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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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How Much Money Is Your Multifamily Complex Losing? - Part 1

Utility Billing ProblemsOwner loses nearly $200,000.  Find out why and how you can avoid this situation "How much money do you estimate was lost?"  We put this question to a multifamily owner whose complexes total nearly 500 units.  His answer was shocking.  "Nearly $200,000 over three to four years."  Our next question was obvious…"How?" "It was very difficult to identify," the owner replied.  "Each year, the amount of money we paid for our master-meter water and sewer bills increased, but the amount we recovered from our resident utility billing program slowly decreased.  We relied on a billing provider to manage the process for us but the losses happened gradually enough that we didn't catch the errors." When the owner investigated more closely, he discovered that his local water utility had increased the master-meter water/sewer rates several times, but the resident bill calculations had not been updated with those rate changes.  The owner was continually paying more for utilities but collecting less. Common Utility Billing Problems While this is an extreme example of what can happen when resident utility bills are calculated inaccurately, it also exposes two very common problems in multifamily utility billing, i.e. under- and over-billing.  These problems can create significant financial losses for owners or lead to aggravated tenants. Under-Billing Costs Owners Under-billing usually occurs in submetered complexes when the master-meter rates increase but those rate changes are not carried over to resident bills.  It can also happen when common area deductions (CADs) are higher than necessary, or when legally billable......
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Search Engine Optimization for Property Managers

Title tagBy Geoff Roberts, Buildium, Boston, MA Whenever I’m asked what I do for a living, my go-to response is that “I work in marketing and public relations for a software company.” That’s a sufficient reply for most social situations, but on occasion I’m asked more specifically about my job responsibilities. Inevitably I’m stopped as soon as I mention “search engine optimization” or “SEO.” While this is a small part of what I do, I’ve found that it fascinates people – they tend to look at it as something of an enigma. “I’ve never understood search engine results” or “Google makes it all up anyways” are common responses, but the probing questions regarding SEO never stop there. Regardless of the industry you are in, search engine results are likely playing an increasingly important role in your company’s ability to be found by prospective customers and others interested in the products/services your business offers. As I’ve been receiving an increasing number of emails regarding SEO from Buildium customers, I figured I’d start by laying out some of the basic tried and true practices that can help your company rank more highly in search results. What exactly is SEO? According to Wikipedia, search engine optimization is the “process of improving the visibility of a website or web page in search engines via the ‘natural’ or unpaid search results.” In plain English, when you go to Google and run a search for anything, say “Boston Property Management,” it’s the process of improving how close ......
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Move In - Move Out Checklist (Part 1)

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA A vital part of reducing cost when managing a rental property is limiting the expenses associated with tenant turnover. Tenant turnover usually requires the rental property to be professionally cleaned, painted or touched up, and carpets cleaned or replaced. In order for you to know what expenses to absorb and what expenses to charge back to the tenant, you should always know the current condition of the property as well as the condition in which the property was given to the tenant. To accomplish this, each tenant should be provided with a written “Move-In/Move-Out” checklist. The “Move-In/Move-Out” checklist allows both parties to identify in writing the initial “Move-In” condition and the final “Move-out” condition of the property. These checklists will eliminate any misunderstandings regarding which party will pay for non-normal wear and tear repairs throughout the tenancy and upon move out. Prior to giving the keys to the tenant the owner should completely inspect the property and document the existing condition on the “Move-In” side of the checklist. It is necessary to document the condition of the appliances, windows, screens, blinds, doors, walls, lighting, flooring, a/c, heating, toilets, faucets, ceiling fans, and any other necessary interior and exterior areas. During the initial walk-through with the tenants, it is important to review the findings with the tenant and have the tenant sign and date the document. The use of a digital camera or video camera is also recommended upon both “Move-in”......
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The Security Deposit - How Much is Enough?

Security DepositBy Salvatore J. Friscia, San Diego Premier Property Management, San Diego, CA Every property owner should require tenants to issue a refundable security deposit which is held on file to insure against non-performance of the lease agreement. Non-performance may be, but is not limited to, anything from damages occurring during occupancy to expenses accrued due to the tenants conduct or failure to pay rent. The confusion begins with the property owner not knowing how much to require the tenant to issue for the security deposit. It is important to understand that security deposits for residential properties are controlled by statute and call for nondiscriminatory  and equal treatment. It is a prohibited discriminatory practice to charge a family a different amount then an applicant without children. It is also prohibited by law to require an excessive amount for the security deposit. In addition to collection of one month’s advanced rent, the maximum security deposit allowed (at least in the state of California) for an unfurnished unit is two months rent and three months rent for furnished properties. [California Civil Code 1950.5(c)] Check your local area laws for similar guidelines in your area. Many owners will ask for the first and last months rent along with the security deposit. This is allowed; unfortunately most renters are unable to afford twice the rent plus the security deposit upfront. Some owners will offer their property with a reduced security deposit. The owner will advertise the rental property at $1,000 monthly requiring a security deposit of $500, ......
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Strategies for Collecting Missed Rent Payments

Rent CollectionBy Peter Lamandre, Better by Design Realty, Scranton, PA What to do when a tenant doesn’t pay or skips? I don’t mean hop-scotch I mean what do you do when the tenant leaves the rental prior to the termination of their lease? The process can vary and depends upon the terms of the lease (if there is one). This post will provide some pointers on how to handle this less than ideal situation. I’ve always tried to be human with my tenants and recognize that sometimes good people fall on hard times. The most important thing to remember is not to make this too personal – it is business and whereas you can empathize with the situation you can’t allow that empathy to blind you to the fact that the non-payment hurts your business. Have a specific policy set for dealing with the delinquent accounts. Here is an example action plan for collection, which based on location and local laws may need to be modified (but I think you will get the idea). 20th of the month – statements go out for next month1st of the month – rent is due5th of the month – late fees begin7th of the month – collection calls/letters begin10th of the month – eviction notices are posted13th of the month – eviction filing begins The big picture here is you need to have a plan and follow it. But what do you do if the tenant wants to make payments? Again it is all about having a ......
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Should I Seek Restitution?

CourthouseBy Geoff Roberts, Buildium, Boston, MA Unfortunately, sometimes tenant-related situations happen that require you to consider restitution: a tenant submits a bad check; causes significant damage and destruction to your property; moves out on the sly; or abandons his possessions on your property, leaving you to clean up the mess. None of these situations are pleasant, particularly because they generally leave you at best out some cash and, even worse, with a mess to clean up in your tenants wake (which, of course, may require even more expenditure). Of course you want to be paid the money you’re owed, but is it always worth pursuing such matters? Let’s take a look at some common scenarios. Small Claims CourtSmall claims court may be a good option in certain circumstances (note that some districts have a specific landlord-tenant court). Small claims complaints may be viable if your tenant does not pay rent, willfully damages or causes destruction to your property, or violates rules and regulations repeatedly after written notice to comply. Generally speaking, small claims courts handle matters under a certain dollar amount—usually $5,000 or less. All of the specifics vary on according to state, so be sure to check the specifics in your area. In most states, you will have to submit a small fee to file a complaint (generally around $25). If the case goes to court, witnesses may be required to appear in person, and you should be prepared to provide relevant documentation, such as receipts, leases, estimates, bills, check copies, and photographs. ......
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Minimizing the Cost of Vacancy

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL As a professional property management company we have found that one of the most difficult concepts for rental property owners to grasp is the true cost of vacancy.  Investors who have been in the rental game for a while understand that in almost all cases the greatest expense they will experience over the life of their investment property will be the cost of vacancy due to lost rent and preparing the property between tenants.  100% of our managed properties have or will go through a vacancy and prep period.  Based upon our experience in managing this process literally thousands of times we provide the following advice to our property owners to help minimize the costs associated with turning around the property and to expedite the placement of a new tenant to begin collecting rental income again. Get started now.  The worst thing that can be done is to wait for any particular task to be completed before starting on the next.  The game plan should be in place the day the tenant vacates the property.  Vendors should be ready to come in and provide quotes, marketing efforts should be getting put into place, and a firm deadline for completion of the necessary clean-up/repairs should be determined. Get your utilities in order – Make sure your utility accounts are in order as soon as your tenant leaves.  Nothing is as frustrating as having the carpet cleaners or painters show up to an empty......
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Should I Allow Tenants to Make Unit Upgrades?

Every now and then, a tenant offers to make repairs to the unit he’s living in. Often, such offers are made in exchange for rent (in other words, the cost of the repairs is deducted from the monthly rental rate). In other instances, the tenant simply wants certain upgrades in his unit (a new paint job, removed carpet, etc.) and offers to do them himself. The argument for this is that the tenant can enjoy a place that “feels like home” and you reap the rewards of these upgrades once the tenant vacates the unit. Clearly, there can be benefits to this sort of situation: You receive property upgrades at a reduced (or negated) cost, and your tenant gets to customize the unit to his own preferences. Unfortunately, though, there can also be some pitfalls. All too often in these scenarios, tenants are not qualified to complete these upgrades or updates up to par. The result is unfinished or sub par work that ultimately becomes your responsibility to rectify. Not only this, but such deals can also result in sticky financial situations and—in extreme situations—legal problems. Let’s say that one of your long-time tenants wants to repaint his living room from the standard white all of your units are painted in to a more colorful rustic red. You agree that the color would suit the space well and tell your tenant can deduct the price of paint and labor from his next rent payment. When the first of the next month......
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