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Shifting From a Sales-Oriented Model to an Experience-Oriented Model

Last week, I discussed what it would be like to be an exceptional apartment community, and how that would affect our view of our community, our confidence in our product, and our entire operational process.  I would like to expand upon one of the bigger elements: Creating a community that truly provides a memorable experience shiftswork from a sales-oriented model to an experience-oriented model. What does that truly mean, and why is it so difficult?  As I mentioned, if you have a scarce product, and you have high demand, sales happens easily on its own.  The problem is somewhat of a “chicken and the egg” scenario, however, because how do you allocate labor to creating an experience, when you need that labor to plug the holes from residents walking out the door?  This is where the “bravery” part comes in.  Too many owners like to run their communities short staffed, and while that may work for a short period, who really believes a run-down, over-worked, and generally exhausted employee is going to be able to help create an experience that is memorable for their residents?  Even staffed at normal levels doesn’t work because the duties require a temporary overlap.  Efforts into creating a unique community that result in lower turnover don’t manifest immediately, but rather build up over time, which means that the “back door” won’t be shut immediately.  So additional labor is needed in the short term to build up the “experience” while leasing continues to maintain occupancy.  Therefore, owners......
Recent Comments
Jeffrey Spanke
I couldn't agree more, Brent. I recently commented that apartments are both a product and an experience and that, yes, it behooves... Read More
Tuesday, 08 May 2012 21:57
Charles Fiori
Brent, I would draw a parallel with my business development efforts. Cold calling is one-dimensional and one starts with a name an... Read More
Thursday, 10 May 2012 02:50
Brent Williams
Thanks for the comments, Jeffrey and Charles!
Friday, 11 May 2012 13:28
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Are You a Speed Bump?

By Linda Day Harrison, theBrokerList, Chicago, IL Do you make decisions and move forward or do you contemplate things to the point that you become a speed bump? What is a speed bump? A speed bump is the person in an organization that stops progress and/or is afraid to make a decision out of fear of failure. In an organization, being the speed bump is not always a bad thing. However, day in and day out operations suffer when you are the property manager, supervisor, or property owner and it is your actions that delay or stop momentum. When managing teams, it is important to have a keen sense of judgment, and to be quick on your feet with respect to analysis, so that you are able to make smart decisions. If you put a system in place to make comparisons easy to analyze, those types of decisions can be made much more efficiently. Now you have a built-in safety net that enables you to move faster, so you can keep making progress. For instance, if you are the one reviewing quotes, create a matrix submittal form of the recurring questions you always ask before making the decision. Ask your staff to submit all requests for expenditures using your form. It can be a simple columnar form that permits an executive level overview and forces the staff, or the providers of goods and services, to answer all of your concerns, BEFORE, it hits your desk for review. Why reject requisitions over......
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Operational Due Diligence - Investigate Your Critical Factors

Due diligence being conducted prior to your offer to purchase a rent roll By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia I’m sure you are beginning to understand the vital importance of an operational due diligence being conducted prior to your offer to purchase a rent roll becoming unconditional. Once that contract is unconditional you are bound to proceed with the purchase regardless of how inferior the business is that you are purchasing. Yes, I understand that in most purchases there is a retention period, usually three months (again, this is a time period I do not agree with) whereby you have the opportunity to not pay for any managements that you may lose in this period. But, under normal rent roll contracts it’s fairly standard that a percentage of the purchase amount is usually withheld in a solicitor’s trust account and is released when the retention period has expired. Some agents believe this period is their safe guard. Well, I’m here to tell you that you must not be lulled into a false sense of security and, with that said, I feel another article is worthy of this subject. This post focuses on what I refer to as the “critical factors” that need to be investigated when conducting an operational due diligence. These critical factors are: Average management fee Average distance to property ratio Average weekly rent Management splits (percentage of houses and apartments) Number of owners against properties under management and how many are multi owners (including details of each owner’s actual number of properties) Percentage of fixed term leases Monthly disbursement methods......
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Open The Window of Opportunity with Owner-Financing

By Linda Day Harrison, theBrokerList, Chicago, IL Today more than ever, many people do not have traditional sources of employment income. With the job market shrinking, many of us are working for ourselves and are creating jobs by starting businesses and new ventures. With that being said, how does a self-employed individual purchase a residential or commercial location with the stringent financing requirements currently in place? Simple! Look at properties with owner-financing. What is owner-financing? Owner-financing is when the seller of a property is in a position to act in the capacity of a lender. The seller accepts a down-payment and an agreement for repayment. The advantages are tremendous and can be a win-win for both parties. Advantages include: More favorable rates and terms. Easier qualification process. Able to sell a property in a depressed market. Seller can get a much higher return than other vehicles such as a CD. Seller can receive a substantial down payment. Tenant can now become an owner. Less closing costs. Now like anything, there are many pros and cons depending on each seller and buyer's tax consequences and personal financial situation, including whether or not the property is held free and clear. Owner-financing should definitely be a serious avenue to consider when selling a property and when evaluating your lease vs. purchase decision on residential or commercial property. An attorney is needed to assist in the process and as a buyer, you should still do your homework, via a due diligence period. Whether buying or......
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Property Management Banking Tips

By Carla Toebe, New Century Realty, Kennewick, WA If you have decided to delve into the world of property management then the banking procedures will be a bit more involved than simply having a bank account, making your deposits and payments, and balancing the register at the end of the month. I want to stress that every state’s laws are different. Much of what I talk about in this article relates to the best practices specific to the state of Washington. The first rule of business is to establish a trust account with your commercial bank. Oddly enough, once you have sat through the session to get this going, do some telephone banking and ask the representative what kind of account you have set up to make sure it was actually set up as a trust account. Just because they tell you that it is a trust account doesn't mean it is. You have to follow up to make sure that the personal banker did their job correctly. You could find out the hard way that this account was never in fact a trust even if you were told it was. If it isn’t a trust then it will not be protected from potential seizure in the event of bankruptcy or other issues with separate personal or business accounts. Do your due diligence and don't rely on the initial set up. Additionally, you should not have any business operating funds coming into or out of this trust account. The account should......
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The Circle of (A Property’s) Life

By Linda Day Harrison, Manager Labs, Chicago, IL There are business models in all shapes and sizes. There are retail stores, medical and legal practices, cleaning companies, general contractors, grocery stores, etc. So when you think about a business, how many business models do you know of where the business owner outsources the entire business to another party? For instance, if you visit your local grocery store, is it managed by a grocery management company? How about a retail store management company? So what makes the residential real estate investment business any different? Why are there so many property management companies and outsourced service providers to the property industry? According to a colleague of mine, the answer is quite simple, “It is not easy, there is so much at stake, and there are many moving parts.” Also, when you think about properties as investments, there are often multiple partners and joint venture groups who own the assets. In those cases, the managing partner realizes they do not have enough time or expertise to do all of the functions required of them to maximize the value of the asset. That is what outsourcing offers. As a property manager outsourced by these partnerships, the responsibility of managing that asset is crucial in so many ways. First of all you have been selected by the partner on the management of the asset. All of the actions you take as the manager or management company directly reflect onto the reputation of that partner or company......
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Do Short-Term Rentals Make Sense for Property Managers?

Short-term rentalsA guest post by Ashley Halligan, Analyst, Property Management Software Guide Short-term rentals, of all natures, have become a hot commodity – and a controversial one at that. Short-term rentals can include vacation rentals and temporary housing, often sought by vacationers, business travelers, or people who have recently relocated while seeking long-term living arrangements. Either way, it’s become an ongoing topic of debate and an attractive investment opportunity for property owners and managers. In comparison to traditional rentals, short-term rentals can charge significantly higher rates given their nightly and weekly availabilities. Some property owners have earned as much as 25% of their mortgage in a single night. And during special events or peak rental periods in a given area, potential rental rates can be very attractive to property owners. Because of the income short-term rentals can procure, the opportunity for profit potential may be exponential – but there are several considerations that should be kept in mind. First and foremost, it’s essential to keep the added costs of maintaining a short-term rental in mind. These rentals can be subject to Hotel Occupancy Taxes in certain cities, while other cities require specific licensures and inspections not required of traditional, long-term rentals. Penalties for not abiding by short-term rental laws in your city may result in hefty fines. There can also be increased insurance costs. Additionally, the cost of regular upkeep and maintenance, including utilities, should be calculated. In order to continually attract tenants, your property must be kept in prime condition, both functionally and cosmetically. F......
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Property Management Versus Suppliers: The Donation Threat

Are donations really required? Seeking donations from vendors have become the standard for many of us on the property management side. Is it really the answer to our lack of budget for resident retention programs or corporate meetings? Many on-site teams are instructed to request donations from our vendors for resident retention programs and even office supplies! At what point does it become the responsibility of the vendors to fund our retention programs? Vendors are the bread and butter of our industry, without them we could not perform to our fullest ability. They are not meant to subsidize our onsite teams and corporate offices with donations. Yet there is a fear among vendors that if they do not grant a donation request they will lose our business. In a recent survey, 94% of property managers said they would not stop using a supplier if they didn’t donate. However, 81% of vendors feel they would lose business if they do not contribute and 50% stated they actually had lost business when they did not contribute. Although only a small group of property management companies make donation requests mandatory, suppliers feel threatened with loss of business if they do not contribute. In a relationship where both parties should be partners in success, asking for donations can sour that relationship - whether the implication to lost business is real or just feared. What’s in it for the vendors? In the same survey, 76% vendors feel they have been taken advantage of by a property......
Recent Comments
Guest — Laura Reese-Williams CAS
Jolene. Can I use this in our next newsletter? This is great.
Wednesday, 23 November 2011 20:49
Jolene Sopalski
Laura you are more then welcome to use it for your next newsletter. Would you like me to email you the word document? I'm glad you... Read More
Thursday, 24 November 2011 00:41
Matt Henderson
Dealing with property donation requests seems to be one of the necessary evils of this business. I try to apply a formula when de... Read More
Thursday, 24 November 2011 05:41
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Repair or Replace?

As much as we talk about the importance of recycling, the United States is the number one trash-producing country in the world.  This means that 5% of the world’s population generates 40% of the world’s waste! With last week being National Recycling Week, I thought it would be fun to show you some ways to conserve waste and save money by repairing, versus replacing, your appliances.  The below infograph, from Part Select, shows the cost to replace some common appliances.  If you click on the buttons, possible symptoms and their fixes are shown.  Have fun playing around with this and maybe next time one of your resident’s dishwasher leaks, you can save some money by repairing it.

 



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How Much Money Is Your Multifamily Complex Losing? - Part 2

Utility Billing Audit SpreadsheetA Simple Way To Conduct A Utility Billing Audit Here's how to conduct a quick and simple audit: Know the rules of the game. Collect relevant billing data. Build a spreadsheet and graph the data. 1.  Know The Rules Of The Game Before starting an audit, familiarize yourself with the state and local rules that govern how you can bill residents for utilities.  These rules can be found at your state's PUC or at a local National Apartment Association (NAA) Affiliate;  a searchable directory is located here:  http://www.naahq.org/about/join/Pages/AffiliateDirectory.aspx. In Colorado, assuming there's a proper lease in place, owners can charge 100% of the master-meter bill back to residents.  In Texas, however, owners must deduct a portion of the master-meter bill for common areas and other non-resident utility costs such as those for parking lot lighting, pools, hallway heating and air conditioning, etc.  Texas also has specific rules on how much of a service fee can be charged. Understand that the onus is on the owner to ensure that resident bills are calculated correctly, regardless of whether you outsource to a third party billing provider or manage the process yourself. 2.  Collect Relevant Billing Data Gather the following: Master-meter billing data for at least the last 12 months Amounts billed to residents for the same period. A comparison of this data will help you gauge how your utility billing program is performing. 3.  Build A Spreadsheet And Graph The Data A spreadsheet makes it easier to graph the billing data so that......
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Michelle
Thank you SO much for this!!!
Thursday, 25 August 2011 03:40
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