RHJ's Multifamily Magazine July - August 2016

MULTIFAMILY Vol 1 Issue 2

July - August 2016

MAGAZINE

What's inside: 4 Things To Check Before You Raise Rents Apartment Communities Will Soon Be Able to Buy Their Way into The Google Local Pack with AdWords 4 Reasons You May Have Hardto-Lease Apartments With Hidden Vacancy Costs How Well Do You Know Your Residents?

SecureManage ®

No Cost Per Unit.

No Cost Per User.

No Cost Period.

Stop paying for success!

All NTN subscribers have full access to the many features of NTN SecureManage® at NO COST. No hidden fees, just the same exceptional service National Tenant Network has provided property managers for 35 years.

To schedule a Demo, or to become a subscriber, contact NTN today!

800.228.0989 ntnonline.com

®

Rental Housing Journal − Multifamily Magazine

1

Table of Contents O

Welcome to RHJ Multifamily magazine.

ver the last year Rental Housing Journal has seen an enormous amount of growth in reach. We have expanded beyond our regional journals for property managers and apartment owners with our publishing partnership with National Real Estate Investors Association and the launch of the quarterly national publication, Real Estate Journal, and annual Real Estate: Opportunities in Investing (ROI) publications. Additionally, we’ve added featured departments online: RHJinvestor.com and RHJblog.com.

RHJ Multifamily is a bi-monthly digital publication specifically for apartment owners and property managers nationwide.

The editorial content will include market trends, best practices, legal commentary and other pertinent information from many of the most successful and knowledgeable sources in the multifamily industry.

Thank you for reading and, again welcome to RHJ Multifamily magazine.

Will Johnson Publisher

Featured Articles 2. 4 Things to Check Before You Raise Rents 6. Is Airbnb Good, Or is it Bad, For the Rental Market?

12. Apartment Communities Will be Able to Buy Their Way Into the Google Local Pack with Adwords

15. Look to Student Housing for Best Practices in Efficiency 17. 4 Reasons You May Have Hard-to-Lease Apartments With Hidden Vacancy Costs

20. How Well Do You Know Your Residents?

Subscribe to RHJ's e-newsletter!

2

Rental Housing Journal − Multifamily Magazine

4 Things To Check Before You Raise Rents Rents have been increasing and it is a great time to be a landlord. In fact, landlords have been enjoying some of the fastest growth in rental rates in recent history. But you need to be aware there is a cap to that growth.

By Larry Arth

R

ental demand continues to Rising rents are a trend, but how remain very strong, which high will they go? allows landlords to be bullish Everything I read and study on rental rates.

The questions investors are now asking about rents are: ∙∙ “How high can they go?” ∙∙ “For how long can we raise the rates?”

Great questions, and one needs to look deeper at the market in which you are investing to find the answers.

suggests rents will rise through 2016 but at a slower pace than in the past. While rental demand continues to be very strong, there are larger numbers of new apartment buildings being built to address the needs for more rentals.

This can change the balance of rental supply and demand.

While it most likely will take the remainder of this year to get these rental units built, the rental demand will remain in favor of the landlord through year’s end.

The national vacancy rate closed out 2015 at 4.2%, which is a low national number, but rose to 4.5% in the first quarter of 2016 according to REIS. Nationally rents are slowing with the average increase 4.1% in the first quarter of 2016 to $1,248 per month, compared to a 5% increase

Rental Housing Journal − Multifamily Magazine

3

4 Things To Check Before You Raise Rents

in the first quarter of 2015, according to Axiometrics. You want to consider what is going on in your local com. And demand for new apartments has been rental market in order to know whether you can raise declining according to MPF Research. rents and what your rental future will look like.

“The past few years everything you touched was gold 1. Affordability of the market in the apartment industry, and that’s not going to be the case” this year, said Jay Parsons, vice president for One of the first things you want to determine is your local affordability for housing. This can be obtained MPF Research, told the Wall Street Journal. from a local property management company or a Realtor; you can also find information on sites like However remember local markets HUD’s local housing portal to determine fair market vary rents for a particular area.

I always enjoy looking at national numbers, as I believe they are helpful to determine an average or a Rents can only rise until affordability peaks and a great way to determine this is to establish the area’s benchmark against which to compare. median income.

I do, however, always say there is no such thing as a national real estate market, as each market is local Affordability based on national averages is when a in nature and different in size, economic strength, monthly rent payment is around one-third of what the average person’s monthly gross income would be. percentage of renters to homeowners, etc.

Once it gets beyond this point it may be getting to As a landlord doing your diligence you will always high. This is when apartment owners, managers and want to be aware that your research into this investors may experience vacancies and/or late rents information is local in nature rather than based on suggesting that affordability has peaked. If you are national statistics. Too often I see this information evaluating property where you need high rents you being misinterpreted because of this. Diligence, of may want to look deeper as sustainability of cash flow course, means nothing unless it is providing you may be threatened. accurate information.

4 things to go know before raising rents

2. Know what your competitors are charging (your tenants know)

An interesting thing happens when the landlord market is hot.

Landlord raise rents every time a unit becomes available.

How easily we slip into complacency, we think this rise will continue forever.

Before you know it, the market takes a swing and suddenly it becomes harder to rent and as a landlord you wonder why.

Quarterly growth in rents from Axiometrics.com

4

Rental Housing Journal − Multifamily Magazine

4 Things to Check Before Your Raise Rents

Do what you know your tenants are doing, they shop the competition so you will should to.

Here is a great tool to do just that, rentometer.com which will tell you what other homes have recently rented for in your area.

If you do not already know what So to that tune, remember: pigs get your investment market ratios are, fat, and hogs may get slaughtered. this information and chart from the National Multifamily Housing Visit Larry's Website here.

Council is a resource.

Pigs get fat, hogs get slaughtered

Also, this cool tool is a great asset when buying property to make I always share this sentiment with sure your anticipated rents are in owners, managers and investors line with the market. who are looking to raise rents.

3. Housing availability While bigger cities tend to be building more houses and apartment complexes to help fulfill the needs of renters, this is not the case everywhere.

I am a firm believer in maximizing profits. I like to raise rents each year even if it is just a few dollars because, quite simply, I like to set the boundaries up front for the tenant to expect a rental increase at each anniversary date. This way they are not surprised or upset when it happens.

Most local newspapers display building permit activity; I always suggest you watch this for insights. First and foremost, I look at what changes may have happened to my Talking to Realtors can also expenses and of course adjust rents provide information. accordingly. When the market will bear more, I believe each owner, 4. Renter-to-population manager or investor must decide what is best from a big-picture ratio It goes without saying that markets standpoint. with a higher ratio of renters is a better safe haven for apartment owners, managers and investors, as they have a larger pool of tenants from which to choose.

A larger increase to monthly rent may be warranted as long as it does not inspire tenants to start to compare their current rents with the prospect of moving on.

This also puts the leverage in favor We all know how costly tenant of the landlord. turnover can be and this will Knowing your investment market’s quickly consume the increased renter ratio is important for all rents that you may have obtained. owners and investors to know.

About the Author:

Larry Arth is the founder and CEO of Equity Builders Group, a Florida based Real Estate investment Group. As a 36 year veteran to real estate investing, Larry understands that we are now in a global economy and as times have changed, investment strategies must change as well. Larry is an international recognized consultant and speaker and assists hundreds of investors per year, both foreign and domestic to realize their investment potential. He analyzes locations across the country for economic strength and the locations that yield the largest most sustainable return on investment.

Within these locations he seeks out and gathers the best teams to deliver sound, high performing and most importantly sustainable turnkey investment. He works with investors to ride the wave of each areaspecific market surge. Larry’s primary focus is offering (Non Listed) safe and sustainable turnkey investments to the passive investor.

Resources: Apartment market shows signs of losing steam Apartment vacancy rose 4.5% in first quarter of 2016 National increases in rental rates down in first quarter 2016 Demand for apartments is slowing U.S. Housing and Urban Development local housing portal Find local prices www.rentometer.com National statistics

Multifamily

in

your Housing

area

at

Council

NATIONAL REIAU IS HERE TEST DRIVE IT NOW! Enroll In Online Classes And Start On Your Path To Real Estate Education With National REIAU Today Visit Us Today at www.NationalREIAU.com

ABOUT US Imagine real estate investing training that is fast, easy and convenient! National REIAU delivers great low cost, high quality investor training on exactly the subject you want, exactly when you want it. It is all available right here, right now with www.NationalREIAU.com.

We provide comprehensive course material through videos and provide the professional education that will set you apart from your competitors. Our ever-expanding selection of courses is timely, accessible and cost effective. REIAU will be the leading online resource for real estate investors, both beginners and advanced. The National REIA University is the most comprehensive educational program available for real estate investors.

OUR GOAL National REIA’s goal is to put you in control of your education and training so you can learn more and earn more – on your schedule! From the “Quick Tips” clips, to on-demand videos to regularly scheduled webinars, National REIA brings you the information you need to manage your real estate investing business more effectively. We help you boost your bottom line, while reducing your stress and worry.

Visit Us Today and Start on Your Path to Real Estate Education At www.NationalREIAU.com

USER EXPERIENCE “Fingertip Technology” – education brought to you on your desktop, laptop, tablet or phone Cost Efficient Learning – education without travel costs or scheduling issues Accessible – 24 hours a day, 7 days a week Convenient – flexible and easy to use Engaging – education brought to you by highly qualified instructors with easy to follow presentations Personalized – work at your pace and in a location of your choice Real-time - information following best practices to keep you up to date.

7265 Kenwood Rd Ste 110 Cincinnati, OH, 45236

Toll Free: 888-762-7342 Email: info@nationalreiau.com

6

Rental Housing Journal − Multifamily Magazine

Is Airbnb Good, Or Is It Bad, For Rental Housing?

Summary: The Airbnb lawsuit against the city of San Francisco is again focusing the debate on what is good, or bad, for the rental housing industry and the impact on the lack of affordable housing in many large cities.

By Kristin Flores

A

irbnb has sued the City of San Francisco in federal court over the city’s new rules requiring registration of rentals and threats to fine the company for unregistered apartment rentals.

Numerous regulatory efforts against the company show that what appears to be an easy-to-do business model can become a disorganized mess when it meets real-world markets and existing rules and attempts to change them.

San Francisco has blamed the company for depleting the supply of rental housing. And the city is trying to Some accusations are strong: Airbnb, say some, is sucking up apartment units that otherwise would be restrict the company’s growth. available to renters. That claim is loud in San Francisco

Rental Housing Journal − Multifamily Magazine

7

Is Airbnb Good, Or Is It Bad, For Rental Housing?

and similar claims are heard in Santa Monica, Calif., Airbnb units is trivial and so whatever impact it has in Manhattan and some Brooklyn neighborhoods, a on apartment availability is minimal. few areas in Seattle and also a sliver of Boston and Ever since the creation of the company in 2008, it has adjacent Cambridge. rapidly become synonymous with travel, lodging and a resource for supplemental income.

Is that Airbnb host putting

vacationers up in what should be your prime rental housing?

The company quickly transformed from accommodating guests with air beds and homemade breakfasts to shared spaces in a variety of properties.

Some think such accusations are just distracting from These properties range in almost every shade living the main issue at hand: housing inventory shortages space; from houses, castles, yurts, boats, windmills, according to the University of Southern California private islands, to apartments.

Lusk Center for Real Estate.

“It’s a diversion," Richard Green, the Lusk Chair in Revenue and security issues for Real Estate at the University of Southern California apartment owners writes on the website. "Politicians are not dealing with What happens when people start renting larger what they should be dealing with to address housing apartments just so they can make some extra cash unavailability so they are singling out Airbnb.” His renting out that spare room on the internet? nuanced point is that in most markets the number of

Visit us Online, 24/7 to see even more ARPOLA benefits!

+ 5 ways to save on repairs, rent turns, and updates

Save More. Make More. Worry Less.

+ An ARPOLA and The Home Depot Partnership Program

+ Free state-specific leases and legal notices + Select the best tenant - there’s a better way + Get rent paid on time and worry free

www.ARPOLA.org/membership

JOIN

NOW

ONLY

+ Protect your valuable rental property the right way

35

$

/YEAR

8

Rental Housing Journal − Multifamily Magazine

Is Airbnb Good, Or Is It Bad, For Rental Housing?

“For the most part, landlords are newspaper. But as the number organizations don’t have a real pretty hesitant because of the of short-term rentals grow, position on this at this point — is security risk,” Greg Willett, vice apartment operators may have to it good or is it bad? president of Richardson-based apartment analyst MPF Research, told the Dallas Morning News.

“You are bringing people in to the property who have not been checked out and can’t be identified.”

The company does not have the capability to run a thorough credit or criminal background check on every traveler, according to their disclosures.

Willett told the newspaper that most standard apartment leases already bar tenants from subleasing their units. So far, most landlords haven’t tried to parse out whether an overnight visitor on your couch is a relative or a paying guest.

force the issue. Some homeowners associations for condominiums are already clamping down to keep their residents from running private hotels on the property.

“They realize that to some degree their residents are already doing it,” Willet told the newspaper.

Safety and conserving the sense “If they every once in a while rent of community is what apartment a room for a couple of days, you “The conversation is just getting communities work hard to achieve. don’t want to kick a great resident started in the apartment business,” out over that,” Willett told the Willett said. “The industry Airbnb does have a mandatory identification verification system that they have the hosts and travelers both go through before traveling or hosting. With that, they can ensure that no host or guest is anonymous.

The company is in the midst of producing a multifamily platform in San Francisco that provides a means of transparent communication between the apartment managers and the hosts.

It allows the property manager to view upcoming activity and a yearto-end summary.

Rental Housing Journal − Multifamily Magazine

9

Is Airbnb Good, Or Is It Bad, For Rental Housing?

This platform can also allow apartment managers. property managers to upload house rules that the manager and Rental contracts host can require the traveler to prohibiting subletting acknowledge as a part of a stay During the 2015 NMHC agreement.

OPTECH Conference & Exposition, the company'ss head of landlord At odds with the rental partnerships, Jaja Jackson, had made a clear point that subletting housing industry?

From the time that renters had is not homesharing. Homesharing begun advertising their rental units is the service that Airbnb claims through Airbnb, the company to provide. has been at odds with the rental “The key distinction can be made housing industry. by you and your legal team,” told While this new form of subletting the conference according to reports or homesharing has allowed on the website adding that leases are its users to gain a new source not necessarily permanently static of additional income and an documents. They can be amended alternative means of lodging, it to accommodate homesharing has opened up a whole new avenue activities and set parameters for of concerns for landlords and those activities.

“It’s only a lease violation if you say it is,” he said in the article.

In San Francisco, the city has enacted a law that limits any traveler to the maximum amount of a 90 days stay. Depending on your location, similar laws may be in effect that can assists in drawing the line between shortterm homesharing and potentially becoming a hotel.

The benefit to risk ratio Even though it may seem like the risk to benefit ratio seems uncomfortably uneven, the opportunity for property managers to earn supplemental income is absolutely there too.

10

Rental Housing Journal − Multifamily Magazine

Is Airbnb Good, Or Is It Bad, For Rental Housing?

Jackson had suggested that property managers work out a deal with their tenants. A percentage rate of 5%-15% was suggested to charge as a commission or privilege fee. This additional income can either supplement the property manager’s income or it can be forwarded to another avenue of upgrade interest.

wear and tear. Airbnb suggests exploit the natural synergy that implementing a security deposit could be simmering underneath for such potential costs. the surface.

While allowing tenants to host travelers may not be the most ideal situation for most property managers, it does allow a large potential for word-of-mouth advertising. The travelers get to experience the authentic “live For example, funding community like a local” experience, the parties, curb appeal upgrades, surrounding area the property is property upgrades, new furniture in, the amenities and community. for the lobby or new exercise equipment for a fitness center or Conclusion other added amenities may help.

It seems that time is still needed to But what if these travelers cause really see how everything will fall into place with the rental housing more harm? See some stories here. industry and Airbnb. Though The company provides and stands there are still plenty of questions, by their $1,000,000 host guarantee. Airbnb has been speaking with large However, they do make it clear property management companies of what is not covered, such as to work together and attempt to

Resources: A consumer guide to homesharing USC Lusk Center for Real Estate Is Airbnb worsening the housing crisis The Airbnb impact on the rental industry Impact of short-term rentals Does Airbnb push up rental rates?

CUSTOMIZED SOLUTIONS & SAVINGS FOR NREIA MEMBERS LET’S DO THIS™.

SAVE TIME & MONEY WITH THE HOME DEPOT We’re dedicated to helping your business.

MEMBERSHIP SAVINGS

PURCHASE TRACKING

REAL-TIME PRICING

LOW-COST DELIVERY OPTIONS

Join the FREE Pro Xtra Program to receive: • 2% semi-annual rebate* • Exclusive Pro-only savings including 20% off paints, stains, and primers** • Volume Pricing on large orders across the store • Dedicated national support team • Bulk pricing discounts on thousands of items • Flexible credit options with no annual fee • Exclusive appliance program with custom catalog for NREIA members

Sign up today at HomeDepot.com/ProLoyalty and enter agreement code NREIA or call 888-333-3551 *Accounts must be registered/enrolled through the website above to receive rebate credit. Registration instructions to follow. **Rebate payments follows outlined in enrollment guide. $1000 will be paid with The Home Depot Gift Cards. *** - gift cards are provided to participants by NREIA not Home Depot **Exclusions Apply. We reserve the right to limit quantities to the amount reasonable for our regular customers. In the event of an error, we will make every reasonable effort to accommodate our customers. Details on any product warranty available at store. See contract for guarantee details. ©2015 Homer TLC, Inc. All rights reserved.

12

Rental Housing Journal − Multifamily Magazine

Apartment Communities Will Soon Be Able to Buy Their Way into The Google Local Pack with AdWords If you manage an apartment community, there is no better way to drive renters to your property than getting it listed on the Google 3-pack and map – pictured below.

By Matt Easton

W

hile attending SMX Advanced Conference in Seattle, WA June 22-23, we had a chance to speak with product development at Google

and learned that apartment communities will soon be able to purchase AdWords in the Google Local 3-pack.

That means one of the three local results in the local pack will be an ad. Properties that aren’t currently using an apartment SEO professional to get on the

Rental Housing Journal − Multifamily Magazine

13

14 Points That Must Be In Your Apartment Building Leasing and Marketing Plan

map will have an even tougher time. Once Google takes back a spot to use it for an ad, that leaves only two spots left for non-paying apartment communities.

Apartment SEO professionals need to make sure their clients show up in the top two local results, instead of the top three. Or, they need to work with them on getting a great price on the available paid spot.

If you want to buy your way onto the map, working with a Certified AdWords Partner like MultiFamily Traffic is your best bet as the price can shoot up is you don’t know how to buy these ads. Also, the way the algorithm works there is no guarantee of being placed on the map. A certified partner can cut that price for you by up to 70% and help you get the best odds of getting on the map.

How to make it on the Google map

Ensure the business info listed on your website matches with the info listed in your Google My Business dashboard. Also make sure you list the properties office hours. Office hours are now more important than ever. If you do not work with a professional, for around $1000 plus a monthly fee you can purchase a tool like Yext that will help you manage your citations and listings.

You will also want to start tracking the clicks on your Local 3-Pack listing by tagging your website link in your Google My Business dashboard with UTM parameters so you can pull that data back into Google Analytics. Doing it yourself can be a bit confusing at first but tracking is critical as you may need to make tweaks and changes a few times a month to make sure you stay in the 3-pack and map.

Monitor your online reviews and work on ensuring they are positive.

If you are going to take a do-it- Review solicitation is more yourself approach below are a few important than ever before. Not tips for improving your odds of only are review stars prominent in making it onto the map: the main 3-Pack results, they are

now front and center in the new Google Maps results interface, making reviews an even more critical data point that prospective renters will use when deciding to contact you to set up a tour.

If you are not already getting help with paid search traffic from AdWords, find help or learn all you can about AdWords. Paid search is a huge opportunity that you’re probably missing out on. Google is devoting more and more of their search results real estate to their paid ads, and if you’re trying to maximize your visibility, you need to be there. Especially on mobile.

Matt Easton runs Multifamily Traffic in Denver which was founded by a group of property owners and operators.

Rental Housing Journal − Multifamily Magazine

15

Look to Student Housing for Best Practices in Efficiency

By Scott Matthews, Director, Strategic Accounts, The Home Depot

S

tudent housing property managers face a specific dilemma when it comes to turning units: most of the tenants move at the same time. This presents a number of challenges, including strains on resources, inventory, storage, delivery and the general stress of project management, all of which make for a difficult transition between moving dates.

Having seen some of the best managers in the business tackle this unique challenge with ease, we pulled together a few things that set them apart.

Minimize external partners

Outsourcing to multiple suppliers and service providers creates unnecessary time and hassle.

Finding one partner that can handle end-to-end project Because student housing property management frees you up to focus managers have to handle this on more important responsibilities process so quickly, their best – like growing your business. practices can be viewed as a model for how to turn units efficiently. For Stock Inventory suppliers and service providers, we can sometimes see the pain points As you start to proactively source clearly though from a perspective products in advance, look for a single source of in-stock inventory of outside looking in. for all the products required. Also,

consider your source’s geographic footprint. If the provider has a solid number of nearby locations, staff members don’t have to travel a long way for the random missing tools or emergency repairs that inevitably pop up throughout the year.

Fulfillment Options A good partner will offer a variety of fulfillment options, such as the ability to order a product online, on location or over the phone.

This allows you to keep business moving no matter where you are or what you need. Look into your options for delivery and pick up.

Benefits like specific delivery windows or the ability to place retail orders in advance and have them ready for pickup are not to be overlooked or undervalued.

16

Rental Housing Journal − Multifamily Magazine

Look to Student Housing for Best Practices in Efficiency

These can save significant time Ongoing Services and money when unforeseen but Building a trusted partnership inevitable issues arise. during a busy season will also help with any last minute or Custom Delivery quick needs that may pop up in Once the product is sourced, create the future. Again, a provider with a custom delivery schedule. Big an extensive footprint and local, ticket items like appliances might brick-and-mortar resources is need to be stored temporarily essential here. until it is time for installation.

Save the hassle of outsourcing that Turning units is one of the most storage to an additional vendor logistically challenging processes or facing the added expense of a property manager will face, but several different shipments before identifying a turnkey partner the items finally arrive. Look for a to streamline the process makes partner who can customize your things run more efficiently, frees delivery as part of a larger project up your time and gives you the management offering. reassurance of working with one person or team from start to finish.

It also grants you the time to focus on tenant satisfaction and other property responsibilities.

By Scott Matthews, Director, Strategic Accounts, The Home Depot

Rental Housing Journal − Multifamily Magazine

17

4 Reasons You May Have Hard-to-Lease Apartments With Hidden Vacancy Costs Vacancy costs can sometimes be hidden when you have hard-to-lease apartments.

Sometimes it may surprise you it can be a single unit over and over causing the issue.

By Lori Hammond

V

acancy loss is a key This sneaky indicator is the six vacant, even 20 listed as indicator when evaluating actual number of days vacant for vacant isn’t going to set off alarm an apartment. Without looking bells based on the size of an property performance. at days vacant list or report, it apartment community.

Vacancy loss and bad debt are two might go unnoticed that the same negative adjustments from the apartment has been vacant for an Then an actual list of the vacants is reviewed. The hidden vacancy extended period of time.

Gross Rent Potential. loss per apartment is discovered.

Attempts to maximize rental Given the size of a property, it's income include increasing rents, expected there will always be some The shock hits when it's realized that one single apartment has been reducing vacancy and concessions. vacant apartments. vacant for six months, or longer.

There is another factor that lurks Reviewing the number of vacant The summary report has reflects apartments, seeing four vacant, one, two or 20 vacant apartments inside vacancy loss.

18

Rental Housing Journal − Multifamily Magazine

4 Reasons You May Have Hard-to-Lease Apartments With Hidden Vacancy Costs

with actual number of days vacant since move out. No one (other than the onsite staff) realizes it's been the same apartment racking up more and more dollars in vacancy loss.

∙∙ It's the floor plan no one likes (except the other 75 apartment homes with the same floor plan). ∙∙ It's too close to the laundry room. ∙∙ It faces the parking lot. ∙∙ It's garden level.

Resolving the stale apartment When walking vacant apartments, syndrome often defaults to deeply start with the apartments that have discounted rents. been vacant the longest. Is it an accessible apartment? Is it located To prevent this slow financial in the building farthest from the drain from sneakily flowing into office? If an apartment has been the vacancy loss. The actual move vacant for 60 days plus, it's time out dates for all vacant apartment for a diagnosis. homes must be monitored.

Encouraging leasing the oldest vacant first can minimize the long What’s preventing term vacancy loss.

this home from being leased?

There could be a contributing factor, such as worn carpet.

Long-term vacany is expensive

Long term vacant apartments are But more times than not this costly. apartment is the “odd man out.”

Not only is the rent lost due to the vacancy, but tme is lost by the 4 reasons you may have inspection and re-inspection that has to occur over the time span hidden vacancy costs The leasing team has created their when the apartment is vacant.

and sparkle the apartment home.

Preventing maintenance from pirating parts from the long term vacant is another concern.

Included in the evaluation of vacancy loss experienced at a property is the need to identify the individual vacancy loss for each apartment. Leasing the oldest vacant first, can allow a property to limit the average days vacant.

While there are always new apartments becoming vacant, with the “oldest” apartments being featured it prevents the forgotten stale apartment from occurring.

About the author: Lori Hammond has had a colorful career with experiences in the conventional and affordable apartment home market place provide the material for Property Management Minutes. An opportunity to share back with an industry that I love. Contact Lori atlori@ propertymanagementminutes.com

own perception that the apartment Maintenance time and supplies is hard to lease and it gets staler by are used to repeatedly clean, spiff the day because:

Subscribe to RHJ's e-newsletter!

Want to build your business?

Start by building your education.

An online CE platform with easy and convenient options that fit your schedule. Enroll in your real estate continuing education courses today and save 20% with promo code RHJ20.

rhj.theceshop.com | 888.827.0777

20

Rental Housing Journal − Multifamily Magazine

How Well Do You Know Your Residents?

Even the best screening reports cannot tell you if your residents will pay on time.

By Ellen Calmas

H

ow well do you know your to be approved outright without conditional lease offers. As an conditions. This same 30 percent industry, however, we tend to gloss residents?

of your future residents will also Rental residents' applicants come be strapped for cash since living in all shapes and sizes. They’re paycheck-to-paycheck doesn’t young, old and ages in between. pay off.

On average, there are about 15 percent more women than men, while based on the location of a community, the ethnic mix and type of employment may vary.

By necessity they have to have a rent-to-income ratio that meets your minimum standard, yet regardless of what part of the country you’re in, one-out-ofthree prospects will likely have a credit score below the threshold

over the financial realities of many of today’s renters when we ask the 30 percent of cash strapped applicants to come up with an extra month’s rent to hedge against If you follow the latest news, you future payment risk. know that 50 percent of lower credit renters don’t have $400 in Let’s look to a few the event of an emergency, and that 75 percent of wage earners rental marketplace below $50,000, and even 67 realities and residents: percent of those earning as much While rent pricing is dominated as $50,000 to $100,000, would by lease optimization programs, have trouble finding $1,000 to security deposits are more of a cover an immediate need. reflection of corporate tolerance toward risk. In trying to find a That’s certainly well worth happy compromise that protects considering in setting terms for the community and makes it

Rental Housing Journal − Multifamily Magazine

21

How Well Do You Know Your Residents?

less expensive for applicants to afford a lease, many companies offer non-refundable surety products. The problem is that requiring less out-of-pocket to help applicants go to lease signing, gets residents in the door but does nothing to assure they pay their rent on time…and we’re back to the drawing board. ·Any property owner or manager with a 10 percent or greater unexpected move-out rate will tell you that asking more of those with less to give is just not working. The $60,000 question is why do communities keep the same high security deposit lease offers in place and expect a different outcome without introducing different ways to support rental applicants? Paying more upfront simply proves that your conditionally approved applicant can scrape together more upfront to qualify. Without proven interventions to make sure they can pay their rent on time, we can all but predict future problems.

What even the best of screening reports can’t tell you is if residents really intend to pay their rent on time.

For “second chance” renters - a group defined by their lower credit scores on top of another ding, property companies need better tools to assure payment performance. Rent from payroll has emerged as the answer since it requires applicants to set up split deposits for rent as a condition of lease signing. That

means every payday a portion of rent is sent to a designated rent budgeting account, which reduces the risk of serving this renter population.

What does the future hold?

What does the future hold for rental communities?

With rising rents and no foreseeable decline in demand, continued prosperity for years to come – especially when smart operators look to ways to hedge their bets in betting on conditional (a.k.a. second chance) renters.

By Ellen S. Calmas| Co-Founder, Executive Vice President Neighborhood Pay Services, LLC / NPS Rent Assurance Text

REALESTATE-ROI to 44222

to receive a free digital copy of Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

Rental Housing Journal − Multifamily Magazine

22

5 reasons to use rentegration 1. Access - Rentegration.com is a web

4. Management Database - Rentegra-

based, multi-user software offering cus- tion.com is an easy to use, database drivtomers 24/7 access to forms generation, en software. Most form fields are auto populated from the database. The modarchives, property management data- Tenant Color Standards for National Network Logo base, basic accounting, vendor ordering ules are all integrated and work together.

For example, a customer can use the rent• Logos are provided on the CD in all three forms: and other services. all black, reversed to white, or in PMS 280 Blue/PMS 7543 Gray spot or 4/color applications. roll function to identify all delinquencies, Please see below for specific use examples.

2. Rental and Lease Forms Unlimited apply fees, and create eviction forms with • No other colors are acceptable for use for the logo. use of •aNofull line of state specific rental a few clicks altering of the logo is allowed. If you have a special circumstance that simple requires something notof the mouse. and lease forms.

Rentegration.com provided on the CD,All please call NTN NaTioNaL HeadquarTerS 1.800.228.0989 for assistance.

Logoscreated should not be put a busy background. forms •are byover attorneys and/or 5. Value - Large property management companies that use Rentegration.com local rental housing associations. forWHITE only generation will save time BLACK (withforms 40% gray circle) 3. Simplified Accounting - Owners and money over other methods. Mid and managers can track income and ex- and small size property managers and pense for each unit, property and compa- independent rental owners can manage ny. Perfect for mid and small size property their entire business at a fraction of the managers and independent rental own- cost of other software and forms. ers, who neither have the need or budget for larger, more expensive software.

PMS 280/Gray PMS 7543 Exclusive Blue Industry Partner of:

Scan For Special Offer

uNaCCePTaBLe CoLor uSaGe

do NoT alter in any way

do NoT change the color

WA-RTG-20 Washington

CHECK-IN/CHECK

-OUT CONDITION

OR-RTG-20 Oregon

CHECK-IN/CHECK-OUT CONDITION

REPORT 48-HOU

BEDROOM 3

R NOTIC Walls E OF ENTRY TENANT(S): Windows OR-RTG-24 Oregon _______________ ______________________________ Stove/Racks _____________________ ADDRESS: ______________________________ Blinds/Drapes TENANT(S): ________ __________________UNIT: ______________ ________________ Refrigerator ________ ADDRESS: ________ ________________ Rods PET AGREEMENTCITY: ___________________________________ STATE: ________ ZIP: _______________ ________________ ____ DATE:___ ________________ CITY: ________ Ice Trays _____ __ ________ ________ Rating Floor Scale = (E)Excellent

TENANT INFORMATION

TENANT(S): ____________________________________________________ DATE:________ IN ADDRESS: ____________________________________________________ UNIT: _________ LIVING AREAS CITY: _________________________________________ STATE: __________ ZIP: _________ DESCRIPTION OF PET(S)

Walls

Windows

1) Type _______________ Breed _______________ Size ______ Age __ WeightBlinds/Drapes ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________

Rods

2) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________ Floor

(VG) Very Good

Out

KITCHEN Walls Stove/Racks Refrigerator Ice Trays Shelves/Drawer

(G)Good

In

(F)Fair

Out

________________

(P)Poor

_________ STATE:

In

BEDROOM 3

Carpet/Vinyl/Wood

Out

____ UNIT: ________ Shelves/Drawer _ __________ ZIP: _________ Disposal

48-HOUR NOTIC Light Fixtures E OF ENTRY Doors/Woodwork

on

www.rentegration.com

3) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Carpet/Vinyl/Wood Vaccinations: Yes____ No____ License Number: ______________ Additional Security Deposit Required:$

Light Fixtures

AGREEMENT

Doors/Woodwork

Locks Tenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives ten Ceilings ant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions: Electrical Outlets

1) The pet(s) shall be on a leash or otherwise under tenant’sGarbage control Cans when it is outside the tenant’s dwelling unit.

TV Antenna/Cable 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly.

3) Tenant(s) are responsible for the conduct of their pet(s) Fireplace at all times.

4) Tenant(s) are liable for all damages caused by their pet(s).

5) Tenant(s) shall pay the additional security deposit listedCleanliness above and/or their rental agreement as a condition to keeping the pet(s) listed above.

6) Tenant(s) shall not allow their pets to cause any sort of disturbance or injury to the BEDROOM other tenants, guests, landlord or any other persons lawfully on the premises.

1 7) Tenant(s) shall immediately report to landlord any typeWalls of damage or injury caused by their pet.

Windows 8) This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement Blinds/Drapes shall constitute a material breach of the rental agreement. _____________________________ Landlord

Rods

______________________________ Floor Tenant ______________________________ Light Fixtures Tenant Doors/Woodwork

Locks ©2011 NO PORTION of this form may be reproduced without written permission.

Ceilings

Disposal

Dishwasher

Counter Tops

Cabinets

Sink

Floor

Ceilings

BEDROOM 1

Electric Outlets

Walls

Landlord

Windows

Phone

Windows

Blinds/Drapes

BATH ROOM Towel Bars

Blinds/Drapes Rods Floor Light Fixtures Doors/Woodwork Locks Ceilings

Toilet Tub/Shower Fan (Exhaust) Floor Electric Outlets Light Fixtures

Essential Services Plumbing Heating Electricity

Blinds/Drapes

Method of Service:

Personal Service:

Rods

Post and Mail:

Floor

* Add one additiona

Sink & Vanity

BEDROOM 2 Walls Windows

Dishwasher

l day for complian

Light Fixtures ce if served by post Doors/Woodwork Locks Ceilings Electrical Outlets Smoke Detectors

*

BEDROOM 2 Walls Windows Blinds/Drapes Rods Floor

and mail.

Walls Windows Blinds/Drapes Rods Floor Light Fixtures

Pursuant to RCW 59.18.150, this is your Counter Tops 48 hour entering the dwelling notice that your landlord Locks unit and premises or their agents will located at (Address) ________________ Cabinets be ________________ Ceilings ________ ________________ Sink ________________ Electrical Outlets ______ between the hours Floor Rods of Garbage Cans (Date) and .

Windows (Time) Floor TV Antenna/Cab le (Time) The entry will occur Blinds/Drapes for the following purpose:Fireplace Light Fixtures ________________ ________________ Cleanliness Doors/Woodwork________ ________ ________________ ________________ ________________ ________________ ______ ________________ Locks ________________ ______ Walls

Windows

Blinds/Drapes

REPORT

TENANT(S): ________ ________________ ________________ ADDRESS: ________ ________________ ________________ __________ ________________ CITY: ________________ ________UNIT: ________ ________________ ______ ___ STATE: ________ Rating Scale = (E)Excelle ZIP: ________________ nt (VG) Very Good _ (G)Good (F)Fair (P)Poor IN Out LIVING AREAS WA-RTG-40 Washington In Out KITCHEN In Out Walls

Smoke Detectors

arizona, alaska, california, colorado, delaware, florida, georgia, illinois, indiana, kansas, kentucky, massachusetts, nevada, new Jersey, new york, north carolina, ohio, oregon, pennsylvania, texas, utah, washington, washington d.c., west virginia & more. do NoT put over a busy background

Doors/Woodwork Locks Ceilings Electric Outlets Smoke Detectors

503-933-6437 BATH ROOM

Towel Bars

Sink & Vanity

Toilet

Tub/Shower

Fan (Exhaust)

Floor

Electric Outlets Light Fixtures

Light Fixtures Doors/Woodwork Locks Ceilings Electric Outlets

state specific forms for

PMS 280/PMS 7543 over color

Essential Services Plumbing Heating Electricity Hot Water Smoke Detectors

©2009 NO PORTION of this form may be reproduced without written permission .

sales@rentegration.com 02