If you are looking to expand and grow your property management business, you should position your business opportunity as an attractive investment opportunity to the banks and lenders.

Having a business plan will enable new property management companies and property managers encourage loans and promote growth. A formal business plan is just as important for an established property management company as it is for a new company.


What is a Business Plan?

A business plan is your firm's resume. It defines who you are, what your goals are and what is your revenue model. 

A business plan aligns employees, sales personnel and vendors with the company's goals and operational procedures. A good business plan helps you make good business decisions in allocating resources and handling unexpected situations. 

A good business plan should include a current and pro forma balance sheet, an income statement, and a cash flow analysis.


Why Write a Business Plan?

A Business Plan is an important document in any loan application because it provides organized information about your company and how you will repay borrowed money. A good business plan serves as a blueprint of your organization for outside management of your operation and finances, promotion and marketing of your business, funding, credit from suppliers, and achievement of your goals and objectives.

Before you begin writing your business plan, consider four core questions:

Don't rush into a New Business Venture without answering these questions:
 
* What is the Nature of your service or product?
* What Needs does your business fill?
* Who are the potential customers for your product or service? * Why will they purchase it from you?
* How will you reach your potential customers?
* Where will you get the financial resources to start your business?

Finally, a Business plan is a crucial step for new property management companies and property managers which will reap benefits in the longer run.

Affordable Housing: What is it? How can we, as vendor/ associates, better serve the needs of these managers?

Recently, during a conversation I was having with a new Atlanta Apartment Association member, I was asked what exactly it means when someone refers to a Community as Affordable or Tax-Credit. This individual was under the impression that these properties were essentially low income properties in undesirable neighborhoods with like deferred maintenance issues! I am familiar with many communities which fall into the Affordable Housing category that are newer, attractive A properties in very desirable locations. I hope to shed some light on this important component to our industry.

The difference between these Affordable/ Tax-Credit properties and their Conventional Market-rate competitors is that the developer/ owner of the property will receive a Low Income Tax Credit Benefit to provide housing to those earning below a certain wage. There are many variations of this; some properties may be 80% Affordable Units and 20% Market Units. Some properties may receive Government subsidies for the rent as assistance to its residents.  These communities are heavily regulated by HUD (Department of Housing and Urban Development) and by DCA (Department of Community Affairs) for their compliance within the legal guideline of the program.

A few days ago I was on the receiving end of some particularly poor customer service. Know the feeling? Yuck! I have such a poor taste in my mouth I may not shop at Macy’s again for a whole month! But seriously, I was reading on MultiFamily Insiders and came across this interesting topic in their archived discussions relating to the Customer Service aptitude of Associates.

The discussion was about the challenges with getting into contact with Owner Managers, beginning conversations and obtaining appointments. An associate felt he had a legitimate service or product to offer and that he was being disrespected by a particular Decision Maker that he was calling on. He did not know this customer. He wasn’t getting a return phone call. From what I could gather, this particular vendor did not seem to have any empathy for the person from whom he was attempting to gain business. It is Associates such as these that telephone every single day, refuse to take no for an answer, etc. that send Owner Manager’s seeking cover. You may not catch the Owner Manager today, next week or next month but if you do not operate with a Customer Service Aptitude you will never earn their business.

I love what Jen Piccotti, an industry colleague on the west coast, had to say on the topic! “I guess it comes down to this - we can't control those around us, we can only control ourselves and our own interactions. I choose to approach decision makers, and everyone else I run into, with respect. Respect for their intelligence, their time, and their needs/wants. If I can offer something that may benefit them, then great. If not, at least we can be on friendly terms, and they don't have to feel the need to flee.”

Apartment demand in Atlanta really took off during the April-June time frame, when just over 8,100 units were absorbed. That quarterly blast took demand during the first half of the year to nearly 11,300 units, far surpassing the concurrent completion count of about 2,900 units. Thus, occupancy is starting to rise. However, the metro's June occupancy rate of 90.3 percent still ranked among the nation's weaker performances. Thanks mainly to a little bit of pricing momentum seen in the urban core neighborhoods, effective rents edged up by 0.4 percent during 2010's 2nd quarter, but annual change remained significantly negative at -3.8 percent. Dwindling new supply volumes will help Atlanta's near-term performance move toward recovery, as ongoing development is down to a total of fewer than 2,100 units.

Performance Highlights are sneak peek views of the latest apartment market performance information from MPF Research. Check out their Apartment Market Reports for detailed findings, including results on the neighborhood level and analysis of factors shaping the shifts in conditions.

Going back to early 2010, Houston's apartment occupancy rate was the worst across the 64 major metros that form the core of MPF Research's national coverage. The metro's general positioning relative to other markets hasn't changed meaningfully over the past few months, but the Bayou City's metrics certainly are beginning to look better.

Roughly 9,900 apartments were absorbed in metro Houston during the April-June period, as quarterly demand topped concurrent completions for the first time in a year and a half. In turn, overall occupancy climbed an impressive 1.4 percentage points for the quarter. And operators even managed to squeeze out a 0.3 percent bump in effective rents over that time span.

Still, that progress only brought occupancy to 88.7 percent, about 5 percentage points under the national average. And the quarterly rent increase still left effective pricing 3.7 percent under the rates seen a year ago.

Robust Demand Boosts Apartment Occupancy and Rents

MPF Research starts rolling mid-year apartment market performance results this week, and we begin with a look at what preliminary figures show for the nation as a whole. The news is good any way you slice and dice the data.

Initial calcs point to absorption of another 116,000 units during 2nd quarter, taking demand for the first six months of the year to nearly a quarter million units. We're now on pace for calendar 2010 demand to come in at the second strongest annual volume seen over the past couple of decades, exceeded only when Hurricane Katrina evacuees boosted the absorption tally in 2005.

Obviously, the addition of some jobs is a big part of the demand story, but there's more to it than that. For example, renters are continuing to return to traditional apartments from individually-owned condos and single-family homes offered for lease. Also, some young adults who had combined into roommate living arrangement are splitting up into separate households. And an improving economy means that more parents are willing to guarantee leases in order to kick their perhaps under-employed kids out of the basement. A new element that seems to be emerging now is that some apartment demand is coming from folks who recently sold their homes. A lot of them were worried that they'd never be able to unload those units, so making another purchase right away is a pretty scary move.

Demand for apartments in Orange County came in at about 2,200 units during the initial three months of 2010. Early 2010 actually marked the metro's third consecutive quarter of substantial apartment absorption, taking demand for the year-ending March to a decade high of nearly 6,800 units.

With demand well surpassing completions during recent months, occupancy in Orange County's apartment base has recovered by nearly 2 full percentage points from the bottom reading seen in the middle of 2009. However, at 94.4 percent, March 2010 occupancy still was roughly 2 points under the metro's long-term historical norm.

The bump in occupancy seen during early 2010 was enough to get rents basically stabilized. In MPF Research's same-store sample, effective rents as of March exactly matched the rates seen three months earlier. Effective pricing still was down on an annual basis, off by 3.8 percent, but that loss sure looked a lot better than the annual decline that earlier had gotten as deep as about 8 percent.