were added. Six of those 11 months exceeded 250,000 jobs, including the past four.

The Seattle-Bellevue-Everett metro area was 8th in the country in job gains, with 53,000 jobs gained in 2014 through November, compared to 36,000 during the same period in 2013. Unfortunately, wage growth at just 2.3% as of the 3rd quarter, 2014, barely outpaced inflation and falls short of the robust growth that will move our economy forward.

Rents in the United States have

continued to increase for the fifth consecutive year, rising an average 3.6 percent in 2014 because of high demand and short supply. The average national rent was $1,124 per month — the highest since real-estate investment firm Reis started tracking the statistic in 1980. Meanwhile, vacancy rates dipped to 4.2 percent, their lowest point since 2000.

National annual effective rent growth continues its upward swing, increasing in December for the 10th straight month to a 4.9% annual rate.

The consensus is, however, that rent growth will slow in 2015, primarily due to the impact of increased new construction. Seattle fell to 10th nationally of the top 50 markets for rent growth, according to Axiometrics, but at a healthy 6.7% annual growth rate. Q4 rent growth dropped to a 5.7% annual rate.

New construction typically rents for higher rent, so the influx of new construction, particularly in urban areas, inflates the average rent statistics. So too does the effect of inflation and considerable renovation happening in the market. Rent growth in many submarkets still exceeds a 5% ...continued on page 17

A Moment To Shine At The Fifth Annual Emerald Awards

Over 900 people gathered on February 12, 2015 as the Washington Multi-Family Housing Association held the fifth annual Emerald Awards. After a lengthy, thorough nomination and judging process of over 300 nominees, the Emerald Award recipients were announced at an elegant black tie gala.

Please join us in acknowledging the accomplishments of the 2015 Emerald Award recipients.

Assistant Manager of the Year

Social Awareness

Community Manager of the Year

Presented by Condo Internet 1-300 Units: Crystal Taylor – Greystar 301+ Units: Nicole Kellogg –Pillar Properties

Presented by Roto Rooter Individual: Annie Jacobsen - Independent Living/ Team: Independent Living/SHAG

Presented by Buy-Rite Carpet Wholesaler 1-150 Units: Anissa Olberg - Pinnacle 151-300 Units: Dale Gentle - Pinnacle 301+ Units: Amanda Hirtzel - Weidner Apartment

Curb Appeal

Affordable: David Bierer - Greystar

Presented by Roto Rooter 1-150 Units: Bentley House - Thrive Communities 151+ Units: Boulder Creek - Simpson Property Group

Portfolio Manager of the Year

Leasing Consultant of the Year Presented by Apartment Guide 1-300 Units: Lauren Smith – Windsor Communities 301+ Units: Sasha Batura - Weidner Apartment

Homes

Homes

Rookie of the Year

Renovated Community of the Year

Presented by Zillow Rental Networks Office: Saniya Regmi - Weidner Apartment Homes Maintenance: Pablo Montano - Greystar

Presented by Sherwin Williams Hubbard’s Crossing – Thrive Communities

Maintenance Technician of the Year Presented by Criterion Brock 1-300 Units: Enoc Castillo - Weidner Apartment

Homes 301+ Units: Ben LaFontaine - Holland Partner Group

Maintenance Supervisor of the Year Presented by HD Supply 1-150 Units: Jose Castro - Weidner Apartment

Homes 151-300 Units: Nick Webster - Bridge Property Management 301+ Units: James “Sparky” Regis - Simpson Property Group

EMERALD SPONSORS

16

SHAG

New Development of the Year Presented by Sherwin Williams 1-150 Units: Joseph Arnold Lofts - Greystar 151+ Units: Via6 - Greystar Affordable: Interurban Senior Living - Independent

Living/SHAG

Presented by Apartment Guide Betsy Schanno - Pinnacle

Industry Partner of the Year Presented by Washington Multi-Family Housing Association Innovative Systems Technology, Inc.

Volunteer of the Year Presented by Washington Multi-Family Housing Association Rob Pendleton, CAS - HD Supply Facilities Maint.

Community of the Year Presented by Apartments.com 1-150 Units: Woodlands at Forbes Lake -

Independent Living/SHAG 151+ Units: Breckenridge Apartments - Weidner Apartment Homes Affordable: Arrowhead Gardens - Independent Living/SHAG

Proudly Presented By

Lifetime Achievement Award Bill Austin

Epic Asset Management

We thank all who joined us for this event.

SAPPHIRE SPONSORS

Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

Market Report ...continued from page 16 annual rate, although the rent growth numbers are declining from 2013.

Concessions are creeping back into the market, particularly in submarkets where the most new construction has taken place.

The national occupancy rate is hovering around 95%, demonstrating that there is still high demand nationally for apartments. Improved job growth, lifestyle and demographic changes are positive factors in favor of apartments. Positive absorption numbers are aided by continued pent-up demand for rental housing, despite new product construction.

With a strong and diverse regional economy, Seattle’s healthy job growth of 3.1% in 2014 included a 12.3% growth in construction jobs.

In-migration to our state and region continue at impressive numbers. Mike Scott reports, according to the Dept. of Licensing, in January, 10,000 new residents moved to the 5 county region, up 32% from January, 2014. In the last 12 months, 112,000 people moved to our region, up 15% from the prior 12 months.

Renting rather than buying a home continues to be an ever-more popular lifestyle choice, rather than an economic decision. The percentage of home buyers nationally continues to drop, despite low mortgage interest rates and a return to rising home values.

Home ownership rates hit a

20-year low at 63.9%, although single family permitting continues to grow steadily. Perhaps more impressive for apartment developers seeking to fill their new developments was the hike in household formations, which came in at 1.7 million in Q4 from only 356,000 in the same period in 2013, credited to a strengthening labor market.

Apartment sales in 2014 set record values as cap rates near 5% remain low per historical levels, driving up prices. These high per unit sales prices lead to increased rents to cover pro-forma’s. Prices per rentable square feet exceed $200, with average per unit prices exceeding $150,000 and climbing. Seattle and Bellevue pricing exceeds $200,000 per unit.

Despite near-record new construction, rent growth continues to be healthy and occupancies favorable. We’ll see if that continues through year end, or if construction will finally have an impact on the rental market and constrict rent growth from the positive trend experienced the past few years.

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Rental Housing Journal On-Site • February 2015

17

RENTAL HOUSING JOURNAL ON-SITE

Property Management: 21 Low Cost Renewal Concessions

W

hat is your customer acquisition costs? What does it costs the property to obtain a new lease? There is advertising, overhead and staff time- all part of the expense for obtaining a new resident. Then there is the customer retention costs.

This article is about retention costs and the use of concessions. I am not suggesting auto-offering concessions as a standard business practice. They are just another tool in our tool box for use when appropriate.

Before getting to concessions an assessment of “why” is appropriate. Why is there vacancy of X? Is your advertising and web presence in order? What is your showing-to-lease ratio? Is staff trained and up to date on tactics?

Concessions for a multifamily assets are not a given. Concessions are often a function of competitive factors from competitive properties in the same submarket as the subject asset.

For example, your property may have more inplace amenities than neighboring properties yet have a higher vacancy rate in 2-bed’s versus 1-bed’s. In this instance, your renewal concessions will be offered only on two-bed rooms with none offered on one-bedrooms.

Gaining further insight into what your competitors are offering requires surveying those properties.

This is best accomplished by a thirdparty service provider to assure independent outcomes. ...continued on page 25

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

T

Instant Tenant Screening Reports & FCRA Accuracy Requirement

enant screening reports typically include a consumer credit report from one of the three major credit bureaus, a civil (eviction) records search and a criminal records search. More comprehensive tenant screening reports may include employment verifications, rental references and a recommendation based on the landlord's rental criteria.

Tenant screening companies are specialized "Consumer Reporting Agencies" (CRA's) - as defined (and regulated) by the Fair Credit Reporting Act [15 U.S.C. § 1681e] commonly referred to as the FCRA. Section 607(b) of the FCRA requires that...

"Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates."

The Consumer Financial Protection Bureau is tasked with enforcement of the FCRA. Much of the focus is on accuracy, of course, since the CFPB recognizes (as

Congress did when crafting the FCRA) that the banking system and, arguably, the economy "...is dependent upon fair and accurate credit reporting".

The three major credit bureaus have taken considerable fire from regulators (the Federal Trade Commission and the CFPB) as well as the media (60 Minutes - for example) - regarding the accuracy of consumer credit reports and the handling of disputes. Here is an excerpt from a previous article on the subject: "The anecdotes are compelling.

Our hearts go out to those whose credit is negatively impacted as a result of identity theft or a mistake on the part of the creditor (or Furnisher as defined by the Fair Credit Reporting Act). But what is the true scope of the problem - what is the error rate and extent to which these errors negatively impact the cost and availability of consumer credit?

The FTC issued its fifth interim Report to Congress regarding credit report accuracy in December 2012 as

required by the FACT Act. The study sampling was 1,001 consumers and 2,968 reports (roughly three per consumer). The study found that 6.6% of reports examined contained errors that when corrected resulted in a score increase - but only 2% of those had a score increase of 25 points or more. Only 2.2% of reports examined had credit score increases sufficient to move them to a lower credit risk classification - reduce their borrowing costs."

So it might be argued that 98% of credit scores reflect the appropriate risk classification - which is not good enough, of course, if you are one of the 2%. We can and should try to do better, but the data does put the problem (and the likelihood of further improvements) in perspective.

A much bigger issue in our view - one that has recently gotten the attention of the CFPB - is the accuracy of non-credit (notably public records) data. The CFPB recently settled claims with two CRA's - for returning erroneous criminal findings (false positives) which negatively impacted job seekers. The

employers were targeted as well - for failing to follow the pre and post adverse action notification requirement - which, had they been followed, may have mitigated the damage.

The problem is the lack of reliable personal identifiers in the public record - forcing us to search on name alone in the case of civil (or eviction) records - name and data-of-birth in the case of criminal records. The problem is most acute, obviously, when dealing with common names.

False positives have been (and continue to be) a significant problem as a result.

While much has been written regarding the impact of inaccuracy on consumers, very little has been written regarding the impact of false positives on landlords and employers. Yet erroneous public records hits can be quite damaging t - causing them to deny residency or employment to otherwise well qualified applicants.

Equally important, of course, is the potential for underreporting - which can have a decidcontinued on page 23

TONY CONTI, CIC

EQ - Apartments, Small Business 18927 - 33rd Ave., West, Suite C, Lynnwood, WA 98036

1-800-803-7000 Fax 425-712-1058 Cell: 206-930-9333 tony@soundviewinsurance.com

Effective January 1, 2015, Shoptalk has been acquired by Jancyn and they will serve your employee evaluation needs. It has been my extreme pleasure to work with all of you over the past 20 years. Yet, it is now time for me to move onto my next great adventure. I am willing to offer leasing training on a limited basis, as an independent consultant. However, I will no longer be involved in secret shopping. For now, your contact at Jancyn will be Vicki Dempsey, VP of Sales & Marketing and a managing owner. You can reach Vicki at: 408-267-2600 ext. 300 or Vicki@jancyn.com. I will be working closely with the Jancyn team as a consultant to help ensure a smooth transition. Thank you for trusting me with your employee evaluations over the years, and now with the transition moving forward!

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RENTAL HOUSING JOURNAL ON-SITE

Attracting Families ...continued from page 13

(Courtesy of LeFrak) The child-friendly amenities really appealed to them, especially the pool, the playroom, the laundry, and the concierge. She takes her daughter to the playroom frequently.

Though she only moved there in September, she has set up a weekly music class in the playroom. The moms who bring their children to participate split the payment for the music teachers.

On top of the convenience of the complex itself, the neighborhood has many different classes for children, like ballet, gymnastics, music lessons, and even Chinese lessons.

“Everything you need for your children all within a five-block radius,” Stetson said.

Stetson said the beautiful views of the Hudson, and the safety of the complex (complete with its security guard), made her feel like she’d moved to “the suburbs of Manhattan.”

Community Maya Autret, marketing director from LeFrak, which runs Gateway Battery Park City, said she has found that residents who frequent the communal areas and interact with each other tend to stay longer than those who live an anonymous lifestyle.

“There’s certainly a story to be told about how more people are choosing to stay in the city after they have families,” said Melissa Pianko, the vice president for development at Gotham West. Pianko lives on the Upper West Side with her husband and three children. Her building has a playroom, as does Gotham West.

(Adrian Gaut) Rose Associates manages 26,000 apartments throughout New York City, with slightly more than half being rentals. Mitch Gelberg, the firm’s senior managing director, said

the appeal of playrooms in properties has increased as more families elect to remain in the city and rent.

Bluerock Real Estate, a national development firm, recently completed Manhattan’s first entirely fullfloor and multifloor luxury condominium tower. The Charles on the Upper East Side features a communal games room for children of all ages, at ground level. The developers predicted that families would want to live in the building’s spacious four bedroom residences.

Residents of all ages want communal recreational gathering spaces, like rooftops, courtyards, lounges, pools, outdoor grills, billiards tables, fire pits. “We also do find demand for communities that accommodate live/work/play,” spokeswoman Dale Pozzi said.

Retaining Families Real estate mogul Sheldon Solow’s recently completed One and Two Sutton Place North—two black towers bordering the East River. But now his firm is planning a playroom for a portion of the huge lobby that connects the two glass towers.

Though still in the design phase, the children’s room is about enhancing the lifestyle of the buildings’ families, according to Jodi Stasse, managing director new developments at Citi Habitats.

The playroom at The Larstrand on West 77th Street. (Evan Joseph) Data from the two most recent censuses shows that families are actually in decline in New York at the expense of single people, according to Ryan Severino, senior economist and associate director of research at Reis.

But regardless, “Developers are going after young families, not just singles. They are trying to keep them for longer than they used to be able to keep them in the past. So by offering these amenities, it gives them a chance to do so,” Severino said.

In Manhattan, 301 buildings have a children’s playroom, compared with 36 in Brooklyn, 13 in Queens, 8 in the Bronx, and 2 on Staten Island, according to data compiled by StreetEasy. from PropertyManager.com a Service of AppFolio

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RENTAL HOUSING JOURNAL ON-SITE

Your Voice Carries the Words of 10,000 Leases!

©

By Ernest F. Oriente, The Coach {Article #225…since 1995}

F

rom the moment you spoke your first word as a small child, your voice and the words you select are often taken for granted—a gift you use throughout your life. As leasing professionals, you know the importance of using the telephone, because this is how a majority of your future residents contact your apartment communities. In this article, we are going to ask you to capture your voice and listen closely to how you are handling each call—a powerful exercise for becoming a leasing SuperStar.

Capturing your voice and words: Let’s start by agreeing that capturing your voice and hearing the words you are using to lease apartments is an important first step. As a leasing professional, how much would your leasing skills and closing ratios improve if you listened to 50 or even 100 of the most recent calls you received from future residents?

Capturing your voice and listening to the words you are using to paint verbal pictures about your apartment community will have a positive impact on your leasing performance and your career in the multi-

housing industry. As a resident manager or property supervisor, imagine the powerful coaching you could do with/for your leasing teams, if you could hear the five best presentations this week, given to future residents?

Tip From The Coach: Using the simplest of tools, place a digital recorder next to your telephone and start the record every time a future resident calls your apartment community. This will give you the opportunity to hear your voice and listen to the words you are using to lease your apartment lifestyle. For a more powerful system, select a vendor who can help you automatically capture, save, and index every future resident telephone call. An important note for resident managers and property supervisors: you must receive written permission from your leasing teams to capture their voices and we recommend a system be used just for in-bound calls from future residents, as these are the calls that increase your occupancy and define property management success.

Learning from your voice-mirror:

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Once you have selected a system for capturing your leasing voice, it’s now time to learn from your powerful voice-mirror. Begin by play the recording of your calls from today and ask yourself these important questions as you listen to your voicemirror: Can I hear the smile in my voice? Was my voice too soft or too loud? Was the speed of my voice too fast or too slow? Am I proud of the way I handled the questions asked by this future resident? If I could re-do this call with the same future resident, what single improvement would I make? Now, continue this process of capturing your calls and listening to your voice-mirror for the next four weeks. Then, call us in 30 days at 435-615-8486 and tells us how your leasing skills and closing ratios improved. We want to hear your success stories!

Tip From The Coach: As a resident manager or property supervisor, imagine how powerful it would be to have a recording collection of the best-of-the-best in telephone presentations to share with a newly hired leasing professional. These powerful telephone presentations

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could also be shared during weekly leasing meetings so your entire team could continue to polish their skills and refine the verbal pictures they are using to invite future residents to your apartment communities. In addition, try comparing these telephone calls to the shopping reports used by your company—and watch to see how the scores of your leasing teams improve.

Linking your voice with your leasing success: As an added bonus, companies like Who’s Calling® or Lead Tracking Solutions® will help you and your leasing teams automatically capture every in-bound telephone call from future residents and will provide you with a special index number that is spoken out by the system at the end of each call. As a leasing professional, this becomes a wonderful audio guest card which you can go back and replay right after you finish speaking with each future resident. By replaying this message right after each call, you can add any additional notes you might have missed during the original telephone call. In addition, if you place ...continued on page 24

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RENTAL HOUSING JOURNAL ON-SITE

he

T Ask

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Northwest

I

n strong rental markets, many leasing employees are faced with the wonderful challenge of being 100% leased. Some apartments are being rented “sight unseen,” and perhaps there are only a few days in any given month where vacant apartments are available to look at before the new residents move in.

For communities that have rented and done away with their model apartments, many leasing consultants are now in situations where they have nothing to show, even if they have unrented notices. The following question expresses this dilemma and the leasing consultant’s frustration: Q: Our property consistently stays full and we typically rent our notices almost as soon as they come in. When people call to inquire about an apartment and I don’t have anything available to show, I will usually refer them to our website or recommend that they call back at a later date. I don’t want to waste their time if I don’t have anything available.

However, lately some callers have been pretty insistent about wanting

to come by even when I don’t have an apartment they can see. Should I really be trying to set appointments when all I can do is hand out a floor plan and give a property tour?

A: This is a challenge, and yet a unique and incredible opportunity for you to highlight and sell many other aspects of your community that you might not normally focus on during an apartment tour. EVERY caller should be extended an invitation to visit your community, whether you have an apartment to show or not. While a website is just one of many “sales tools” at your disposal, it is not the only tool you have. What about your property and the many community benefits you have to offer? Even if you work at a smaller community, you still have numerous benefits to sell. Perhaps it’s the location of your building and the many area conveniences, which no one will truly appreciate unless they make a visit and drive through the neighborhood. Maybe you have an outstanding maintenance staff that is highly visible that a prospective resident would observe hard at work when

visiting your community. What about your friendly residents who are out and about? The ones who smile and cheerfully say “Hello” to everyone they meet. Have you ever considered your existing residents as a “sales tool?” Then, last, but certainly not least, there is YOU!! No website or other form of “inanimate” advertising can take the place of a warm, friendly and VERY enthusiastic person who is excited about their product and what they are doing.

Of course it’s much “easier” to just refer someone to a website or encourage them to check back with you when you have no apartments to show. After all, it does “appear” that you are trying to be “helpful.”

What if you extended an invitation to visit instead? You would definitely have to expend some extra time and energy and get creative to sell your product in a new and exciting way without a “visual.” Perhaps your enthusiastic personality could describe and demonstrate with such animation that you could create your own “visual?”

Of course you want to be honest about your apartment availability

and not get your prospects so “worked up” that you sell them on renting an apartment that is not available for their time frame. On the other hand, maybe there is some flexibility with their move date.

Remember: Part of your job as a sales person is to convince the customer that what you have to offer is worth waiting for.

If you are interested in leasing training or have a question or concern that you would like to see addressed, please reach out to me via e-mail.

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RENTAL HOUSING JOURNAL ON-SITE

A

Staying Safe While Showing Property

s people go about their every day lives, it is common to forget the potential dangers that surround us. Recent tragedies serve as a reminder to the real estate community that the career can also come with dangerous consequences, and real estate professionals must remain mindful of their safety at all times.

In October of 2014, Beverly Carter, a 49-year-old wife and real estate agent was found murdered in a shallow, makeshift grave near Little Rock Arkansas. Although Carter took many standard safety measures including leaving her purse in the car to avoid being a victim of theft and informing her husband of her location, she was still a target. Her killer’s cold-blooded response to the murder, “She was just a woman who worked alone -- a rich broker.”

Across the country in Portland, Oregon, a mother working at a local apartment complex was a victim in what still seems to be a random act of violence. The 29-year-old was stabbed after dark and the killer has yet to be caught.

While statistically women work-

ing in property management and real estate report far more violent crimes than men, it is never safe to assume that men are always safe.

Heather Blume, a property management trainer believes the same rule applies to clients while touring homes and apartments. “Women can attack you just as easily as men can.

White women just as easily as Hispanic or African American men.

Just as we don't make assumptions about whether or not to rent to people based on fair housing, you must not make assumptions of your safety based on appearance.”

Although realtors and property managers aren’t quite the same, both are responsible for touring their

properties with strangers, which is where the job gets dangerous. It goes without being said that it’s difficult to be fully prepared to face a potentially life threatening situation, but there are steps you can take to be better educate yourself on how to exit those situations, or hopefully avoid them all together.

Property Managers who are showing apartments or condominiums can sometimes get a little peace of mind knowing there is an office filled with colleagues not too far away. A luxury most real estate agents showing a home do not get.

Having a “code” with colleagues is a good way to ask for help when a dangerous situation is arising. Blume

and her colleagues use the “red folder tactic.” If a manager ever feels unsafe during a showing they can call the office and ask for the red folder to be brought to the showing, which singles that something doesn’t seem right but there is no immediate threat. If the manager asks for the Yellow folder the threat is higher and someone needs to join the showing or call back frequently to check in.

While some safety precautions are specific to either a Realtor or a Property Manager, like the “red folder tactic”, there are quite a few that should be used by both. Katie PooleHussa from Smart Property Management in Portland, Oregon, broke down what she thought were five very important safety rules to remember: • Take photo ID's from all persons looking at a vacant unit. If there is an onsite leasing office, keep photo ID's in the office as a method of tracking if need be. If you do not have access to a leasing ...continued on page 25

Instant Tenant Screening Reports...continued from page 19 edly negative impact on the business or a property.

Under-reporting is a bi-product of over-reliance on instant (database) public records searches. Don't get me wrong. Database products are quite useful - in the hands of a skilled investigator - who has the time, tools and skills necessary to avoid underreporting and false positives. It is a sole reliance upon database solutions that is problematic due to a lack of consistency and availability of court records and the aforementioned lack of personal identifiers. Exclusive reliance on database products - without the attention of a skilled investigator inevitably results in under (or over) reporting. Over reporting suggests the CRA is either clueless or willful in their non-compliance. Underreporting suggests an acute awareness of the risk by the CRA - who then over-filters the data - resulting in missed records.

Bottom Line All it takes is a few minutes and a pair of eyeballs to deliver an accurate public records search - someone with the knowledge and tools necessary to run additional searches (based on alias' and address history - disclosed and undisclosed). We know from our own experience that these additional searches account for fully one third of valid hits in our tenant and employee screening reports.

Tenant and employee screening companies are required by the FCRA "...to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." Those who do not Rental Housing Journal On-Site • February 2015

are now paying the price as a result of legal or regulatory action or evolving reseller policy - a price previously borne by consumers and increasingly paid by landlords and employers.

Talk with your tenant and employment screening company.

Ask what exactly is included in the report about the source and methodology associated with their public records work. Do they put a pair of eyeballs on their reports and do those eyeballs conduct additional searches based on alias and address history - some of which is undisclosed? Ask what tools they use and what steps they take to confirm a match - avoid false positives. Ask about turn-around time, but beware of those promising instant public records searches. Quality public records results can, however, be returned quickly - often within an hour or so - quick enough, certainly, given the quality difference.

Paul Prudente is vice president and general manager of Moco, Incorporated, a specialized consumer reporting agency focused on delivery of quality tenant and pre-employment screening services for the rental housing industry. He has been at the helm of Moco for nearly 12 years. He is principal architect of its pioneering direct-to-consumer tenant screening facility – marketed under the MyScreeningReport.com® brand – developed in collaboration with the low income housing community and designed to address the needs of a growing independent rental owner marketplace.

23

RENTAL HOUSING JOURNAL ON-SITE

Looking at the Big Picture

A

re you so bogged down in the details of your day to day management duties to take some time and look at the bigger picture? With the pressure to fill empty units, keep the property profitable, and make hundreds of people with very different personalities happy, property managers can sometimes forget to spend some time looking at the bigger picture.

How do you step away from the hustle and bustle of a typical day and look at how you can help your properties grow and prosper by paying attention to the bigger picture?

Here are a few tips: • Spend some time off the property. If you’re managing in an unfamiliar area, learn about the neighborhood outside of your apartment community.

Become acquainted with

neighborhood business owners and learn about the ebb and flow of community life. Are there rumors of a layoff at a large corporation? Will a layoff affect your residents?

• Conversely, perhaps the rumors include the possibility of a large corporation moving into your neighborhood. If true, there may be an opportunity for a future partnership.

• Be aware of current real estate trends. How are competing properties performing? Mystery shop a unit to see what the competition offers. Learn about current home financing rates and how they may possibly affect your property occupancy rates.

• Be aware of where your profit margin is at all times. For

instance, if you’re currently facing a high vacancy rate, you can determine how much in incentives you are able to provide potential residents without destroying your bottom line. If you do have a high vacancy or resident turnover rate, determine the root cause and how to fix it.

• In addressing the two issues above (high vacancy and resident turnover) you may need to invest in long term improvements such as updated appliances or a more relaxed pet acceptance policy, which may make more sense than a shortterm lease-up strategy. However, if your vacancy rates are truly an anomaly, more generous incentives may be the answer.

Just be sure you know and

understand the implications of both options.

• Invest in software and other tools that will assist you in doing your job accurately and efficiently, both now and in the future. It’s a waste of money to purchase a product that cannot perform admirably, both immediately, and two years from now. Buying a product that needs to be updated in six months is not a solution.

Planning for the future is.

Taking some time and becoming more proactive about the future of your property will pay dividends in both the short and long term.

by Mary Girsch-Bock Published Courtesy of PropertyManager.com

Words of 10,000 Leases ...continued from page 21 this special index number on your guest card or traffic log, you can replay this saved call minutes before your appointment with each future resident! Wow! Can you imagine the response you are going to receive from future residents when you can remember the exact details of your telephone conversation from a week ago? More importantly, how will this personalized approach increase your leasing success?

Tip From The Coach: As a resident manager or property supervisor, this special index number can serve a dual purpose. For example, your leasing professional, Mary, speaks by telephone to Rick Brown on Monday and schedules an appointment for a Friday morning leasing tour. Mary calls in sick on Friday so you can now ask Bill to cover for Mary and have him use this special index number to hear Mary’s original telephone call with Rick Brown. What a concept! Bill is right in step with Rick Brown, a future resident, and Bill has a better opportunity to lease a new apartment to Rick because he has the information he needs to close this sale.

Want to hear more about this important topic or ask some additional questions about how to capture your voice-mirror or how to link your voice with your leasing success? Send an E-mail to ernest@pow-

erhour.com and The Coach will E-mail you a free PowerHour invitation.

Author’s note: Ernest F. Oriente, a business coach/trainer since 1995 [33,300 hours], serving property management industry professional since 1988--the author of SmartMatch Alliances™, the founder of PowerHour® [ www.powerhour.com ], the founder of PowerHour SEO [ www. powerhourseo.com ], the live weekly PowerHour Leadership Academy [ www.powerhourleadershipacademy. com/pm ] and Power Insurance & Risk Management Group [ www.pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing, national real estate and apartment building insurance, SEO/SEM web strategies, national WiFi solutions [ www.powerhour.com/propertymanagement/nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ www. powerhour.com/propertymanagement/ employeepolicymanuals.html ] and social media strategic solutions [ http:// www.powerhour.com/propertymanagement/socialmedialeadership.html ].

Ernest worked for Motorola, Primedia and is certified in the Xerox sales meth-

odologies. Recent interviews and articles have appeared more than 8000+ times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 225+ articles for the property management industry and created 400+ property management forms, business and

marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail ernest@powerhour.com or visit their website: www.powerhour.com

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Renewal Consessions ...continued from page 18 Many “gift-card” options can be purchased at a small discount to face value if purchased in bulk, particularly with local vendors that offer personal services. They are gaining a new customer, after all.

There is a reason for the order of concession below; the top five add value to the property in some way; the first five concessions are either property upgrades or increase longevity of in-place fixtures. This list provides you with a starting point w for selecting concessions to gain renewals.

1. Refresh paint or adding an accent wall 2. Replacing older living room or dining room light fixtures 3. Replacing standard light fixtures with ceiling fans 4. Carpet Cleaning 5. Replace older blinds 6. Car wash gift card 7. Restaurant Gift Cards 8. Spa treatments 9. Go phones / trac phones gift cards 10. A gift to a charity selected by the Resident 11. Free parking for one month 12. Dry cleaning gift card 13. Dog grooming 14. Cooking classes 15. Hair cuts 16. Shoe shines 17. Movie tickets 18. Specialty ice cream

19. Apple Store 20. Oil change 21. Wal-Mart / Target / Kohl’s / Macy’s / 22. Pizza (always popular) When selecting local vendors for concessions, consider proximity to the multifamily asset; the closer the better as these will be perceived as having high value because the Resident will know exactly where the vendor is located.

Concession should have a similar perceived value- not necessarily an equal value.

Offer no more than two at one time. Decide on an initial set of two concessions and test for responsiveness. Keep testing until you have two that people respond to equally well.

There may be a difference in response rates due to the season or weather. People love cooking classes during cold months and car washes in summer, for example. Residents will give to a charity during the holidays or select the spa treatment to give as a gift. There is no reason to guess when you can test. Testing will lead you to the right offers at the right time.

by John Wilhoit Jr. Published courtesy of MultifamilyInsight.com

Staying Safe ...continued from page 23 office for safe-keeping, make sure that you tell someone who, what, and where you will be when.

• Create a policy that no showings will be done after dark. In the Summer, maybe that time is 8pm.

In the Winter, no showing will be done after 5pm.

• Use a "buddy" system. If you have someone else available to go along on the showing, then you can use power in numbers.

w

• When you arrive to the property, open the front door and allow the people or person to walk-thru the property on their own. Maybe you mention some points of interest for them to check out when they're inside, but other than that you will be waiting on the porch if they have any questions.

• Know your surroundings. Make sure that the exterior illumination is up to par and keep trees and shrubs well trimmed. Be aware of any potential hiding spots. Most importantly, use your intuition. If something doesn't seem right then it's probably not.

Jenny Johnson, a realtor also in Portland, Oregon, agrees that using a buddy system is a key factor in keeping herself out of harms way, “I always have a mortgage broker or another agent do open houses with me. If there's a case I find myself alone, I always have cell phone in

hand and stay close to the front door.

It's important to verify all clients.

Make sure they are legitimate by talking to their lender.”

Supplying pepper spray is an inexpensive way to ensure you and your employees can defend yourselves if an altercation were to occur.

Doorstops to prop open front doors should be brought to every showing.

It is also beneficial to know key selling points of the property to point out to clients so they can guide themselves through the showing allowing you to stay by the front door. This makes it easier to escape if there is ever a harmful situation.

Tracey Hawkins, a former real estate agent now teaches self-defense classes. Hawkins believes that while obtaining a real estate license and learning how to write contracts and ethic rules it should be a requirement to learn self-defense. The National Association of Relators President, Chris Polychron, believes it may take a bit of convincing to make 50 state’s licensing boards change their regulations to include mandatory safety and self defense classes, but believes it will be worth it, even to just save one life.

By Devan Gilbert Staff Writer Rental Housing Journal

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Dirty Little Secrets of Family Business

fter years of hard work, you’ve built the family business into a great success and you take pride in meeting the challenges that each day brings.

At some point, though, the day arrives when it’s time to turn the reins over to the next generation.

That can be an exciting moment or an anxiety-ridden one, depending on what has gone on before to prepare for the momentous occasion.

“Laying the path to a successful family-business transition requires a bit of threading the needle,” says

Henry Hutcheson, author of the book “Dirty Little Secrets of Family Business”.

“On the one hand you don’t want to paint an overly rosy picture to the next generation. That could create a sense of entitlement and the false perception that running a business is easy and all you need to do is count the money and show up every now and then to check on things.”

At the same time, he says, if you put too much emphasis on the difficulties of running a business and the stresses that come with it, your sons

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and daughters might not clamor to be first in line to take over.

Ideally, it’s best to think ahead and start grooming the next generation long in advance, Hutcheson says. Give them summer jobs while they are in high school and college so they can start testing their abilities.

When they join the family business full time, find initiatives for them to work on that involve group dynamics. But also hand them individual projects where they hold sole responsibility for the results.

“It’s critical when you are selecting the next leader to realize that it’s not all about who will lead,” Hutcheson says. “It is also about ensuring that those who are not selected are in support of the decision and can work as a team with the new leader.”

Hutcheson says there are four key ingredients to developing the right person to take over the family business.

• Independence. Next generation leaders must have confidence in themselves, their thoughts and their beliefs. “Much of this can be developed while working in the family business by constructing and leading significant projects,” Hutcheson says. But one shortcut to accomplish

this is to work for some other company early on. Many multi-generation family businesses like to make that a requirement for family members.

• Competence. This is more than just being able to do the work. It means developing bottom-up experience. Not just being the accountant, but being able to reconcile the accounts and perform the journal entries. Not just being sales and marketing manager, but having been on a quota and worked the trade shows.

Experience doing some of the dayto-day grunt work can pay dividends down the line.

• People skills. “It’s not enough to just be smart and confident,” Hutcheson says. “You need to be able to work with people.” He notes that in the book “Emotional Intelligence,” Daniel Coleman outlines two studies that measured the success of a batch of high school valedictorians and Harvard graduates. Those who were able to perceive the emotional state of others and react to it appropriately proved to be the most successful.

• No special privileges. The person in line to take over the family business needs to be willing to show up to work on time, stay late, take on special projects and be measured by ...ontinued on page 27

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Rental Housing Journal On-Site • February 2015

RENTAL HOUSING JOURNAL ON-SITE

Vacation Rentals – Make It Simple for Your Guests

By Alan Langston, Executive Director AZREIA

F

riends of mine recently became a reluctant landlord. While they have another single family rental, a townhome purchased as a place for a family member to rent became a rental on the open market.

They decided to rent the unit as a short-term vacation rental. Having started my own real estate investment portfolio over 30 years ago with a vacation rental, they were picking my brain about that type of property.

There have been a lot changes in the vacation rental business over the last few years. The advent of Vacation Rental By Owner (VRBO) and other similar services has made it much easier to market the property. I am a routine user of VRBO, having used the service to rent properties all over the world. I like renting a house with nice furnishings, in a nice area for much less than a hotel room. I really like dealing directly with the owners when finalizing a transaction to rent their property. I mentioned to my friends that the best experiences we had with VRBO included when the property had information packets and even small signs displayed around the property that helped us know how to find things, use the property easily and to its fullest.

If you are renting short-term vacation property think about implementing a few things to make your vacationer’s stay easier and nicer, as well as to better protect your property.

1. Provide complete and easy to understand access instructions. If you are using lock boxes or electronic entry be sure to explain how the codes should be protected so they are not compromised.

2. Label the contents in kitchen cabinets and drawers. This makes it easy for your guests to find the items they need. It is

amazing how much easier it is for your guest to put things back where they got them from. It also sends a subtle message about how seriously you inventory the contents of the unit.

3. Provide convenience items. Extra

stored in your welcome packet, as well.

5. Staples. Please don’t skimp on paper towels, toilet paper, soap, etc. Even coffee and filters for a couple of days is a good thing.

No, I’m not saying to eat into

8. Fireplaces. Guests need to know if they can burn real wood or just the fake logs, how to use a gas fireplace and/or gas lighter.

Providing the number to call to see if it is a “no burn day” could prevent an unpleasant experience with authorities. Consider putting all this on a small sign close to the fireplace.

9. Label the light switches. I know it sounds silly, but if the switches aren’t intuitive, it is a nice touch.

I intentionally didn’t go into everything you need in a welcome packet, check-in/check-out procedures or providing a list of restaurants and things of interest in the area or the necessity of your guest being able to reach you quickly. This list is just intended to give you things to think about, so your phone won’t ring as much and your guest will want to return many times in the future.

batteries for anything in the unit that is battery operated like TV remotes and flashlights. Light bulbs for all fixtures including kitchen, baths, halls, garage, patios, etc. Label the drawer where they are located and be sure to mention in your welcome packet.

4. Special cleaning products. Okay, so your short-term guest probably won’t clean anything, but many people rent for a month or two and they will. If anyone decides to clean anything from a spill, stain on the carpet, etc. you want them to use cleaners you know won’t damage the flooring, countertops, cabinets, paint, etc. Be sure you label where the supplies are kept and, put instructions on their use and where they are

your margin. Just let your guests get through a day or two before having to run out for normal things.

6. Operating instruction for all appliances that may be unusual.

Example: Many people have never heard of an evaporative cooler much less how to operate one. If your unit has both an evap and an A/C, be sure to explain when to use each.

7. Entertainment equipment. If you have anything other than normal TV, be sure to explain how to use the TV, satellite, surround sound, DVD, CD, IPod, etc. All of the remotes can be very confusing and if not explained clearly, your phone is going to ring.

Smarter investing, Alan Langston Executive Director Arizona Real Estate Investors Association – AZREIA American Rental Property Owners & Landlords Association - ARPOLA 480-990-7092 www.AZREIA.org www.ARPOLA.org AZREIA serves its 1700+ members through chapters in Phoenix, Tucson and Prescott providing extensive market information, education, networking events and support. ARPOLA serves members in all 50 states providing assistance with ownership and operational aspects of rental property.

Dirty Little Secrets ...continued from page 26 the same metrics as everyone else.

“This will show that you are part of the team and that you want to be judged on the merits of your work, not your bloodline,” Hutcheson says.

It will also help the next generation gain the respect of co-workers.

Henry Hutcheson is president of Family Business USA and specializes in helping family and privately held businesses successfully manage transition, maintain harmony, and improve operations. His newest book is “Dirty Little Secrets of Family Business: How Rental Housing Journal On-Site • February 2015

to Successfully Navigate Family Business Conflict and Transition” (http://dirtylittlesecretsoffamilybusiness.com). He’s also quoted in “Kids, Wealth, and Consequences” and “Sink or Swim: How Lessons from the Titanic Can Save Your Family Business.”

Hutcheson grew up working for his family’s business, Olan Mills Portrait Studios. He studied psychology and has an MBA from Columbia Business School, and is a popular speaker at professional, university and corporatesponsored events.

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