The Landlord Times - Valley - Jan 2013 by Professional Publishing, Inc

VALLEY

Professional Publishing, Inc www.TheLandlordTimes.com

Vol. 17 Issue 1

January 2013

EUGENE • SALEM • ALBANY • CORVALLIS

MONTHLY CIRCULATION TO MORE THAN 5,000 APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL Published in association with: METRO Multifamily Housing Association & Rental Owners Association

Multifamily Markets Salem-Keizer 2012 Summary By Anita Risberg, CCIM Senior Broker, HFO Investment Real Estate, Apartment Specialist From the start of 2012 SalemKeizer has continued to experience a decrease in vacancy rates. The vacancy factor has adjusted from a low of 2.95% in 2007 to a high of 6.13% in 2010 back to 3.07% by fall of 2012. Average rent in Salem-Keizer for a 2 bedroom 1 bath unit with no amenities built 1990 or newer is $678.00. Likewise average rent in SalemKeizer for a 2 bedroom 1 bath unit with no amenities built after 1990 is $601.00. Landlord concessions have decreased. Some landlords are starting to bill back to tenants charges for water, Continued on page 7

Apartment Insurance Costs Increase for the Second Consecutive Year According to National Multi Housing Council Report The cost to insure apartments increased by 9.5 percent between 2011 and 2012, marking the second consecutive year of rising insurance expenditures according to the National Multi Housing Council’s (NMHC) Apartment Cost of Risk Survey (ACORS). The survey covers data from more than one million apartment units, the largest number of units covered by the survey to date, operated by 55 apartment firms, tracking three principal components of insurance premiums: property, general liability and workers’ compensation. The 9.5 percent increase in 2012 came entirely from property

Professional Publishing, Inc PO Box 30327 Portland, OR 972943327

risk costs, with general liability and workers’ compensation costs staying virtually unchanged from 2011. “Respondents noted that their greatest challenges in 2012 came from obtaining adequate and affordable coverage in traditional catastrophe risk zones. In fact, catastrophe exposed properties were the major drivers of the increase in premium costs and higher deductibles,” said Rick Haughey, NMHC’s Vice President of Property Operations and Technology. “With U.S. catastrophe losses in 2012 expected to be moderately higher than average due to Hurricane Sandy, the outlook for

Current Resident or

PRSRT STD US Postage PAID Portland, OR Permit #5460

insurance costs in 2013 remains uncertain. This uncertainty mitigates what would be downward pressure on 2013 catastrophe rates due to strong underwriting capacity for primary insurers and reinsurers.” Additional key findings: The mean (nonweighted) average for the total cost of risk increased 9.5 percent in 2012, driven by an increase in property cost of risk, which accounts for 70 percent of the average apartment firm’s total cost of risk. The mean average property cost of risk increased by 10.4 percent and average per occurrence deductibles increased to $118,000 from the unusually low average deductible of $66,000 in 2011. The mean average general liability cost of risk remained virtually unchanged in 2012 after a 9 percent increase last year. The mean average workers’ compensation cost of risk in 2012 also Continued on page 5

The Tax Man Cometh for Your Real Estate Income By Jeneé Hilliard As part of the financing of Obama Care, Congress created Internal Revenue Code Section 1411, which created a new 3.8 percent Medicare tax. The new Medicare tax will take effect on January 1, 2013, and will apply to net investment income of individuals with a modified adjusted gross income of at least $200,000 ($250,000 for couples filing jointly). The tax will apply to the lesser of (1) the taxpayer’s total “net investment income” for the year, or (2) the amount by which the individual’s total income exceeds $200,000 (or $250,000 for married couples filing jointly). This new tax will hit real estate investors hard. Investment Income Includes Rental Income Under the new code provision, “net investment income” is defined to include “gross” rents. Even though “gross” rents are subject to the new Medicare tax, the “gross” rents can be reduced by deductions properly allocable to the rents. We expect that this will allow an individual to deduct depreciation, interest expense, property taxes, insurance payments, and other rental property expenses before determining the amount of “gross” rents subject to the new Medicare tax (although it does cause concern that Congress used the term Continued on page 3 Page 2

PRESIDENT'S MESSAGE Page 4

A MESSAGE FROM YOUR PRESIDENT …

METRO MULTIFAMILY HOUSING ASSOCIATION President • Jeff Denson Past President • Chris Hermanski

JEFF DENSON MMHA

Vice President • Paul Hoevet

Secretary • Pam McKenna

921 S.W. Washington Suite 772 Portland, OR 97205 (503) 226-4533 (503) 228-8303 fax

President's Message

President

Happy New Year! It is with both honor and excitement that I will represent MMHA as President in 2013. I would like to thank our Immediate Past President, Jeff Denson, for his time and effort that he gave the association this past year. I would also like to acknowledge all of our Founders, Past Presidents, and Members of the Board, Committee Chairs, and Committee members. If it was not for all of your commitment, MMHA would not be the number one rental housing resource that it is today.

Thank you to our departing Board Members: Cindy Meek of Holland Residential, Cliff Hockley of Bluestone and Hockley Real Estate Services, and Korah Young of GSL Properties, Inc. It has been a pleasure working with all of you this past year. Your service to the Association is appreciated. Please join me in welcoming our new Board Members: Maureen McNabb of Capital Property Management Services, Inc, Dave Bachman of Cascade Management, Inc, and Jay Olson of Prometheus

MMHA 2013 Events: MARK YOUR CALENDAR!

January 23, 2013 9:00 AM - 2:00 PM ELEVATE: Renewals & Expirations - Portland, OR January 30, 2013 8:00 AM - 12:00 PM ELEVATE: Maintenance and Customer Service - Portland, OR

January 31, 2013 8:00 AM - 12:00 PM ELEVATE: Basic Appliance Repair & Diagnosis - Portland, OR

Treasurer • Gary Fisher

Real Estate Group. I look forward to sharing many accomplishments with you in 2013. 2013 promises to be a very productive year for the Association. Our industry is doing extremely well and our rental housing market continues to remain one of the strongest in the Nation. As the rental housing market continues to grow, so will MMHA. Some of the growth initiatives the Association will be working on this year include continuing to increase all of our advocacy efforts to ensure our voice is heard in the 2013 Oregon Legislative Session, a focus on membership growth through continued

expansion of our statewide Council Structure and to develop and implement a plan to encourage up and coming Industry Leaders to participate in the Association. As we enter 2013, MMHA must continue to capitalize on the strength and momentum of the Industry it serves. The Association has a well laid foundation and is poised for yet another successful year. I look forward to meeting many of you throughout the year. Your involvement with your Association will help MMHA to continue its growth and remain the number one rental housing resource.

Advertise in the Landlord Times - Valley Circulated to over 5,000 Apartment owners, On-site, and Maintenance personnel monthly. Call 503-221-1260 for more information.

visit www.metromultifamily.com for more dates

M004 OR Move-In Accounting Form

About the Form: The Move-In Accounting Form provides a template for detailed financial documentation of the tenancy than what was previously part of the Rental Agreement. The form provides ample space to record all deposits, rents, specials and charges to customize and fit the unique needs of each property. The Rental Agreement still has basic tenancy accounting of rents and deposits, however the Move-In Accounting form is designed to easily display and record multiple deposit types, rent payments, concession strategies and payment plans. OREGON

MOVE-IN ACCOUNTING DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________

___________________________________________________________________________

UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________

RENT/CHARGES

DEPOSITS

PRO-RATE METHOD: c A c B c C (See #1 on page 2 of Rental Agreement)

c IF CHECKED, DEPOSITS WILL BE HELD BY OWNER

FIRST RENT PAYMENT

SECURITY DEPOSIT

$________________________

DUE ___________________________

SECOND RENT PAYMENT

$________________________

DUE ___________________________

FROM ___________________________ THRU ___________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

TOTAL ADDITIONAL DEPOSITS

$___________

TOTAL RENT DUE AT MOVE-IN OTHER MONTHLY CHARGES

$___________

(REFUNDABLE)

ADDITIONAL DEPOSITS

FROM ___________________________ THRU ___________________________

SPECIALS/ADJUSTMENTS

(PRO-RATED IF PARTIAL MONTH)

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

TOTAL SPECIALS/ADJUSTMENTS

$___________

____________________________________________________________________________________

$________________________

TOTAL DEPOSITS CHARGED

$___________

TOTAL OTHER MONTHLY CHARGES

$___________

____________________________________________________

– $________________________

PRIOR PAYMENT(S)

SPECIALS/ADJUSTMENTS

DEPOSITS PAID AT MOVE-IN – $________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

____________________________________________________________________________________

$________________________

TOTAL SPECIALS/ADJUSTMENTS

$___________

TOTAL RENT/CHARGES AMOUNT DUE

$___________

PRIOR PAYMENT(S)

____________________________________________________

BALANCE OF DEPOSITS DUE

TOTALS TOTAL RENT/CHARGES + DEPOSITS CHARGED

$___________

TOTAL PAID

$___________

REMAINING BALANCE DUE

$___________

– $________________________

TOTAL CHARGES PAID AT MOVE-IN – $________________________ $___________

RENT/CHARGES BALANCE DUE

_____________________________________________________________________________________

RESIDENT

_____________________________________________________________________________________

RESIDENT

_____________________________________________________________________________________

RESIDENT

_____________________________

_____________________________________________________________________________________

_____________________________

_____________________________________________________________________________________

_____________________________

_____________________________________________________________________________________

DATE

X X X

RESIDENT

_____________________________________________________________________________________

ON SITE

$___________

RESIDENT

OWNER/AGENT

CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________

_____________________________

DATE

_____________________________

DATE

_____________________________

DATE

_____________________________

DATE

MAIN OFFICE (IF REQUIRED)

The LandlordTimes - Valley • January 2013

VALLEY The Tax Man ...continued from front page “gross rents,” if it is actually intended to mean “net” rents). Exception for Real Estate Professionals One way to avoid the tax is for a taxpayer to qualify as a real estate professional and for the taxpayer to materially participate in the real estate activities that generate the rental income. To be a real estate professional, a taxpayer must (1) spend more than half her time in real estate businesses and (2) perform more than 750 hours of service per tax year in a real estate business. Real estate businesses include businesses that participate in rental, leasing, real property development, construction, acquisition, conversion, operation, management, or brokerage activities. But any services performed by a taxpayer in a real estate business as an employee will not be counted toward meeting the “real estate professional” participation requirements unless the taxpayer is also at least a 5-percent owner of its employer. A taxpayer will be treated as materially participating in the real estate activities that generate the rental income if the taxpayer: (1) provides at least 501 hours of service to the business during the tax year, (2) provides substantially all the services for the business (after evaluating participation from nonowners), or (3) provides at least 101 hours of service to

the business during the tax year if no other person provides more service to the business (after evaluating participation from nonowners). For example, a real estate professional who also individually owns 35 rental properties but hires a property manager and performs very few services related to the rental, operation, or management of the properties will not have materially participated in the activities that generated the rental income and may therefore be subject to the new Medicare tax. The real estate professional exception is narrow, but many real property developers, property managers, and brokers who own their own companies and also materially participate in the management and operation of their own rental properties will not be subject to the new Medicare tax. This also means that the rental income for any taxpayer who is not properly classified as a real estate professional will be “net investment income” and may be subject to the new Medicare tax. Application to Entities Although the new tax applies to individuals, but not to partnerships, limited liability companies, or corporations, taxpayers that own real estate investments indirectly through an entity will not avoid the new Medicare tax. With respect to corporations (including S corporations), the divi-

dends received by a shareholder will automatically be “net investment income” unless the shareholder materially participates in the business (regardless of whether the corporation owns real estate or not) and may be subject to the new Medicare tax. Similarly, the partnership rental income allocated to a partner who does not materially participate in the rental business of the partnership will be “net investment income” and may be subject to the new Medicare tax. Investment Income Includes Gain on Sale of Real Estate In addition to applying to “gross” rents after deductions, the new Medicare tax also applies to the net gain on the disposition of any real property not held in a real estate business. This means that gain on the sale of a principal residence may be subject to the new Medicare tax to the extent the gain is not sheltered by the principal residence exclusion. This also means that the gain on the sale of appreciated rental property may also be subject to the new Medicare tax unless the gain on the sale is not

recognized, for example, as a result of a taxpayer’s completing a Section 1031 exchange. Tax-Saving Ideas The new Medicare tax casts a wide net to tax rental real estate income and capital gains on sale. Individuals who anticipate being subject to the new 3.8 percent Medicare tax may want to engage in advance tax planning before the tax becomes effective, for example, by selling appreciated real estate in 2012 to avoid the new Medicare tax or investing in tax-free income-producing assets instead of rental properties. The new Medicare tax may provide an additional incentive for taxpayers to complete a Section 1031 exchange after January 1, 2013. For further information about Medicare tax and real estate income, contact Jeneé Hilliard at (503) 205-2505 or at jenee. hilliard@millernash.com.

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EUGENE • SALEM • ALBANY • CORVALLIS

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EUGENE • SALEM • ALBANY • CORVALLIS

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Circulation Manager Andrea Coulter • andrea@propubinc.com Designer Andrea Coulter • andrea@propubinc.com

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

Serving the Eugene, Salem, Albany, and Corvallis Multifamily Housing Industry More than 6,000 Distributed Monthly www. TheLandlordTimes.com The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, omport an endorsement of or support for the products or services offered. The LandlordTimes - Valley is produced monthly and is published by Professional Publishing Inc. An Oregon Corporation. PO Box 30327 Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751 Copyright 2013. All rights reserved.

The LandlordTimes - Valley • January 2013

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RENTAL OWNERS ASSOCIATION President • Jim Straub Vice President • Michael Steffen Secretary • Scott Smith Treasurer • Pat Costello

205 W. 10th Avenue, Eugene OR 97401 (541) 485-7368 (541) 284-4052 info@ laneroa.com

Board Members: Dennis Casady, Dennis Chappa, Robei Ellis, Devin Gates, Eric Hall, Tia Politi

A Message from Your President … Happy New Year! I hope you and your family had a safe and wonderful holiday season. As we begin this new year, your state organization, ORHA (Oregon Rental Housing Association) is focused on the upcoming Oregon Legislative Session which begins on January 14th. Landlord- Tenant Coalition meetings have continued with discussions on topics such as: renter’s insurance; screening and the use of past criminal arrest, conviction and eviction records; extension of the statute of limitations to pursue tenants owing money; and other issues vital to Oregon landlords’ interests such as our proposal for return of non-compliance fees for

many tenant violations. Our most recent Landlord-Tenant Coalition meeting was held on December 18. Please read my Legislative Update on page 15 in our newsletter. As your State Legislative Director, I plan to provide updates to you on legislative activity during the 2013 Oregon Legislative Session. Our comprehensive Fair Housing Workshop was held on Saturday, December 1st. This workshop, with instructor Diane Hess, Education Director, Fair Housing Council of Oregon (FHCO), provided members a fun and informative opportunity to learn, (from FHCO’s perspective, the agency that investigates tenant complaints) about landlord responsibili-

John Nuzzolese, Landlord Protection Agency 877-984-3572, www.TheLPA. com

Excuse of the Day "When you have a medical emergency, DON'T call 911. Call the volunteer Fire Department. The Police charged $1,000.00 for a ride to the hospital! Now I can't pay my rent." I know this is true in Nassau County. Claudia K., Levittown, NY

ties in fair housing issues. Please remember that a mistake made in a fair housing issue can cost a landlord thousands of dollars. If you have an issue in any way related to fair housing, you should call the Helpline at 541-242-2850. We took a break from our weekday workshops during December but you’ll see on page 5 in our newsletter that we are back to our schedule of two weekday workshops per month. Members attending these workshops find that the small-group setting provides them with a great opportunity to ask questions and share personal landlord experiences. With limited seating, pre-registration is required. Please see page 5 in our newsletter for registration information. We had a fantastic turnout at our November general meeting for our featured speaker, Attorney Allen Gardner. Allen walked us through those dumb mistakes that landlords make that will mean the difference between winning or losing in court. Please join me in thanking Allen for sharing his many experiences with us and for his willingness to answer so many members’ questions. Thanks also to our Affiliate Spotlight speaker, John Stoeker of Regional Dryer

Vent Cleaners, for his raffle items. If you own or manage rental units in the City of Eugene, please note that the Eugene City Council Agenda for January 28th includes a vote on the proposed Social Host Ordinance. You can read this proposed ordinance on the City of Eugene website at www.eugene-or.gov/. Please read the ordinance and share your opinions on this ordinance with your Eugene City Counselor. Please join us for our first meeting of 2013 on Thursday, January 24th. Our featured speaker will be Marcie Hale, CPA of McElhany, Shotola, Merwin & Hale, CPAs. Whether you are a member with specialized landlord accounting software or a landlord who has historically scrambled to fill out tax paperwork from receipts ‘filed’ in a pile on your desk, you’ll gain valuable tips and insight from Marcie’s presentation, “Tax Preparation and Planning for Landlords.” We’ll see you on January 24th! Jim Straub, President

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The LandlordTimes - Valley • January 2013

ow that the holidays are behind us, anyone who was not able to move before they rang in the New Year will be resuming their search for a new home. Follow up is the key to closing the sale when no decision is made on the first visit. However, many leasing people still hesitate to keep in contact with their prospective renters or make call backs on the appointments that are no shows. This question may shed some light as to why this occurs:

Q: I know I should probably follow up more on my guest cards and also call people who make appointments and don’t show up, but calling people back makes me feel like I’m “bugging them.” If they’re really interested, won’t they just come back or call me? It does seem “logical” that a person interested in your community will just naturally get back in touch with you. However, there are a multitude of options out there right now. Besides, renting an apartment is a lot of hard work, and it’s also a MAJOR buying decision. People who are looking for a new home NEED YOUR HELP! They

will continue to need assistance until they reach a decision about where they want to live. If you think back to the last time you made a major purchase, it’s likely that the salesperson helped you with your buying decision. It was probably their knowledge of the product, combined with pointing out how it would meet your needs, which were some of the determining factors in your decision. This would require the salesperson to have excellent product knowledge, establish ALL your needs (i.e. size, style, color preference(s), budget constraints, etc.) and then close the sale. However, if you weren’t quite ready to decide and then looked at and considered other options, you may have forgotten about some of the benefits of the product you looked at initially. This is where the follow up work comes in. The salespeople who keep in touch with their prospects can continue to sell the benefits of their product long after the prospect has left the sales floor. This will deepen the relationship that was established so there is a sense of commitment on both sides. Now imagine your most recent prospective renters and the circum-

stances causing them to relocate. Put yourself in their place and think about all the decisions they have to make as a result of their move. If you have an apartment at your community that will work for them and you are sincerely interested in meeting their needs, why wouldn’t you follow up with them? Of course if all you care about is just renting an apartment and not the person who will be living in it, then you’re right: You would “just be bugging them.” People can recognize a phony a mile away. On the other hand, people are also pretty good at detecting when someone sincerely cares about them and has their best interests at heart. The follow up work you do will come off as a true expression of your desire to meet the needs of your prospective renters, if you genuinely care about them.

If you have a question or concern that you would like to see addressed next month, please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@shoptalkservice.com Web site: www.shoptalkservice.com Copyright © Shoptalk Service Evaluations

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Jan, Mar, May, Jul, Sep, Nov, www.TheLandlordTimes.com

The Industry Leader in Quality

Apartment ...continued from front page remained similar to 2011 at $1,038 per full-time employee. Property terrorism insurance takeup rates increased to 91 percent in 2012, compared to 85 percent in 2011. A slight decrease in property terrorism insurance rates was also reported.

One third of Americans rent their housing, and more than 14 percent live in a rental apartment. For more information, contact NMHC at 202-974-2300, e-mail the Council at info@nmhc.org, or visit NMHC’s web site at www.nmhc.org.

VALLEY

EUGENE • SALEM • ALBANY • CORVALLIS

About the Survey The ACORS contains information about property, general liability, umbrella, workers compensation, D & O, professional liability, employment practices, environmental, and newly added insurance lines including terrorism and cyber liability. Fifty-five firms representing over one million apartment units supplied data on rates, deductibles, retentions, key coverage terms, claims history and more for the key lines of coverage. Firms that completed the survey can receive exclusive access to the full data set, along with the report analysis by Conning Research and Consulting on behalf of NMHC. Non-participating NMHC members can download an executive summary and a PowerPoint summarizing the results at www.nmhc.org/ goto/61017. Based in Washington, DC, NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC’s members are the principal officers of firms engaged in all aspects of the apartment industry, including owners, developers, managers and financiers. The LandlordTimes - Valley • January 2013

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By Ernest F. Oriente, The Coach Regroup…is this a new management trend? Not a chance! Regroup is simply an opportunity to end one month’s business cycle, recap the performance at each property you manage and outline a plan of success for the new upcoming month. Why does it work? Because it allows each person on your team to assess their performance from the previous month, and to make any necessary adjustments for the new month. Here’s how it works. Scheduling and preparing regroup: Regroup should be scheduled during the slowest time of each month and should start before your leasing office opens in the morning, if possible. A solid and productive regroup takes about two hours and will require about one hour of preparation by your resident manager. Be certain to have a blank chalkboard or a standing easel for taking notes and keep distractions to a minimum. Regroup is also a time to build on the creative juices from each person on your team, so make regroup a special part of each month and allow for everyone to have equal time to share their feedback. Simply stated, there are no wrong questions or topics discussed at regroup and your team will respect and respond positively to this freedom.

Tip From The Coach: As the supervisor for your properties, it is critical for you to attend regroup and actively participate in them. Your preparation for each regroup should begin by reviewing the agenda from the previous month with your resident manager, to assess if the to-do list from last regroup was accomplished. Then, review together the new regroup agenda making certain your resident manager’s gameplan is consistent with your company goals and expectations. Running the meeting: Each month’s agenda for regroup should begin by reviewing the financial information important to your company and its investors. This might include “actual” revenue and income versus budget, resident retention percentages, collection issues or expense performance versus the budget. Then, have your resident manager address any problems experienced during the past 30 days or any upcoming issues that will affect the property. Next, map a calendar of activities that will enhance the performance for this property. This might include a monthly event to thrill your residents, a new marketing plan, or a special focus on your resident referral program. This part of regroup is where the creativity of your team really starts to roll and if you listen closely, you will

hear many “golden” ideas. Lastly, have your resident manager recap the team goals for the new month and be certain the meeting always closes on a positive note! Tip From The Coach: As the supervisor for this property, take detailed notes during regroup, then send a brief memo to your resident manager recapping the day. Include in this memo a to-do list for the upcoming month, so your resident manager will clearly know what is expected. Clear communication is the cornerstone of management success. Meeting individually with your team: At the close of each regroup, plan to spend another thirty minutes more with your resident manager to recap the day, cheer their success, and discuss the specific performance of each individual at the property. During this meeting ask your resident manager if he/she needs any additional support or training to develop their skills or the skills of their team. This is the most important part of regroup as time spent developing your team for future opportunity, will make for pro-active management which means you always have a sharp person ready to be promoted to the next position. Tip from the Coach: In the same spirit of the individual meeting you have with your resident manager, ask him/her to have a similar meeting with each member of their leasing team. This will help to grow their skills as a leader and you will want to attend the first few meetings to be certain the agenda for the individual meetings are exactly as you expect. In fact, as a manager, always “inspect what you expect”. A good rule of thumb! Wow! Such an important topic and so much to share! Incorporate regroup into your next 30 day business cycle and see for yourself how successful the time is spent! Need help planning your agenda? E-mail a quick note to ernest@ powerhour.com and the Coach will send you a sample agenda in ten minutes. It’s easy! The Coach says so! Want to hear more about this important topic or ask some additional questions? Send an E-mail to ernest@powerhour.com

and The Coach will E-mail back to you a free invitation to be a participant on a PowerHour conference call. Author’s note: Ernest F. Oriente, a business coach since 1995 [29,760 hours], a property management industry professional since 1988--the author of SmartMatch Alliances--and the founder of PowerHour... [ www.powerhour.com and www.powerhourseo.com and www.pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competitive sales strategies, and high leverage alliances for property management teams and their leaders. He provides private and group coaching for property management companies around North America, executive recruiting, investment banking, national utility bill auditing [ www.powerhour.com/ propertymanagement/utilitybillaudit.html ] national real estate and apartment building insurance [ www.powerhour.com/propertymanagement/insurance.html ], SEO/SEM web strategies, national WiFi solutions [ www.powerhour.com/propertymanagement/nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee policy manuals [ http://www.powerhour.com/ propertymanagement/employeepolicymanuals.html ] and social media strategic solutions [ http://www.powerhour.com/propertymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified in the Xerox sales methodologies. Recent interviews and articles have appeared more than 7000 times in business and trade publications and in a wide variety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 200+ articles for the property management industry and created 350+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town… Park City, Utah, at 435-615-8486, by Email ernest@powerhour.com or visit their website: www.powerhour.com

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The LandlordTimes - Valley • January 2013

Multifamily

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sewer and garbage. In properties where landlords have been successful in billing utilities to tenants, the overall cost for these utilities has decreased. Tenants are more mindful of usage and report plumbing problems and leaks more frequently. Metro Multifamily Housing Association Fall Survey for 2012 provided the following information for Salem and vicinity: • 64 properties surveyed for a total of 3912 units. • Non-smoking apartments: 47.3% • The average number of days vacant for 2012: spring 28 days and fall 23 days. • The average rent per square foot: .78 • Tenant paid utilities: water, 14.6%, heat 92.7% and garbage 12.9%. • Landlord incentives: 8.8% Spring 2012, 4.9% Fall 2012. Tenant demand for apartments has continued to be strong. This has prompted developers to begin construction of new apartment properties in the Salem-Keizer markets. The following projects listed are just a sample of the new projects being built: Orchard Ridge 180 units, 100 units breaking ground on Wallace Rd, 30 units, townhouse style, in South Salem, 54 units on NE 45th, and proposed 100 plus units downtown Salem. Absorption of new units is expected to be strong.

Costar Multifamily Sales Comps for 2012: Salem-Keizer 27 recorded transactions. Eleven (11) of these transactions were refinances with owners taking advantage of lower interest rates and in some cases restructuring the ownership entities. Several of these transactions involved buying out existing partners. Sixteen (16) of these transactions were sales of multifamily properties ranging from brand new units to seasoned units. The following are a few examples of transactions for 2012: The Sandalwood Apartments, 82 units, $44,817.00 per unit, built in two phases 1980 and 1990, sold for $3,675,000.00. Alpine Village Apartments, 53 units, $40,566.00 per unit, built in 1968 sold for $2,150,000.00. The Arboretum, 23 units, built 2009, $91,304.00 per unit, sold for $2,100,000.00. Ten units on Flying Squirrel Way NW sold for $65,000.00 per unit, year built 2000, sold for $650,000.00, originally built as condominiums, and this property was a bank owned deal. Cap rates for 2012 recorded sales range from 6.67% to 9.0%. Favorable interest rates and financing packages are fueling investor demand for quality multifamily properties. As investors and institutions chase and acquire Class A assets in the major metropolitan areas, the availability of these types of assets is

decreasing. Competition for quality assets is high. Investors are beginning to look at secondary and tertiary markets to buy quality assets for their portfolios. This is a trend that is occurring nationwide. For the owners of large properties of 100 plus units, who have been considering a sale, this is an optimum time to offer your property for sale. For copies of articles or report and surveys please don’t hesitate to call or email Anita Risberg, CCIM, HFO Investment Real Estate. 971-717-6336 or anita@hfore.com Anita Risberg, CCIM Senior Broker, HFO Investment Real Estate, Apartment Specialist I have selected data from Powell Valuation 2012 Spring Apartment Survey, Metro Multifamily Housing Associations 2012 Fall Survey, CoStar for sales data and Commercial Investment Real Estate Magazine of the CCIM Institute for national trend information. I would be happy to share any or all of these sources with you if you will email me at anita@hfore.com or call my direct number in our Portland office, 971-7176336. It would be my pleasure to answer any questions you might have.

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