Rental Housing Journal On-Site July 2016 by Professional Publishing, Inc

Rental Housing Journal On-Site

July 2016

3. You May Want to Rethink That Lease Renewal if You Are Planning to Sell Your Small Plex 4. Tips for Taking Better Photos When Marketing Your Property

7. Make Your Units Spacious and Cohesive With New Flooring 8. 5 Steps You Can Start Today to Get More Resident Lease Renewals 9. Mid Year Association Update

5. Death in a Unit

10. Property Mangers’ Proactive Response to Soaring Rents and Price Controls

6. Five Lease Renewal Points of Contact

11. Dear Maintenance Men – Mold, Flush Valve Seats, Heating and Air Conditioning Preventative Maintenance 12. Ask the Secret Shopper – Appropriate Appearance 15. Five Proactive Ways to Gain Lease Renewals

www.rentalhousingjournal.com • Professional Publishing, Inc 17,000 Papers Mailed Monthly To Puget Sound Apartment Owners, Property Managers & Maintenance Personnel Published in association with Washington Association, IREM & Washington Multifamily Housing Association

Single Best Way for Property Managers to Get Promoted What is the Single Biggest Secret to Being Promoted From Property Manager to Regional Manager, Vice President or CEO?

s EVP at MultiFamily Traffic, I have worked with thousands of property managers, regional managers, marketing managers, CEO’s etc. I have seen them come and I have seen them go. Recently my friends at Rental Housing Journal asked me what the number one trend is in our industry is. My answer is this, management companies are desperate for rock-star talent and when they find it they will promote that person as high as they possibly can. So, what is the secret to being promoted in our industry? The answer may surprise you, it’s not hard work and it’s not who you know. It’s all about how well you can manage the asset and how profitable you can make it. If you

Seattle Ranks 3rd for Highest Metro Rent Growth pacity. Initial lease-up for most new additions is registering at a very healthy pace, and we’re managing to squeeze a few more residents into an existing stock that’s been essentially full for quite a while.”

emand for U.S. rental apartments surged during the second quarter of 2016, gaining momentum after a sluggish performance in the first three months of the year, according to a new report from the RealPage.com MFP Research Division. The occupied apartment count across the nation’s 100 largest metros increased by 127,402 units in the second quarter, according to the report. This is one of the biggest quarterly demand totals posted throughout recent years, topping 2015’s second

quarter demand volume by 23 percent. Furthermore, apartment demand from April to June well surpassed completions totaling 67,550 units, according to MFP Research. “Any concerns that the market couldn’t handle this year’s increase in apartment deliveries appear unfounded for the moment,” Greg Willett, chief economist of RealPage, said in a press release. “As we’ve hit prime leasing season, the greater product availability—brought by sizable new supply—is revealing bigger product demand ca-

Seattle – The latest Apartment Insights survey shows rents increasing 4.1% over the first quarter. The vacancy rate plunged to 3.86% according to Tom Cain of Apartment Insights. The data are from his Seattle firm’s 2nd quarter statistics and trends on 50+ unit properties in the King/Snohomish market

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Vacancy Rate Hits New Low; Rents Surge

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Apartment Occupancy Returns to Peak Level U.S. apartment occupancy inched up to 96.2 percent in the second quarter, regaining the bit of ground lost in late 2015 and early 2016. Current occupancy matches this economic cycle’s previous peak rate seen in the third quarter of last year. The only time occupancy has been tighter was at the height of the tech boom in 2000 and early 2001. “Occupancy remains stronger than the norm during past periods of substantial construction,” Willett said in the release. “The fact that few young

Vacancy: 3.86% The vacancy rate for our nonrandom survey of conventional, stabilized 50+ unit properties in the King/Snohomish market is 3.86%. This is down from 4.21% last quarter. It was 4.06% a year ago. continued on page 16 Advertise in Rental Housing Journal On-Site

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Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

You May Want to Rethink That Lease Renewal if You are Planning to Sell Your Small Plex

f you haven’t raised your rents already, I’m sure the rent increase notices are in the mail. I’m also sure that some of you have tenants that you can’t wait for their leases to end so you can move their rents up to market levels. However, before you sign any new lease agreements you need to make sure you are not planning on selling first. Rising rents have caused small plex (2-4 units) property values to increase significantly over the past several months prompting many owners to sell and exchange into larger multifamily properties or different asset classes. If you are considering a disposition, here are a couple things you need to be aware of: 1. Locking your tenant into a lease is also locking the value of your property into place. If you sign a one year lease at less than market rents you are asking a potential buyer to take on your existing tenants for a guaranteed period of time. It is not appealing to investors to buy an underperforming property at proforma values. The better plan of action is to leave them on month-

to-month tenancy and continue to increase rents anyway.

2. You are turning away owner occupy buyers. The majority of offers that we are seeing on small plex properties are from owner occupy buyers using FHA and VA loans to buy. If you have your units tied up in leases, they may not be able to move into the property for several months or a full year causing these buyers to look elsewhere. These buyers are usually willing to pay more than the typical investment buyer and If you are looking to achieve retail values, these buyers may well be your best audience. For new tenants, consider a month-tomonth agreement so that if you do encounter an ‘owner occupy’ buyer they will be able to evict the tenants within a reasonable amount of time and move in to the property. There are a few items you should consider if you are trying to make your property more appealing to these owner occupy buyers aside from passing on unwanted leases:

1. Think about your small plex the same way you would if you were selling your private residence. I am not suggesting that you stage the property or have open houses.

However does it have curb appeal and does it look livable? Things that may not scare away a seasoned continued on page 19

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Rental Housing Journal On-Site

Tips for Taking Better Photos When Marketing Your Property

By Katrina Langer and Jeffrey O’Connor

ccording to Buildium’s State of the Property Management Industry Report, over two thirds of property owners feel unequipped to effectively market residential properties. When it comes to marketing a property, this can include a variety of tactics, whether it’s listing properties on websites or working with clients and brokers for referrals. While property managers and landlords might have

different approaches to how they market their rentals, it goes without saying that the ability to show off a residential property through photos is the foundation of vacancy marketing. That being said, there are a few important things to keep in mind when taking photos for your property listings. While it would be nice to hire a photographer, it’s not always within the budget of a property manager, landlord

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estate. This article will dive into tips and best practices for using a smartphone to take property photos.

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Rental Housing Journal On-Site

Death in a Unit

By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

t is not uncommon to have a resident pass away at a property, whether in their apartment, on the grounds or even in a hot tub or pool. Sometimes, the on-site manager can anticipate this in advance, if a tenant is elderly or ill for example. Good on-site managers make sure to check in on such tenants and will notice if the tenant has not been seen or heard of recently. Other deaths are sudden or even violent and require training to handle properly. If you believe that one of your tenants might be in trouble or may have died you can call the police to do a wellness check. A tenant may be incapacitated

inside a unit and unable to call for help. If the police find a body they will call in the coroner, investigate the cause of death, and notify the next of kin. If you discover a body, you can check for signs of life but do not disturb anything in the unit or vicinity. If a person is non-responsive, call 911. If you are an onsite manager also call your supervisor and your supervisor should notify the property owner. The police will request any information on the deceased that the building management might have, so their file should be readily accessible. Check

for emergency contact information as the police will use this to identify the next of kin. Managers should ask the police to let them know once the next of kin have been notified and also request a copy of the police report for the tenant files.

Leasing a property after a death Once the body has been removed the management may not be given access to the unit until the coroner and the police have completed their investigations. The authorities will advise when it is O.K. to re-enter the apartment.

When you have been granted access to the unit you must work quickly to prevent any permanent damage. If there are any pets the emergency contact needs to know that they require care. If no one is available to take care of the pets animal control should be called. The unit should be cleaned as soon as possible. Any items that are contaminated with bodily fluids will need professional cleaning or removal, (carpeting, flooring, chairs, mattresses, walls, sheetrock). Jeff Darr, owner of Crime Scene Service in Monroe, NC noted continued on page 20

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Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Five Lease Renewal Points of Contact Another well know rule of multifamily operations is that higher lease renewal rates save time and money. A lease renewal reduces marketing expense and vacancy loss. Also, retaining an existing resident substantially reduces make-ready costs, whereas, there may be some interior items addressed at renewal, the extended make-ready process is postponed until such time as there is a move out. Following are five points of contact, or marketing methods (or touch points) to implement when marketing to existing customers to obtain lease renewals. Are you using all five? In person. ‘Face-to-face is always the best option to obtain a renewal. Personal contact that includes eye contact, verbal language and body language, an opportunity to address any concerns in real-time all lead to a higher probability of obtaining the renewal. In fact, the four remaining methods noted represent methods for gaining that face-toface meeting.

By John Wilhoit Jr., Mutifamily Insights

ust like in any other business, marketing in multifamily has core groups of people to focus your marketing efforts on. One of these core groups is current residents.

A well-known rule of marketing is that it is easier to sell to an existing customer than to a new customer. For starters, the existing customer is familiar with your products, customer service and pricing.

Telephone While it seems that fewer people pick up their phone for actual telephone conversations most will listen to their voice mail. This is an opportunity to use a scripted “commercial” to present

the benefits of renewing now. Consider being sent to voice mail as an opportunity to present a 30-60 second sales presentation for renewing their lease.

Email Direct email marketing research tells us that people often do not make a buying decision via email until after the fifth (and sometime seventh) email contact. This tells us that a one-anddone email has no effect on the intended outcome we desire; a lease renewal. Consider email as an additional thread in the quilt you are weaving towards increasing renewal rates. Text Text messaging is not as age specific as you may believe. Even old people (like me) read text. Like with telephone calls, you may not get a return text, but sending the text assures that you have obtained yet another point of contact with your resident. Snail mail Regular U.S. Postal mail delivery is often overlooked, this is yet another point of contact that rounds out the methods for contacting current residents. After all, you know their mailing continued on page 23

Advertise in Rental Housing Journal On-Site Circulated to over 20,000 apartment owners, on-site and maintenance personnel monthly.

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Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market 6

Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Make Your Units Spacious and Cohesive With New Flooring

By Mark Voykovic, Division Merchandise Manager, Flooring, The Home Depot

s the apartment industry continues to see growth, tenants are looking for the best amenities and value in properties, putting pressure on property managers to keep units looking modern. Flooring is often crucial to impressing potential tenants. New technology in vinyl, laminate, tile and wood offers more options for property managers, often at affordable costs, allowing you to generate a great return on investment.

Vinyl Historically a good option for projects with smaller budgets, new advancements in vinyl give floors a unique, high-end look with a durable finish.

Instead of the sheet vinyl youâ&#x20AC;&#x2122;re used to seeing, many types now feature separate pieces that more closely mirror the look of ceramic tile. You can even grout some new types of vinyl, making the floor look more traditional and unified. Different installation options include peel and stick technology, as well as click-lock systems, helping reduce labor costs and increase savings. Vinyl is also 100 percent waterproof, which has always made it a good choice for kitchens and laundry rooms.

Laminate Laminate flooring has also been advancing in durability, versatility and

Rental Housing Journal On-Site Âˇ July 2016

style. Not only are laminates scratch resistant, but some newer products are even water resistant â&#x20AC;&#x201C; withstanding household spills for as much as 24 hours. This technology allows property managers to install laminate in areas such as bathrooms and laundry rooms. Due to the advancement of the single lock system, laminates can be installed easily and quickly, reducing labor costs. When it is time to replace or repair units, you will save significantly by replacing a single plank versus the entire floor. And when you do install laminate, the finished product is going to look better than ever. Digital printing is so

advanced now that certain styles are becoming difficult to distinguish between laminate and more expensive materials like wood.

Tile Tile is constantly evolving. Floor tile has progressed substantially, becoming sharper and more realistic through those same advancements in digital printing that benefit other materials like vinyl and laminate. Wood tile looks like wood, marble tile looks like marble, and so on. Higher end options allow you to grout and seal at the same time, eliminating the need for a second continued on page 17

Rental Housing Journal On-Site

5 Steps You Can Start Today to Get More Resident Lease Renewals By Heather Blume, www.propertymanager.com

want you to get the most out of the 7 minutes it will take you to read this article. They say, time is money, but more importantly, time is opportunity. With that in mind, here are 5 ways for you to capitalize on the opportunities in front of you today to help you get more renewals tomorrow!

1) Contact Information Audit – If you haven’t done one of these recently, it’s well past due. I am aware of how tedious it is to call every single resident and confirm or gather their contact info, but doing this serves some great purposes. First, you need that info. And you need more than just a phone number. With the prevalence of throw and go cell phones these days, you need a contact method that’s a little more dependable, namely email. I’m a big fan of also gathering permission to text your residents with information at this point as well. Secondly, when you make it a point to call every resident, you’re TALKING TO EVERY RESIDENT. You have a chance here to touch base with your customers and take the relationship temperature – Do they need a work order that they haven’t thought of? Are they still pleased with their home? Have little problems been building into big frustrations?

This a good chance for you to root out those problems!

2) Work Order AuditIf your office staff or maintenance staff doesn’t follow up on every work order done each week, this is a good time to start. Satisfacts Research has found direct correlations between outstanding and poorly completed work orders and resident turnover, and all it takes is a phone call, email, or text message to check in with your customers and make sure that the work was done to their standards. If you’re working in a busy office, make it your goal to follow up with 10 residents a day. Just 10. You spend more time than that on Facebook each day looking at people posting pictures of their dogs. 3) Get “Micro-Managey” with Your Property WalksThat’s right, even when you do get a second to sit down, I’m asking you to get up out of that chair and walk your property. I want you to scrutinize imperfections like you were the biggest micro management manager on the planet. Take with you a legal pad and draw a line vertically down the middle. On one side of the line write “NOW” and on the other write “TBD” and list

every single problem that you see in one column or the other. In the NOW column, write down little problems and short projects that you’ve been overlooking or procrastinating on. If it is a small thing that will take 5 minutes of a tech or leasing consultant’s time, then

divvy up that part list and hand it out to your team, keeping some tasks for yourself. For the larger tasks, sit down with your maintenance supervisor and management team and get them scheduled on a calendar. If you don’t set a date, continued on page 17

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711 Powell Ave. SW, Suite 101 Renton, WA 98057 (425) 656-9077 • (425) 656-9087 (fax) admin@wmfha.org

Executive Director - Jim Wiard Treasurer - Sheri Druckman

Board President - Brett Stevens Vice President - Becky Sanders Vice President of Suppliers Council - Rob Pendleton Immediate Past President - Kris Buker

Secretary – Laura McGuire

Mid Year Association Update

016 has been an exceptional year so far for the Washington Multi-Family Housing Association. WMFHA continues to be the go-to resource for career development, legislative guidance, and business partnership-building programs. We are a vibrant group of dedicated professionals working together for mutual support and advancement.

Legislative Advocacy A perfect storm has impacted the local rental market – changes in demographics and consumer preferences, excellent job growth, high out of state in-migration, and pent up demand for rental housing has tipped the balance of supply and demand. This has led to increased rental pricing as owners are recouping losses in rents and values from the recession. Increased rents along with stagnant wage growth have resulted in discussions of housing affordability. There is strong movement to increase funding for development of affordable housing, such as Seattle’s proposal to increase the Housing Levy to create more affordable housing. Unfortunately, ad-hoc legislation pushed forth by the Seattle City Council can have a chilling effect on housing affordability if they continue to add costs and operational impositions to

the management of housing. WMFHA will continue to seek reasonable and productive solutions to the needs of residents of our communities. Through the resources available from WMFHA’s Political Action Committee (PAC), our Government Affairs team continues to engage Seattle and state policymakers to educate our government officials of the valuable impact the housing industry makes to local communities. We will continue to support candidates who understand the strong contribution rental housing has on local economies. We are connected to national issues through opportunities provided by the National Apartment Association. A contingent from WMFHA traveled to Washington D.C. this spring to continue strong grassroots efforts to get involved in legislation at the federal level.

Educational Opportunities Due to the new construction in our industry as well as increased sophistication of residential property management, qualified and trained personnel are in high demand. Management companies are increasingly realizing that in this competitive market, investment in their employees is critical to their success and their bottom lines.

As such, our national designation courses such as Certified Apartment Manager (CAM) and Certificate for Apartment Maintenance Technicians (CAMT) are growing in demand. Members have been able to take advantage of numerous scholarship opportunities for educational programs offered by WMFHA. Becoming a designate shows your commitment to your career. The association held our first ever Career Fair this spring on National Apartment Housing Day, allowing our member companies to share their open positions with job seekers looking to get into property management. Several great candidates were hired from this Career Fair, bringing in new skillsets to our industry.

Networking Events Multiple established events continue to see great success and meet the needs of our members and their employees. The annual Emerald Awards celebration, with attendance of 1,000 industry professionals, was a heart-warming affair to honor the best of our industry. An awards event was also held in Eastern Washington, allowing our membership in Eastern Washington to celebrate their best of the best. Spring educational conferences and trade shows like EdCon and Mainte-

nance Summit were fantastic successes. Quarterly membership luncheons bring national subject matter experts to speak on issues of importance to staying on top of an ever growing industry. Membership After winning the National Apartment Association’s Membership Growth Award in 2015 for the fastest growing association across the country, WMFHA has added so far this year 11 new management company members, 64 apartment communities adding 11,600 units, and 37 new supplier member companies. The value of membership in the association is through access to information and relationships developed as a result of membership in the local trade association. Our newest promotion is MUM’s The Word!, a Members Using Members culture shift for the association. Members support each other by utilizing and promoting member companies. Property management companies put first emphasis when selecting vendors to current WMFHA members. They know they can count on quality service companies by utilizing current WMFHA member service providers. The number of member companies utilizing NAA’s Click & Lease lease continued on page 18

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For Tickets and Additional Information Visit Us at www.wmfha.org Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Property Managers’ Proactive Response to Soaring Rents and Price Controls By Marc Courtenay in Articles, www.propertymanager.com

fter nearly 6 years of rising rents and declining vacancies, ideas for solutions have become both a hot economic and political issue. In California, no less than the governor has become interested. The cost of housing is so high in many areas of California that paying rent or a mortgage often costs half of a household’s income. This dilemma strikes both the working poor and increasingly the middle class. Property managers are keenly aware of this ongoing conundrum. They are often caught “between a rock and a hard place” to please their owner-clients while keeping rents at reasonable levels.

Regularly subscribe to and read the articles available from trusted industry sources like us.

they know what is going on by being their reliable source for the latest news and trends.

While there are no simple solutions, there are a number of proactive steps property management can initiate to stay ahead of the learning curve. Why wait for a crisis to hit your area when you can act now. Here are some suggestions: 1. Monitor the average rents in your area on a monthly basis. Contact other property managers and rental housing providers to discover the fair market rent rates for 1, 2, and 3 bedroom units.

3. Consider being involved with both local and state laws to require implementation of regional housing plans that are equitable to both owners and residents. Remain objective, avoid myopia.

6. Join organizations or industry “think tanks” looking for equitable remedies. Contact local legislators and tell them you’d like to be part of a panel or committee to explore solutions.

2. Carefully peruse the latest, most reliable news sources regarding public sentiment on this issue.

4. Stay fully apprised of changing laws and regulations. Attend (or assign someone) public hearings about proposed changes in ordinances and impending rent control measures.

7. Prepare yourself and your owner-clients for unexpected possibilities. Make your management practice so efficient, your rents so contemporary, that a mandated rent-freeze is tolerable.

5. Reach out to your clients and be aware of their attitudes and perspectives on the topic. Make sure

Our readers know that effective, time-saving technologies can help accomplish suggestion #7. You might not

be able to control the future of rental rates, but you can control your cost of doing business. Whether you’re a small property management firm or a large, growing one, be open to learning the latest ways to cultivate growth and maintain a competitive advantage. Technology is one of the keys! The right property management software should not only help build your business, but should adapt with you as you continue to evolve in today’s fast-changing property management marketplace. There’s a free guide to help you Grow Your Business with Property Management Software. Download one and find the right technology and features that can help improve all areas of your business. Owner and resident retention, process efficiency, staffing, leasing, and security are just some of the ways that state-of-the art property management software can serve you. Rents won’t keep rising forever, so take steps now to maximize today’s rates while preparing for inevitable changes.

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Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

DEAR MAINTENANCE MEN Utilitarian Upgrades, Smelly Sinks and Fixing Fans

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men: I have noticed the base molding in the living room and leading into the kitchen is starting to come off the wall. The corners are splitting and it is starting to look very rough. What do you think is causing this? I don’t see any water anywhere. Randy

Dear Maintenance Men: I have a toilet that runs every ten or twenty minutes. I have replaced the fill valve, the flapper valve and I have even scrubbed under the rim! In other words, all the items I can think of that are replaceable in the tank are new. What else should I be looking at? Sam

Dear Randy: We would bet you do have a water problem somewhere. Chances are it will be traced to the refrigerator. There might be two issues you can look at. First check that the drain line for the defrost cycle is not clogged and two if the refrigerator has an icemaker, that the line is not leaking. Chances are the icemaker line has a hole or the drain line is leaking and the walls are sucking up the water. That is why you don’t see any standing water. Look under the fridge or pull out the fridge and look at the water line. It should be a small quarter inch nylon or polyethylene line; often they are white or translucent in color. If the water line goes though the cabinets to the kitchen sink; follow the

Dear Sam: You replaced all the easy ones!! When all else fails on a toilet leak down issue; it is time to put on your rubber gloves and get an adjustable wrench. Chances are the problem lies with the Flush Valve Seat. The rubber flapper valve seals against the flush valve seat (the big hole at the bottom of the tank.) to either keep the water in the tank or let the water out of the tank. The seat may have a burr, crack or calcium deposits that allow a small amount of water to seep past the rubber flush valve. Sanding the seat to remove the burr or calcium deposit is a short-term solution, but rarely solves the problem for long. A permanent solution is to replace the

line and look for rough spots or kinks in the line. Because these small water lines often leak for a long time before they are discovered, your walls may very well be saturated. The swelling baseboards are an indication they are full of moisture. The repair for this leak goes far beyond repairing the pinhole leak in the icemaker line. You will have to remove the drywall in order to allow the walls to dry properly. Chances are

you will also have a major mold issue inside the walls. You should seek professional help for an evaluation of the potential mold issues involved. Please note when replacing icemaker or filter lines, only use tubing specified for that use. Ask for icemaker tubing, it will be marked icemaker compatible.

continued on page 20

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Rental Housing Journal On-Site · July 2016

Advertise in Rental Housing Journal On-Site Circulated to over 20,000 apartment owners, on-site and maintenance personnel monthly.

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Rental Housing Journal On-Site

SK THE SECRET SHOPPER Appropriate Appearance

veryone knows you only get one chance to make a first impression. What you communicate from the curb, carries over into the office environment and beyond. Paying attention to professional office attire is important year round, but especially during the warmer summer months. When the weather is hot and everyone is trying to keep cool and comfortable, some employees may be presenting more than just their apartments! This can be a distraction to co-workers and residents, and disrupt the sales process. Here is a topic of concern based on the question below: Q: The staffs at some of our communities tend to “dress down,” especially at our smaller buildings where they have responsibilities in and outside the office. I have noticed this sometimes carries over into their personal grooming as they transition from working outside and then come back into the office to assist clients. However, during the warmer summer months when many of my managers have even more responsibilities outside, I have noticed an increase in inappropriate/

unprofessional attire and a decrease in attention to personal grooming. I am concerned about the impression my managers are making on our residents, as well as prospective renters. Other than instituting a “uniform and personal grooming policy” or mandating a strict dress code, what can we do? These are some very valid concerns, and this issue needs to be addressed. However, it’s an extremely sensitive subject because how people dress and present themselves is very personal. Also, there is the financial aspect, as not everyone can afford to make a high end fashion statement! When you throw “gender” into the mix, this issue becomes even more complex, as it’s tough for a male supervisor to approach a female employee on this issue and vice versa. Typically when a confrontation does occur, someone is embarrassed, offended or both. Then you end up right back where you started and nothing is resolved. For those companies who have been able to implement a “uniform” policy and standard of dress: Congratulations! You do not have any of the above

headaches any more. Probably the only issue you have to deal with now on this subject is getting your employees to actually WEAR their uniforms! For everyone else, the answer is “education.” If you have a written “dress code,” regarding attire and personal

grooming for all employees, no matter what community they work at, then everyone will know what the expectations are. When a new employee is hired, they can be given this information up front continued on page 23

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Rental Housing Journal On-Site

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Rental Housing Journal On-Site

Single Best Way ...continued from page 1 can outperform the other managers in terms of leases and lowering occupancy rates and show leadership your abilities are scalable, get ready for an amazing career, you are now in line to be CEO. So let’s breakdown what it means to get leases, increase revenue and scale. Let me start by telling you what it is not.

You will not be promoted if you bring in leases by: • Giving away the farm: Out of this world promotions that bring in unprofitable leases may improve your occupancy rates short term but it’s a sure fire way to get yourself locked into the role of assistant property manager for life. Giving stuff away tells your leadership that you care and can think outside the box but you are also telling them that you better be monitored by someone with experience or you will bankrupt the company. Not a good label to have associated with you. • One-one-selling: So you are the best at closing prospective renters? Awesome. You can show a unit, explain the benefits of living at the property and close the deal. These are all good skills to have. But, if this is what you become famous for, you have now made yourself a leasing agent for life. At best, you can hope for a “new title” and the added responsibilities of a “trainer” with little or no extra pay. Sales rock-star, get used to now doing your job and teaching the slackers how to do theirs with all hope for promotion quickly fading. Why would they take you away from the leasing office when talking to prospects is where you add value? • Being a shopaholic: You know the type, you may be the type, its ok. The first step is admitting you are a shopaholic. You have banners, you have balloons, you bake cookies and whenever a ILS rep comes into the office you buy whatever they are selling. If you want to be promoted, you need to show leadership you have the ability to make tough decisions. Saying “yes” to everything is not making decisions its going on a shopping spree with the company’s money.

that you are terrific at talking to renters, are you going to be promoted? No. Now imagine that same conversation but instead, you say; “I researched my community and discovered that we were over spending and underperforming because we were constantly playing catch-up due to the fact that prospects were not finding the property when they looked first. We were battling to win the war of “lookie-loos” who required the best deal to sign a lease. How I fixed this problem is, 1. I evaluated our online presence, 2. I isolated the issue and fixed it by 3. ranking the property for the top searched keywords organically as well as running a Google AdWords campaign simultaneously. This placed the property first in front of prospects allowing me to close all of the potential renters that signed a lease on the first visit, leaving our competing properties to waste resources fighting over the tire kickers.” If you are able to say this, welcome to the big leagues, you are on the path to CEO. • Show leadership you can make tough decisions rather than spend your way out of problems. If you get to 100% occupancy but you have shown leadership a laundry list of expenses needed to get there, you are not ready to lead. Real leaders make calculated decisions. Imagine this conversation with the VP of Operations, “my strategy to improving the properties numbers was twofold. First, I wanted to increase occupancy, but second I wanted to reduce waste and overspending. Both numbers have an equal effect on the bottom line. I found success by boosting the properties visibility with the best renters and reducing unneeded or redundant expenses. For example, I used Google AdWords, a compressive $499 a month SEO plan and our top performing ILS. I systematically cut out all other unnecessary tenant acquisition expenses”. You just earned yourself a promotion! Matt Easton is EVP of MultiFamily Traffic, the only apartment SEO and AdWords management company that measures themselves by how many leases you sign.

You will be promoted if you bring Millions of online apartment searches are perin leases by: formed each day, resulting in new leases being • Getting the community in front signed. Is your website being found by renters? of qualified renters looking to The fact is the first 20 results on search engines like Google receive about 97% of all clicksign a lease without having to use through traffic. promotion after promotion. The MultiFamily Traffic’s job is to make your propbest way to do this is to make erty website one of these top results. By leversure your property is on the first aging years of expertise in both apartment few pages in Google for as many marketing and apartment portfolio ownership of the top searched terms that they will help your property GET FOUND online renters in the area are typing in. and your VACANT UNITS LEASED. Additionally, by using Google MultiFamily Traffic is headquartered in Denver, AdWords campaigns. The bottom Colorado. They have been in operation since line here is, if you are the first 2003 and have helped thousands communiproperty a prospect finds, you ties see great success in driving low cost leases to their properties. Most clients are so pleased don’t need promotions to try and with our service that they end up eliminating change their minds about other most other forms of lease-up services including properties they have visited. There expensive ILS subscriptions, saving the propare enough renters that sign a lease erty thousands per month in apartment adat the first property they visit for vertising fees. Matt can be reached directly at you to get to 100% occupancy 303-803-7372 without having to use promotions. You just need to be FIRST. • Show leadership you are a leader, not a seller. Imagine meeting with the CEO, and you tell him or her Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Five Proactive Ways to Gain Lease Renewals By John Wilhoit Jr., www.multifamilyinsights.net

orget about gimmicks; let’s stick with tried and true. There is a certain course of action that allows for continuity in customer contact on property and a high rate of lease renewals. For starters, if there is a leasing office on site, having posted hours is a small thing that brings big results because your residents (customers) know when the “store” is open. Does your asset have trained staff responding professionally? Is customer service at the forefront of company policy with an eye towards quality customer service? These are operational must-haves for increasing renewal rates. Following are five “touch points” that professional property management companies deploy to implement consistent customer contact and assist in making renewals part of ongoing operations. 1. From Day One. The most sophisticated property management companies are in continuous renewal mode. They begin the discussion about lease renewal in the welcome packet- basically, from day one of the initial lease.

2. A Call to Action. Every public event on property has a renewal component, from pool parties to BBQs to renewal “bonus” offers at

the leasing office door and by the coffee pot each morning. 3. Email (marketing) lives! Every property that can should have its

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Rental Housing Journal On-Site

Vacancy Rates Hit New Low ...continued from page 1 King has a vacancy rate of 3.85% and Snohomish County a 3.9% rate. The overall vacancy rate which includes properties in lease-up fell from 6.3% last quarter to 5.78%. The four submarkets with the lowest vacancy rates are all in the outlying areas and offer competitively priced rents. All are under 3% vacant. In the north they are Edmonds and the area north and east of Everett, and in the south, Tukwila and the Auburn area. These areas have had little new construction. The two submarkets with the highest vacancy rates have a high concentration of new construction and high rents. These are South Lake Union and Ballard, which are in the 5% to 5.5% range.

Incentives Rental incentives dropped $6 this quarter to $6 per month. In the two-county area 12% of the properties are offering incentives, same as last quarter. Absorption: +2,633 Overall, there were +2,633 units absorbed this quarter, up from +1,792 units in the first quarter. The Seattle Central South submarket absorbed over 300 units. Rents: $1,549 $1.78 per Square Foot Rents climbed $64 to $1,549 per month and $1.86 a square foot, an increase of 4.1% over the last quar-

ter. Over the past 12 months rents increased 10.1%. Downtown Seattle continues to be the most expensive submarket with rents at $2,344 per month and $2.92 per square foot. This is followed by downtown Bellevue at $2,183 and $2.48 per square foot. This quarter South Lake Union became the third submarket to break past the $2,000 barrier. Rents here average $2,037 per month and $2.70 per foot. Submarkets showing the greatest rent increases are Fremont/Wallingford, Redmond and Bothell. Rents jumped about 7% in these submarkets this quarter. Renters seeking the best values must go to north Snohomish County and south King County. Rents in the area north and east of Everett average $1,105 per month and $1.14 per foot. In the south there are SeaTac at $1,098/$1.40 and Des Moines at $1,127/$1.44.

New Construction There are currently 22,300 units under construction, up 700 units from last quarter. It’s 650 units less than a year ago. Fifty-seven percent of these are in the city of Seattle, 25% on the Eastside, 11% in South King, and 7% in Snohomish County. Featured in the photo, the 174-unit Mark on 8th opened this quarter. It is located in South Lake Union and is managed by Greystar. There are 11,029 units that have either been built or are under construction

for completion in 2016. We have preliminary information for the next two years. We are tracking 13,493 units that are scheduled for a 2017 completion. For 2018 the number is 5,422 units. The grand total for all of the units in various stages of the pipeline is 64,359. This is 3,600 units more than last quarter and 6,100 units more than a year ago.

Observations We are in awe about how robust this market is. One would expect that the massive amount of new units that have hit the market over the past few years would slow rents and cause the vacancy rate to go up. But this is not happening. Rents surged $64 per unit, a 4.1% increase over the previous quarter. The vacancy rate dropped over a third of a percentage point to 3.86%. This is the lowest rate since we began surveying this market in 2005. Annual nonfarm employment growth as of May in King County was an impressive 4.5%. Snohomish County was 1.9%, but it represents only about 20% of the total 50+ unit apartment inventory in the metro Seattle market. A recent economic forecast showed a hefty upward revision from a previous estimate for employment growth. It appears that we are in the process of bucking a national trend. A recent survey shows declining rent increases nationally for the September to May 2016 period. There are times when doing market research can be a bit tedious. Part of our

research is tracking sales. Most sales are bought and sold by legal entities known as LLCs, or Limited Liability Companies. Typically, a buyer of a property will incorporate the name or location of an apartment property in the LLC name. LLC names are very mundane. This quarter we came across a name that we have voted “The Most Creative LLC Name Since We’ve Been in Business.” It’s You Old Poop LLC. For decades Tom Cain has supported a variety of industry organizations and events with his data and expertise as a foremost expert in the apartment industry. 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. Apartment Insights also provides customized rent reports and market reports. www.apartmentinsightswa.com 206-632-2220

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Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Make Your Units Spacious

5 Steps You Can Start Today

...continued from page 7

...continued from page 8

you’ll never get them done, and your residents notice when you procrastinate upkeep tasks on the property like pressure washing, painting, restriping the parking lot and repainting curbs. visit from installers. Select products even qualify for a lifetime warranty. Now ranging all the way up to 48 in. x 48 in., large format tile is becoming more popular and looks great in multifamily units but requires a different type of mortar. Be sure to use a mortar specifically designed for large format tile.

Wood Wood flooring is now offering the same easy-to-install features as laminate and vinyl flooring, making it more affordable than it used to be. In the past, property managers had to hire someone to install wood flooring. Options such as engineered and click wood can be self-installed with the same benefits of long lasting, durable flooring at a lower cost.

Innovation and advancement are continuous trends in flooring, allowing more options for property managers to consider. By Mark Voykovic, Division Merchandise Manager, Flooring, The Home Depot As the Division Merchandise Manager, Mark is responsible for merchandising all hard-surface flooring products at The Home Depot. He has been with The Home Depot for 10 years, serving in various merchandising roles.

BUILDING STRONGER COMMUNITIES

4) While you’re doing number 3, don’t be all business about it When we get clipboard tunnel syndrome, it’s easy to focus on that task in front of us and ONLY on that task. The problem with this approach is that you miss the life happening around you while you’re making your lists, and it’s that life, that community, buzzing around you that helps you rent your apartments, not to mention keep your residents. Make sure that you’re asking residents while you’re out and about making your lists how their lives are going, and then, if they actually answer you, please listen. Converse with them, make them feel appreciated or just on equal footing with you, and they’re more likely to stick around, even through the less than pleasant (for them) rent hike we know we have to hand out this year.

5) Don’t hide the rental rates I wasn’t a fan as folks did this when the market was going badly, but I could see their reasoning behind it. But now?! Showing your rates and making that knowledge not only available, but visible to your resident base prepares them for the rental increase that’s coming. In fact, you could really look awesome here and by allowing them to see what the current market rent is, make sure that the renewal rate is a smidgen lower. The residents feel validated and appreciated, even though the rate is going up, and you’re not paying the cost of turning that unit, which, let’s face it, was going to cost you 2 to 3 thousand dollars. I think compared to that, a little off the top of their rental rate is a pretty small price to pay. None of this is rocket science, but I didn’t promise you rocket science. I promised 5 things you could do today. Now – Time is opportunity! Get out there and make the most of it!

IMPROVING HOUSING OPTIONS

Publisher Will Johnson – will@propubinc.com Designer/Editor Kristin Flores – kristin@propubinc.com

Advertising Sales Will Johnson – will@propubinc.com Terry Hokenson – terry@propubinc.com Larry Surratt – larry@propubinc.com

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

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Tips for Taking Better Photos ...continued from page 4

Board President - Brett Stevens Vice President - Becky Sanders Secretary – Laura McGuire Vice President of Suppliers Council - Rob Pendleton Immediate Past President - Kris Buker Executive Director - Jim Wiard

Treasurer - Sheri Druckman

Mid Year Association Update ...continued from page 9 forms program has increased substantially in the past few years. The NAA Click & Lease powered by Blue Moon Software is the national standard for web-based legal lease forms and is utilized by 500 apartment communities throughout the state. Call us for more information about this inexpensive electronic lease and addenda service.

National Recognition Our Executive Director, Jim Wiard, was recently honored with the NAA’s Association Executive of the Year Award at the NAA annual conference in San Francisco. Winning the NAA Excellence Award is a testament to the outstanding volunteer support from our Board, our many committee members and our membership at large. The 2nd half of the year will include many State legislative and Congressional races that we will be monitoring, continued efforts working with the Seattle Council, ongoing education classes and seminars, events and meetings designed to raise money for charitable causes, and continued strong membership growth.

We exist to serve. For more information about the Washington Multi-Family Housing Association, our educational opportunities, networking events or legislative efforts, or to sign up for membership, go to www.wmfha.org or call us at 425656-9077. Be sure to follow the activities of our members on our Facebook page. Call us before August 31st and receive 30% off membership dues to join the association and support the industry that supports us all.

iPhone 6s, HTC One M9, Samsung Galaxy S7, Google Nexus 6P and Motorola Moto X Pure Edition. Additionally, property owners and managers can download new camera apps to achieve great results, including Cocologics ProCamera (iOS), Open Camera (Android) and Lumia Camera (Windows). Another great piece of inexpensive equipment to look into is an aftermarket wide angle lens for your smartphone (about $100). Wide angle shots are essential for great property photos, as it widens the field of view, making rooms look bigger. Additionally, a tripod or shutter release will help to stabilize the camera to help avoid shaky and/ or crooked shots. Another great way to straighten your shot is to compare the vertical lines within the room (such as a doorway, window or corner) with the grid settings in your camera app.

Set up the Perfect Shot Truly great shots are usually taken in the middle of the day, when the sunlight is softer than it is at sunrise or sunset, when it streams directly through the windows, creating shadows and bright spots. Midday light is evenly distributed throughout the room, creating a warm, welcoming atmosphere. To get the most out of this light, turn off the flash, open the curtains, and keep the blinds pulled down. When setting up your shot, hold the camera about three or four feet from the floor, and try to shoot from the corners to get as much of the room in the frame as possible. Don’t forget to take exterior shots, too. It’s best to start these in the early afternoon, when the sun is high overhead. And, be sure to take at least one shot from each angle to provide context for the property within the neighborhood.

Editing and Uploading Making simple edits to property photos doesn’t require a professional editor. There are free apps for both iPhone and Android users, such as Snapseed and Adobe Lightroom, that offer the ability to adjust verticals, exposure, white balance and sharpness. With these tools, the editing process should only take around 30 to 60 seconds per photo Once the photos are ready to go, make sure to save your work so they can be easily accessed for marketing materials. Websites such as Google Drive and Dropbox can make this a seamless process, and you can share images easily with links you can send to colleagues and prospective buyers. While professional photographers are a nice-to-have, it’s not always a realistic luxury for property managers or landlords when they’re looking to quickly turn over a property. With these tips and tools that can be used at little to no cost, the images needed for marketing properties can be easily taken, edited and shared as needed. By Katrina Langer and Jeffrey O’Connor Katrina Langer is a content marketer at Buildium with more than five years of experience in writing and SEO, and has worked with a number of Fortune 500 companies to improve their website experience. Jeffrey O’Connor is a Stoneham, MA based commercial photographer specializing in high end residential real estate, product, and food photography. His portfolio includes work for small and large clients across New England and Canada, and as far away as Seattle, WA, and Sydney, Australia. He lives and works out of his home office and studio with his wife, Erin, and their dog, Laika.

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Rental Housing Journal On-Site · July 2016

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Rethink That Lease Renewal ...continued from page 3

multi-family investor have the ability to stop an owner occupier in their tracks before they ever even write an offer. You might need to hire a landscaper, or spend a few dollars on paint to make sure you give the right first impression.

ment of their home. Plus, what do most tenants do when the find out the property they rent is for sale? They immediately start looking for a new place to live! Tenants know there is usually a rent increase that comes with new ownership.

2. Does your property have deferred maintenance that needs to be addressed? Items such as peeling paint, damaged exterior, missing smoke alarms or co2 detectors may prevent a FHA or VA loan from funding until they are fixed. Make sure you are asking your broker what you need to do to get the property in condition to qualify for a government backed loan.

It is a great time to be a small plex property owner. If your plan is to hold your properties, rents are on the up and cash flows are looking better. If you are planning on selling your property take advantage of these prime market conditions. It is not every day that residential buyers cross over into the multifamily market.

3. Don’t let your broker put up For Sale signs in the yard or show your units without an accepted offer. The last thing you want to do is parade a large number of looky loos through the property disturbing your tenant’s peaceful enjoy-

By Chris Salaz Chris Salaz is Small Plex Broker at SMI Commercial Real Estate, LLC . Please contact Chris if you would be interested in receiving SMI’s free bi-annual newsletter which includes the most comprehensive rent and vacancy survey in the mid-valley, the SMI Apartment Update. 503.390.6060 Chris@smicre.com

Rental Housing Journal On-Site · July 2016

5 Proactive Ways to Gain Lease ...continued from page 15

and notify about all things on property that residents need to know…including renewal specials and offers. 4. Reaching out by phone. The closer the lease end date the more reason to sound the bell of urgency, particularly in hot markets where rents are rising and you have a waiting list. 5. Electronic signatures. Some PM companies have verbiage in the originating lease that allows a resident to “electronically” sign a lease renewal that makes it a binding document. While electronic signatures for renewal might work well, (check with counsel before implementing), my preference is to have a renewal signing in the apartment home and use the event, per the terms of the lease, as an announced interior inspection. Better, of course, is having the inspection weeks prior to renewal to 1) prepare for turn-

over work if there is a move out and 2) allow the resident to address any issues that would place the renewal on hold. The inspection may give you cause to pause on the renewal for reasons from too many persons in residence (people living there but not on the lease), to all the other issues that denote lease violations that require a remedy prior to the renewal being signed. 6. Gifts and concessions. For a starter list on concession ideas read 21 Low Cost Renewal Concessions. 7. Things not to do. Also, read the article Five Resident Loyalty Shredders for another perspective on renewals. This article is intended to be informational only and does not provide legal, financial or accounting advice. See http://multifamilyinsight.com. Multifamily Insight. See video at John Wilhoit.com.

Rental Housing Journal On-Site

Dear Maintenance Men ...continued from page 11

flush valve. Start by turning off the water supply, completely empty the tank and remove the water line. Remove the two or three bolts holding the tank to the toilet bowl. Turn the tank upside down and remove the large nylon or brass nut that holds the flush valve to the tank. Install the new flush valve. Be sure the tank bottom is clean and no debris gets between the new valve’s rubber gasket and the tank. Tighten the large nut on the outside of the tank and you are ready to reassemble the tank and bowl and put the toilet back into action. When reassembling the tank to the bowl, install new rubber washers and bolts.

Dear Maintenance Men: Can I get some pointers with preventive maintenance when it comes to heating and air conditioning? Mike Dear Mike: Heating and air condition or HVAC should be inspected at least twice a year or at the change of the major seasons such as summer and winter. Prior to summer or winter seasons, it is essential to properly inspect and troubleshoot your HVAC (a/c)units whether they are window, wall or central. Most A/C units fail or work improperly due to nonexistent or improper maintenance and not age. Cleaning is your A/C is the most inexpensive and critical maintenance procedure you can perform.

Here is our 4-point check list: 1. Turn on the A/C and listen for unusual noises. 2. Inspect/clean or replace filters. Filters should be cleaned or replaced at the beginning of each major season, such as before summer and before winter. 3. Clean & repair damaged or bent fins. (They can constrict proper air flow and decrease the cooling capacity of the A/C unit. 4. Clean out all dust and debris inside of the A/C pan or coils. On a central HVAC unit: cleaning or replacing the main and return filters, may be the limit on a DIY cleaning. A qualified technician should do any other work on a central heating and air unit. Bio: Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation Company www.BuffaloMaintenance.com www.ContactJLE.com www.Facebook.com/BuffaloMaintenance

Death in a Unit ...continued from page 5 in a recent article that, “A decomposed body is one of the worst health hazards, time and temperature influence decomposition, and the fatty tissue in a human body is like kerosene in that it won’t evaporate like gasoline will. It’s a greasy substance and it absorbs into the carpet and the floor. If someone dies in bed, the fluids can seep through the mattress, the box spring, the carpet, the floor—and sometimes you even have to pull up the sub-floor; the hepatitis B or C virus can live outside the body for seven days.” His and other death cleaning companies have chemicals that kill that hepatitis, MRSA, and staph. Check on the property or tenant’s insurance policies if the coverage includes this service. Any cleaning efforts may be hampered by the presence of the tenant’s personal affects, and the process of relinquishing this property must follow specific instructions established by law. It is a good idea to check with an attorney to be sure that you follow the process correctly.

Public notice Abandoned property rules require the posting of an abandonment notice. In Oregon, the abandonment rights and responsibilities apply to an heir or devisee; any personal representative named in a will or appointed by a court; and any person designated in writing by the tenant to be contacted by the landlord in the event of the tenant’s death. The abandonment notice must be mailed to ALL of the following three parties: the deceased resident, at the rental address; any heir, devisee, personal representative or designated person known by the landlord, and the “Estate Administrator of the Department of State Lands” You must allow the heir, devisee, personal representative and estate admin-

istrator the opportunity to remove the personal property if they contact you within 8 days of mailing the notice and provide reasonable evidence that they are in fact the heir, devisee, or personal representative or estate administrator. With the help of the police, establish a list of individuals authorized to enter the unit. Request the ID of anyone who arrives to remove the personal items to verify their identity. If they need a few extra days, that’s fine, but establish a date in which the unit will be back to re-rent. If the next of kin want to continue to control the unit, rent will need to be paid. Also, if the tenant left unpaid rent, notify the estate of this and when the next rent payment will be due. If property is unclaimed it should be auctioned and the proceeds sent to Department of State Lands Unclaimed Property. If a balance is less than $5,000 that amount can be counted toward tax losses. If the balance owed is over $5,000 you may wish to pursue the estate. Some circumstances require a public response. In the case of a violent death, consult the police on the proper procedure to inform residents. Make the response timely to calm fears, within 48 hours. You may also want to organize a neighborhood watch or ask the police to drive through more often for the weeks after the incident. In higher crime areas, it may be a good investment to hire a security company to increase the visible security on the property. In cases where a long term and/or much loved tenant has passed you may want to express your condolences to the surviving family by sending a sympathy card and allow fellow tenants to pay their respects by staging a community get-together honoring the life of the tenant.

Summary A death in a unit is typically an unplanned event, often a traumatic one in cases of a suicide or a murder. This creates an environment of uncertainty for the on-site manager, the neighboring tenants and the property owner. Communication is important; so is humanity. Though the unit may remain vacant longer than anyone would like, showing compassion to family members who may not have anticipated the travel or storage of the deceased’s property, not to mention the loss of their loved one, is more important that a timely turn.

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Seattle Ranks 3rd

...continued from page 1

adults are opting for home purchases right now is helping the occupancy performance. Economic growth is bringing new renters in through the front door. At the same time, the number of existing residents exiting out the back for other housing options is limited.”

Rent Growth Remains Robust Typical rents for new residents climbed another 1.8 percent during the second quarter, taking the price increase seen over the past 12 months to 4.6 percent. Monthly rents for new resident leases now average at $1,282. Influenced by the increased volume of new supply that apartment owners and operators have in the initial leasing stage, average annual rent growth has slowed modestly from this economic cycle’s peak growth of 5.6 percent, seen in the third quarter of 2015. However, today’s annual rent growth pace is still very substantial compared to the long-term historical norm that runs just under 3 percent. “Annual rent growth in the range of 4 to 5 percent is an unprecedented result six years into a growth cycle,” Willett said in the release. Annual rent change has been positive for 24 consecutive quarters, with the average price increase during that period registering at 3.8 percent. For comparison, the mid-2000s growth cycle lasted for 19 quarters, and annual rent growth averaged 2.8 percent in that span. Among individual large metros, Sacramento is now the country’s rent growth leader for the first time ever. Pricing for new-resident leases in Sacramento climbed 9.7 percent during the past year. The following list shows current top performing metros for annual rent growth.

Peak Deliveries Lie Just Ahead A recent slowdown in the number of multifamily housing units authorized by building permits suggests that the apartment construction volume should soon cool slightly. For now, however, ongoing building remains in line with the very high levels posted over the past year or two. Properties totaling 534,743 units are under construction in the nation’s 100 largest metros. “With so much additional product finishing very quickly, the apartment leasing environment could become more competitive in the short-term,” according to Willett. “A large block of new supply is scheduled to finish, just as demand registers its routine seasonal slowdown in the winter months. However, barring a pronounced stumble in economic growth, there’s nothing suggesting future stock is going to cause big-picture problems.” For further information on MPF Research, visit https://www.realpage.com/mpf-research

Leaders in Annual Rent Growth for New Residents Year Ending in the Second Quarter 2016 Rank Metro Rent Growth Sacramento, CA Portland, OR Seattle-Tacoma, WA Phoenix, AZ Nashville, TN Oakland, CA Fort Worth, TX

9.7% 8.8% 8.2% 7.6% 7.2% 7.2% 6.8%

Los Angeles, CA Riverside-San Bernardino, CA Fort Lauderdale, FL Las Vegas, NV San Diego, CA West Palm Beach, FL Atlanta, GA

6.7% 6.7% 6.6% 6.4% 6.3% 6.2% 6.0%

Select Metros Losing Steam While annual rent growth remains near this cycle’s peak levels in most metros, pricing power is cooling meaningfully in a handful of spots. After San Francisco, Oakland and San Jose metros, experienced huge rent growth for several years, the size of price increases is coming back to levels that appear more realistically sustainable now that the region’s building activity has climbed to record volumes. Similarly, a substantial amount of new product additions have slowed Denver-Boulder’s annual rent growth pace, after record price increases occurred earlier in this economic cycle. Importantly, the Bay Area metros and Denver-Boulder are posting strong apartment demand. Increased deliveries haven’t resulted in vacancy issues. Thus, while rent growth has slowed from the very robust levels achieved recently, price increases are still strong relative to the long-term norm. In contrast, Houston’s current pricing is weak, not just a slowdown from previous results. Rent growth is close to disappearing due to slowing economic growth occurring alongside aggressive apartment construction. In fact, actual price cuts have emerged in several of the neighborhoods adding the most supply. Markets Losing Rent Growth Momentum Second Quarter 2016 Vs Second Quarter 2015 Annual Rent Growth Metro Q2 2016 Growth Q2 2015 Growth Momentum Change

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Rental Housing Journal On-Site · July 2016

Rental Housing Journal On-Site

Ask the Secret Shopper

...continued from page 12

as part of their new hire package. That way, they will understand how they are expected to present themselves. For existing employees who are not in compliance because there was no written dress code at the time they were hired, you can institute a “new company policy” and create a standard for all employees to follow. Of course you must remember a very important principle: Everything in life has a “trickle down” effect. Your efforts to get your employees to comply with a dress code will only work to the degree in which you comply with the same standard yourself. A leasing consultant does not have much motivation to dress up a notch if the assistant or resident manager is “dressing down.” On the other hand, an on site manager will not be inspired to comply with a dress code if the property supervisor or owner visits wearing casual clothing. When employees working together dress inconsistently, this sends a mixed message to the residents and prospects that visit their office. Until people really get to know you, all they have to go on is “appearances.” The employees who

are dressed in business attire will “appear” to be professional, organized and prepared to serve their clients. Those dressed otherwise will not. As in every area of life, perception is reality. While you can’t judge a book by its cover, the next person who walks through your door could make a rental decision based upon what’s covering (or not covering) you! Having a standard of dress for all employees, no matter what community they work at, will consistently communicate a sense of pride and professionalism. If you are interested in leasing training or have a question or concern you would like to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employee evaluation needs: www.jancyn.com ASK THE SECRET SHOPPER Provided by: Joyce (Kirby) Bica Former owner of Shoptalk Service Evaluations Consultant to Jancyn Evaluation Shops E-mail: shptalk2@gmail.com Copyright © Joyce (Kirby) Bica

Five Lease Renewal Points Contract ...continued from page 6

address. Even though people are too busy to pick up their phone, answer a voice mail or text, they still look at their mail. Post card mailings may costs .50 cents to $1 each. The return on investment is very straight forward as you can correlate the increase in renewals with a certain percentage attributed to direct mail. Post card mailings may seem generic as there isn’t any personal information on the post card other than the name and mailing address of the recipient. Yet the message is very personal in that it invites the resident to stop by the office for a beverage and sign their lease renewal. Like with concessions, you will have to test various messages to see which one obtains the best response rate. These methods, when applied collectively, are like making sure you are well

prepared for cold weather; you start out with a sweater and hat, but just to be safe, you pack an umbrella, gloves and a scarf in case the weather turns harsh (such as if new competition comes in). Sure, it could be good weather with renewals just jumping into your office, but you can’t assume this to be true. Best to be prepared for all-weather events. Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. This article is intended to be informational only and does not provide legal, financial or accounting advice. See http://multifamilyinsight.com. Multifamily Insight.

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