Enter your email address for weekly access to top multifamily blogs!
RentSauce
  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Team Blogs
    Team Blogs Find your favorite team blogs here.
  • Login
    Login Login form
RentSauce

RentSauce

RentSauce shares multifamily news and information in SEO, Online Marketing, Technology, and Social Media. Information about contributing authors is found at http://rentsauce.com/

Posted by on in Apartment Marketing
Every year businesses budget thousands for market research. Prices may range from a few hundred dollars for general market overviews to tens of thousands for customized market-specific studies. But before you start shelling out the big bucks to find out what the market thinks about you and your properties, take a moment to consider the information that is already freely available to you. Where is all of this valuable market data, you ask? Look no further than your social media accounts and reviews. That’s right. Resident complaints and feedback provide real and specific opportunities to find out what’s important to your prospective renters and identify the details that will make your properties more appealing. Sometimes your residents are going to walk into your office and tell you exactly what they think. But these days they’re just as likely (or more so) to do their venting online: where the whole world can see the problem. Some properties, hoping perhaps to avoid this potentially ugly challenge, have adopted policies that restrict the rights of residents to post their dissatisfaction online, or as in a recent example, actually added a clause to the lease forcing residents to connect with the property on social media. These policies are not only the source of widespread criticism and ridicule, they have the potential to make it harder for properties to benefit from the honest and open communication that the internet facilitates. Finding ways to effectively “listen” to resident complaints, whether they’re received in person in the leasing office or...

Posted by on in Property Management
Determining property value is one of the great difficulties faced by multi-resident housing investors. Many investors have previous experience with other types of real estate, typically residential homes or duplexes. However, the methods used to value those properties are different and often much simpler than the methods needed to value multifamily. For example, it is generally quite easy to find the fair market value of a single family residence by using a comparative sales approach. However, investors and appraisers use a variety of techniques to determine the fair value of a multi-resident property. Among these methods, The Rule of 150 is one of the most common. What is The Rule of 150? The Rule of 150 applies to the operational profitability of a multifamily property. It suggests that for each additional $1 in monthly NOI (net operating income), the value of the property is increased by approximately $150. This rise in NOI can come in one of two ways: increasing income or decreasing expenses. How does it work? Unlike the comparative sales approach mentioned above, multifamily property valuations are primarily a function of the CAP (capitalization) rate. This method maintains that by improving the financial operation of a building, this will in turn improve its overall value and equity. The following terms and formulas will help to explain further: NOI = income minus operating expenses Capitalization Rate = a measure of the income produced by an apartment building divided by the cost of the building Simple CAP Rate Formula: Capitalization Rate = NOI/Building Value So as an example, if a property generates an annual...

Posted by on in Social Media and Technology
Recently a client called into our SaaS support line. The conversation started like this: Client: How do I use your API to pull rent payment statuses and amounts for all residents of a particular property at the beginning of each month into an Excel spreadsheet? So, the client really just wanted to send out rent reminder emails, a core feature of our software. Rather than building an Excel macro which calls our API, our support rep showed the client how to configure the monthly emails. This scenario is called the XY Problem. Here’s how it goes: User wants to do X. User doesn’t know how to do X, but thinks they can fumble their way to a solution if they can just manage to do Y. User doesn’t know how to do Y either. User asks for help with Y. Others try to help user with Y, but are confused because Y seems like a strange problem to want to solve. The XY problem is asking about your attempted solution rather than your actual problem. This has been described in marketing as the “drill-hole” problem. If you work at a hardware store, and a customer comes in looking for a drill bit, maybe they aren’t actually trying to buy a drill bit. Maybe they’re trying to buy a hole in their wall. Why would they want a hole in their wall? To put a screw or nail into it. Why would they want a nail or screw in their wall? To hang a picture. What they really might want are picture-hanging solutions,...

Posted by on in Multifamily Training and Career Development
The multifamily industry continues to struggle with employee retention. The turnover rate has continued to stay in the 30 percent range for quite some time1. Every company, regardless of industry, has the task of keeping their employees happy. People want to love where they work, so companies have to compete with other career opportunities, above average pay, affordable benefits, and realistic work-life balance expectations, all while keeping costs at a minimum. Employee turnover costs companies millions of dollars. According to Ere Media2, replacement costs for entry level employees are between 30-50 percent of their annual salary, mid-level employees cost 150 percent of their annual salary, and for high-level or highly specialized employees, it can cost up to 400 percent of their annual salary. So how does this translate if a business loses 12 employees in one year (averaging one per month)? It translates into $1.5 million in employee turnover costs. That’s assuming six of those employees were entry-level with a $40,000 salary, four were mid-level with an average salary of $80,000, and two were senior-level employees with a $120,000 salary. According to the same source, the conservative end of these numbers is also bad. Companies are looking at $250,000—the lowest amount you could imagine for losing 12 employees. Multifamily has all these challenges, plus more. Multifamily employs people to not only fill units with new, qualified residents, they are employing people to handle the most sensitive aspect of a person’s life—their home. The resident experience is crucial to a property’s success and if something goes...

Posted by on in Apartment Marketing
Fresh off the heavy advertising push for Black Friday and Cyber Monday, many people now have heads filled with brand logos and taglines. So let’s take a minute to discuss what exactly a brand is. What do you think of when you hear the word, “branding?” Iconic logos or color schemes like Target’s bullseye or Nike’s swoosh might immediately come to mind. In reality though, it’s what’s behind these outward visuals that really leaves a lasting impression. Companies need to clearly establish a brand identity that can first be effectively communicated to employees and can then be experienced by their customers. For many apartment communities, these brand identities are shaped at the corporate level and then are extended out to all the various properties. In other cases, individual properties carry their own brands. Regardless of where the brand strategy is conceived, it’s important for each employee to think about how their job contributes to the brand and what they can do to leave positive impressions on those who interact with the brand.   As I’ve thought about this topic, here are a few quick ideas for mapping out a brand experience to back up your outward visuals: First off, make it a priority to craft a brand promise. A brand promise is a statement that defines what you would like your brand to stand for and what type of experience you will provide to your customers. Just as many companies have a mission statement, it can be helpful to create a written brand...

Posted by on in Miscellaneous
Six teenage boys “jacked up” on Mountain Dew crawled into the white Chevy Suburban I drove in high school. Growing up in Oregon we were river rats, more likely to be on the river than in math class. This particular trip was different, it was a night rafting trip, and the excitement was palpable. We loaded our rafts (well, pool toys that would serve as rafts) and headed to the river. When we got to our drop-in point we discovered that the parking lot was closed, and we had to change our plan. We knew the river by heart, like the lyrics to the new Blink-182 single, and thought a change would be fine. We moved our drop-in point down the river to a spot we weren’t familiar with and jumped in, hyped and ready to raft. As the night wore on the river became unfamiliar and we realized we were lost. Our original plan was specifically designed from point A to point B. With that purpose in mind we would have returned home safely. Once we had to change our plans with no purpose other than to be on the river, we got lost. Just as there are hundreds of rivers in Oregon, there are hundreds of accounting software options. How do you pick the right accounting software and not end up lost? There are a couple key things I tell my clients to look for. Was the software built with your specific industry in mind? Just like each river is vastly different, so...

Posted by on in Apartment Maintenance
The millennial generation may not even realize “CC” on an email actually stands for “Carbon Copy,” let alone have ever put their hands on an actual carbon copy piece of paper. So why are maintenance work orders still managed on these paper forms? If you’re reading this and you think that you’ve upgraded your process just because you got rid of those old white, yellow, pink forms a long time ago, think again. My guess is the replacement is simply printer paper, still not quite the ultimate solution we are looking for. In today’s technology landscape, so much focus is being placed on pushing residents towards paperless payments, completing applications online, and signing leases electronically, but what about maintenance? Isn’t there an app for that? Why are we still using carbon copy paper or printed service requests? Most apartment community websites now have forms for residents to enter their service requests electronically. However, some of them simply send an email which is then printed out. Worse yet the request goes into an online system to track the work, but the very first thing the leasing office does when it's received is print it. In my opinion, the persona of the typical maintenance team member might be playing a factor in resistance. These individuals work with their hands and prefer tangible problems they can fix. They are attached to the idea of tearing off the pink copy (that's the one they give to the resident, right?) of the form and leaving it behind as...

Posted by on in Property Management
In today’s world, distracted listening is endemic. Most American adults, over 90%, have a cell phone, and well over 65% of American adults own a smart phone.  With this recent trend, distracted listening is literally the click of a button or the swipe of a screen away. Tablets, laptops, MP3 players, smart phones, desk tops, TVs, Blue Tooth, etc., all provide the perfect excuse for us to not really listen to one another.  I found myself easily falling into the trap of not paying attention to those I needed to most; co-workers, customers, management, and to those I valued most; my wife and my daughters. I realized that I was providing more time and focus to my smart phone; emailing customers or reading the latest tweet from ESPN than I was to my three year old trying to get her daddy’s attention. I decided it was time for a serious change in my listening habits and focus. I needed to be able to focus on that which was most important, to remove the distractions, and truly be in the now. In the midst of pondering this question and seeking to determine a process to improve my listening focus, I took a vacation with my wife and children to California. While walking along the beach early one morning with Lucy, the previously mentioned three year old, we saw a large sea shell. This sea shell triggered a faint memory and reminded me of a literary device utilized by William Golding in his classic novel, “Lord...

Posted by on in Property Management
In life we are all customers of someone or something and we tend to always gravitate back to the places where we have the best experiences. If you have a bad experience while shopping at Walmart, but head over to Target the next day and have a positive experience while shopping there, you are way more likely to return to Target more often than Walmart. As you have good experiences you will become a loyal customer to that company or brand. You need to ask yourself what is it that has you coming back to the same places over and over again. When you think about it, what makes them the best or makes you the best at your job? It's more than just being good at your job, it has to do with the way you are interacting with your customers. I was recently reading a blog1 from customer service guru Shep Hyken, and he told a story about a doctor friend that he has and asked him what made him great. His doctor friend said "All the surgeries are pretty much the same, with the exception of the occasional problem. But, what’s not the same are the patients. Each of them are different. They are all people and need to be treated as if they are the only patient I have.” It is not that he is one of the best surgeons, but how he acts towards each person that he treats that makes him the best. We can take this example and really run with it. If you...

Posted by on in Resident Retention
There’s no question that exceptional customer service leads to increased resident retention. However, according to the NAA Survey of Operating Income and Expenses1, the resident satisfaction rate over the last three years has remained fairly constant at about 76 percent, but residents’ intent to renew declined from 58 percent to 53 percent over the same period. If a large majority of residents are satisfied, why are they still undecided when it’s time to renew? This puzzler may be best explained as the Cookie Conundrum. Imagine that Property X puts a tray of hot cookies in the leasing office. Throughout the day, delicious cookies are eaten by delivery guys, property staff, neighborhood children, and the occasional resident or prospect. After eating a cookie, the resident is asked to fill out a satisfaction survey. With the delectable memory fresh in their mind, they rate the property positively. Unfortunately, a few months down the road when it’s time to renew, the tasty cookie is completely forgotten and the resident’s decision to leave the property is based on factors that cannot be masked by the temporary satisfaction of cookie - no matter how sweet. In short, sometimes resident retention efforts provide temporary happiness but fall short of creating long-term resident satisfaction. Renewal decision factors gathered by the 2015 SatisFacts Online Renters2 survey suggest renters are increasingly focused on the value of customer service they receive at the property, which is largely determined by interactions with the office staff and by the quality of maintenance services provided. The key...