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Posted by on in Property Management
An imperative skill for property managers to possess is knowing their rental audience, and recent research suggests that millennials, the demographic of people between the ages of 18 to 33, are the audience property managers should cater to. Homeownership is on the decline, and more millennials are renting than any other demographic. In fact, between 2011 and 2015, 60% of rental housing applicants were millennials. This is due in large part to students’ rising loan debts, which has tripled over the past decade. Factor this in with the 2007 housing crash, and it’s no surprise that Generation Y is more likely to rent an apartment than buy a house. Multifamily property managers are beginning to realize that as the millennial market is growing, strategies should be implemented to appeal to the younger age group. In 2010, it was estimated that in the United States there were 62.6 million people between the ages of 20 and 34, and an astounding 37% of them were renting apartments. While this is good news for multifamily property managers, it is important to note that millennials have very different desires than previous generations of renters when it comes to what they consider when searching for an apartment. At Trimark Properties in Gainesville, Florida, we specialize in student housing and have discovered the factors that millennial renters found to be important when searching for an apartment. Considering these five factors is important when attempting to attract Generation Y student renters. Location – One of the most...

Posted by on in Apartment Leasing
When a lead doesn’t pan out, it’s easy to chalk it up as a bad lead. The reality is that failed conversions are often more complicated than that.   Sometimes prospective renters contact you before exploring all the options. Occasionally, a comparable community has amenities, features or a price that better fits their needs. However, the most common and controllable reason for a failed conversion is the technique of the leasing consultant. Odds are, some leasing consultants at your community convert leads at a higher rate than others. It’s probably because they have more experience and more training.  That means the best way to quickly improve the conversion ratio of struggling leasing consultants is through call recording and follow up training. Call recording comes with several benefits:   Accountability and oversight. Very rarely do leasing consultants receive training on how to sell on the phone, let alone specific training based on their phone conversations. Even those who do receive training can easily fall into bad habits, like forgetting to schedule a tour of the community while on the call, or asking for the source. More consistent sales experience. You’ve dedicated time and resources to develop a system you believe works, so it should be consistent across your entire portfolio. A prospect who calls one of your communities in San Diego should have a similar experience to one who calls your community in Oakland. Better conversion rates. If everyone on your team is on the same page, it’s less likely that those...

Posted by on in Multifamily Training and Career Development
If you're new to the property management/multifamily housing industry, you might feel as if industry veterans speak a language all their own. And, they really do, don’t they? It reminds me of the scene in the movie Good Morning Vietnam where Adrian Cronauer remarks to his boss, who is fond of using military acronyms and jargon, “Excuse me, sir. Seeing as how the VP is such a VIP, shouldn’t we keep the PC on the QT? ‘Cause if it leaks to the VC he could end up MIA, and then we’d all be put on KP.” I remember in my early days my CM coming to me telling me, "Rommel, remember when you're filling out the MSR to get PTE...." WHAT????? So…if you are new to this whole thing, we wanted to give you a quick primer on the terms you’re likely to hear and what they mean, so that you can get up to speed quickly! And if you're an industry veteran please forward this to your new associates and add your own as well! Occupancy: This is a number, expressed in a percentage, that tells how full a community is. So, a 100 unit community with 95 apartments occupied is said to be 95% occupied. Availability/Exposure: This is a number, expressed in a percentage, that tells how many units are available for rent. This number is often confused with occupancy, but it is different! So, if a community has 100 units and there are 8 units available for rent...

Posted by on in Apartment Leasing
Long_Standing_Vacants.jpg Vacancy loss is the bane of all multifamily housing operators. Once an apartment is empty, that revenue opportunity is lost forever. So it’s not surprising that all sorts of methods (and madness) have evolved to deal with units that have been vacant for a long while—the so-called “long-standing vacant” (LSV). Over the past 10 years, multifamily housing (MFH) has seen rapid adoption of automated pricing and revenue management (PRM) systems. By now, I’m guessing more than half of professionally managed multifamily units are priced using some form of automated PRM system. Yet, there are still many business practices that affect optimizing revenue for all MFH operators, whether on an automated system or not. Among the most critical of those is dealing with LSVs. The most important revenue management concept is that we manage “demand streams” and not just individual units. So we look at the supply and demand of studios, 1 BRs, 2BRs, etc. and set separate strategies for each based on the underlying statistics. Where individual units have noticeable differences, we deal with those differences by assigning unit amenity values—both positive and negative. In this context, the most important RM principle relevant to LSVs is this: It doesn’t matter whether one unit is vacant 52 weeks in a row or 52 units are vacant one week each consecutively. It’s the same cash flow! Apartments are not bananas that rot or spring clothing lines that go out of fashion. We don’t have to reduce a price just because a unit has sat vacant....

Posted by on in Property Management
Showing your rental property to prospective tenants necessitates not only meeting new people, but showing them into the apartment. While most potential renters are simply average folks in need of a place to live, the process of showing apartments can be dicey. Learn how to protect yourself from a bad situation with these apartment viewing safety tips. Screen the Renter First It's a good idea to screen renters as a first line of defense. Anyone who is wary of passing a basic credit check is not a quality tenant. Screening the tenant provides you with information that the renter can afford to take your apartment and pays bills on time. A screening might show your renter's eviction history, criminal record or employment history. Thus, you may be able to prevent many problems from even arising by declining a tenant with a record of eviction due to rent nonpayment or violent crime. As long as you apply the same criteria (and ask the same screening questions) to all tenants, you will avoid accidentally discriminating against a potential renter. At the showing, ask to see identification. Do not assume that the person you are meeting is indeed the individual who completed the tenant screening. By taking the extra step to confirm that the person who contacted you is in fact the person you are meeting, you can avoid getting into a potentially dangerous situation. Direct Renters Through the Unit If you enter the apartment first, you could be blocked from leaving by a potential...

Posted by on in Apartment Investment
Entrepreneurs will tell you that they learn more from their mistakes than their successes.  My definition of an entrepreneur is a person who has earned enough money to pay for his own mistakes (I fall in that category).  We have found it incredibly helpful to reflect upon our mistakes so that we can learn from them and not repeat them.    In the previous Article, we discussed bed bugs and septic systems.  Let me recap our thirteen biggest mistakes: Nightmare manager Unscrupulous mortgage broker Incompetent team member Sub-par employees Deceased tenant Bed bugs Septic systems Safety net Long-term holdings Signing an exclusive with a broker Utilities Capital expenditure Negotiation We would like to tackle the next two mistakes on our journey to 674 units. Incompetent Team Member:  An incompetent team member can be a huge drag on your business, not to mention detrimental. When hiring a potential team member, start by asking your current team and those in your sphere of influence for referrals. When it comes to those who aren’t doing their job the right way, give them time to get it right, but if it doesn’t happen within an adequate time frame, don’t hesitate to replace them as quickly as possible.  We have employed several incompetent team members, including accountants, lawyers and maintenance technicians.  Our first accountant was referred to us by a team member, but she clearly had very little experience in dealing with real estate.  We quickly replaced her before the problems began to accumulate.  It was our mistake not...

Posted by on in Multifamily Industry News and Trends
Back to the Suburbs | Edition 1 Major Mixed-Use and Commercial Projects in West-Central Broward CapasGroup Realty Advisors is pleased to announce “Back to the Suburbs,” a new series of articles focusing on the significant development pipelines that are emerging in suburban communities throughout South Florida.  In this first edition, we focus on suburban mixed-use and commercial developments that are either under construction or planned in the west-central Broward County communities of Plantation and Sunrise. When the current economic recovery began several years ago, investors and developers seemed to be laser-focused on urban opportunities. Today, while urban demand remains strong, there is renewed excitement surrounding certain suburban markets in South Florida. This report summarizes several suburban mixed-use and commercial development projects that are expected to have a significant impact on west-central Broward County, Florida. Major Office Development – American Express Finds a New Home American Express plans to consolidate its Plantation, Weston and Miramar operations into a new corporate headquarters facility in Sunrise. Positioned on the east side of NW 136th Avenue, just south of Sunrise Boulevard, the 40-acre, 400,000 square foot campus will house over 3,000 employees. Construction is targeted for completion toward the end of 2016. Suburban Mixed-Use Development is Redefining Western Broward Three proposed, suburban mixed-use developments could drastically change how we think about suburban living in west-central Broward County. All three of the projects detailed below involve the creation of intense live-work enclaves in key suburban locations. Fashion Mall Site Gets A Second Chance The former Plantation Fashion Mall was recently purchased by Encore Capital Management who...

Posted by on in Property Management
Your building is leaking.  Your pipes are failing.  Your insurance company might even be calling.  You need a repipe.  The problem is that it’s going to cost millions of dollars, and your board doesn’t have it in your reserves.  Do you take out a loan, issue a special assessment, or both to cover the costs?  Or do you wait, hoping you can raise the funds over the next several years, and try to buy more time? Unfortunately, for boards facing the prospect of a repipe in their community, making this choice is increasingly difficult, increasingly costly and increasingly litigious.  As I write this article, there are pending lawsuits against condo boards on both sides of the equation.   Pay Up and Stop The Leaks! In Hawaii, where a typical cast iron waste line replacement costs tens of thousands of dollars per unit, most properties, and homeowners, simply don’t have the cash to pay for it out of pocket.  Buildings that are in critical condition are declaring a “state of emergency,” and taking out loans to get the pipes fixed.  To pay off the loan, each owner’s portion of the loan payment is added to their monthly condo fees in order to cover the loan costs.  Sure, no one is happy about the increased fees, but the job gets done and the leaks stop. Clogged drain pipes, like this one, are causing a variety of problems in buildings across Hawaii including leaks, odors, slow running drains, and corrosion. But what happens when...

Posted by on in Apartment Investment
There is no doubt, leaking pipes at your apartment complex are a nuisance.  From residents to property managers to maintenance supervisors to owners, everyone is impacted when a property is leaking.  Oftentimes, the thought of selling the property to get rid of the headache seems appealing.  However, leaking plumbing is hard to hide, and chances are you will not be able to pass off the property without taking a valuation hit unless you get the pipes fixed. If you are thinking of selling your property and are in need of a repipe, it is in your best financial interest to get your piping systems fixed before you list. With turnkey contractors who are able to quickly and cost effectively complete a repipe without moving out residents, selling a hassle free building will most assuredly increase the value of your property, which will typically offset the cost of the repipe. Because new pipes (installed behind patched walls) have no curb appeal and an ambiguous correlation to increased rents, many property owners are hesitant to make this upfront investment before listing their property.  However, inspectors, insurance agents, appraisers and potential buyers are sure to uncover the evidence if your property is leaking, and will either lose interest or submit a low-ball offer knowing the property has issues. By being upfront about the investments you have made (just like you would promote a new roof or renovated kitchens), promoting a recent repipe indicates to buyers that the property is well maintained and worth their...

Posted by on in Apartment Leasing
Since writing about HUD's Fair Housing Act guidelines, I have received inquiries about how to handle an applicant with a criminal conviction record in a nondiscriminatory manner.  One example is: An electronic background check reveals the applicant has a 5-year-old conviction for grand theft auto, which is a felony, so the application is denied based on the conviction only.  " A policy or practice that denies housing to anyone with a prior arrest of any kind criminal conviction cannot be justified. " says the general counsel for the US Department of Housing and Urban Development thus that property manager could be breaking the law.  The better approach is: a background check reveals the applicant has a 5-year-old conviction of grand theft auto.  The agent conducting the screeing contacts the applicant's prior landlord and finds this person evicted a month ago for not paying the rent and his employer indicated he was recently fired. With an established policy of not renting to persons with a prior eviction record, you may be justified in rejecting the application since the denial is not based solely on the conviction record. On the other hand, the agent conducting the screening on this individual, upon learning about his conviction record, contacts the current landlord and finds this individual has paid rent on time, is a model tenant, and has a solid employment record.  Under the ACT guidelines, he should be welcome him into your community regardless of the conviction. The ACT is confusing, thus am always available...