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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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Establishing Transfer Policies for Multi-unit Properties

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL Transfer policies are often a detail overlooked by landlords and property owners who own/manage multi-unit properties. A tenant requesting a move from one unit to another presents challenges and can add unnecessary and unexpected costs for property owners. Ignoring these requests or not addressing them properly can open landlords up to potential resentment from tenants and even legal liabilities if not properly documented. There are a lot of reasons why a tenant might request a transfer to another unit within the same property and there are positive and negative impacts resulting from this type of request. The most common reasons for these requests in my experience are: - Problems or issues with current neighbors - Maintenance issues within their current unit which they feel were not or will not be addressed - Lack of upgrades due to extended tenancy (newly remodeled units are obviously more desirable) - Preference regarding location within the property (different floor, closer to parking, amenities) - Moving from 1 unit type to another such as moving from a 1 bedroom apartment to a 2 bedroom Regardless of the tenant’s reason for the transfer request, there are both positive and negatives that you should consider. The positive: - Your tenant obviously likes the property enough to want to stay - You have a history with this tenant so you know what to expect regarding care for the property and rental payments. No surprises. That is always a positive. ......
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Development University; The Apartment Developer's Dilemma

In the same way that we recently considered the definition of ‘Developer’ (Who Am I; The Apartment Developer’s Dilemma), we must apply the same scrutiny to the purpose of the development firm, if we ever hope to fix our broken industry. As we begin the enquiry, ask yourself the question; what is the job of the development firm? Most of us would reply with some form of answer that would refer to building buildings or investing in and developing real estate. I would posit that those answers totally miss the mark. While each of those activities do occur within the development organization, the primary responsibility of the firm is really to create developers. The job of the developer, on the other hand, is to create and invest in buildings on behalf of the firm. It is really that simple. If we, the leaders of the next generation of real estate developers, hope to repair the shambles that our industry has become, then our firms must become ‘Schools for Development.’ What that means for the developer is that their job is going to have to change. So who must they become? Regardless of your religious affiliation (if any), you are probably familiar with a story in the Bible (Matthew 4:19) where Jesus was walking along the Sea of Galilee, when he came across Simon and Andrew. These two brothers were fishermen by trade, and were in the process of casting their nets into the sea. When Jesus approached them, he said that......
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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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Know Your Property Management Market Potential

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia I see too many property management businesses either fail completely or forever fail to achieve their targets for many and varying reasons. It’s important, just like in any business, to understand and know your market. In order to create your business plan and targets you must know the market size, potential, averages, statistics and demographics. In this particular blog I’ll focus on the critical role market potential and averages play in the success of your business. Mistakes continue to be made in the property management industry because business owners focus on numbers and not income. There are many critical factors that can make or break the success and profitability of an agency. By understanding critical factors you should then understand that by focusing on the number of properties under management, rather than the income, you are creating a ‘Frankenstein’ for yourself and your team, not to mention disastrous consumer relationships. To put it simply by focusing on properties under management you are focusing on quantity only. By measuring targets on income you are focusing on quality. It’s a classic “quality versus quantity” dilemma,  and quality always beats quantity. A quality agent attracts quality teams, which tend to attract quality property owners and their quality properties, who in turn attract quality tenants. Next thing you know you have yourself a quality business and a quality brand. QUALITY PLUS! Always remember – when you are tempted to focus on numbers of properties under management, when ......
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Dodd-Frank Bill Requires Adverse Action Letters

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA The property is ready to be occupied, marketing is complete, and now you are receiving multiple inquires. At the first showing you receive two applications and it looks as though you’ll fill the unit quickly but remember only one party can be offered the property and after you have evaluated both applications – pulling credit information, confirming employment status and reviewing past rental history – it is clear that only one party meets your qualifications. So is it as simple as offering the rental to the qualified party and just letting the other party know that they didn’t get the unit? Not so fast. As of July 21, 2011 the Dodd-Frank bill requires you to provide the consumer with a Score Disclosure letter or an Adverse Action letter if you decline their application or impose additional conditions (such as a higher deposit) in order to accept the application. This law was enacted toward creditors but does include “Property Managers” who deal with making decisions based on credit scores for potential tenants. According to the Fair Credit Reporting Act (FCRA) creditors are required to issue an adverse action notice containing the name of the credit reporting agency, notice of the consumer’s right to request a free credit report, and notice of the consumer’s right to dispute the accuracy of the report’s content. The Equal Credit Opportunity Act (ECOA) requires creditors to provide consumers with the specific reasons for a denial, o......
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Customer Service Isn’t Just Dead… It was MURDERED!

  I hate being reminded that general common courtesy (as well as common sense, a lot of the time) is just NOT common anymore. I’m left, after numerous interactions and transactions on a daily basis, scratching my head wondering where the service is. Is it just acceptable now to provide sub-par service? Is it OK to be rude to a customer? Is it just no longer a focus of companies to provide training for and more so, demand their employees provide good service? I’m truly beginning to wonder. Let me tell you about the kind of day I had… it started with Kohl’s department store. Many of you know that Paul and I are expecting our very first baby, Luke! We’ve had sort of a tumultuous pregnancy and after a scare we quickly realized we needed to start buying the essentials. On Sunday, I noticed that Kohl’s was having a sale… I also had a coupon for 20% off and free shipping (which ended that same day). While browsing their site I’d found several things we needed and promptly scooped them up (along with some savings). This morning, however, I’d received an email saying that they cancelled my order, with no further information. I was quickly frustrated. Not jumping to conclusions, I simply called the number on the email and discovered it was their fraud department. I was unsure why I was directed there, but none the less, I waited in the queue and finally spoke to a live person. I explained the......
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10 Tips To Be A Networking Powerhouse On Multifamily Insiders

I have seen people take their careers to new heights, establishing a nationwide reputation by taking advantage of the free tools on Multifamily Insiders, and I’ve also seen people flame out after two weeks.  If you follow even a good chunk of these ten tips, you will undoubtedly increase your reputation within the multifamily ranks!  Focus on others first and you will always come out ahead in the end.  Those new to networking often jump in too aggressively, using a sledgehammer to try to get their marketing message out there.  But instead of focusing on yourself, simply get to know people and focus on helping them do what they do.  If you can build relationships, it will be infinitely more powerful than simply throwing out your marketing pitch the first chance you get.   (Expert in this:  Jonathan Saar)  Fill out your profile completely.  This is FREE marketing about yourself!  When someone visits your page, which they will undoubtedly do, make sure they can get all your info.  Protip:  Make sure to add profile apps!  (Expert in this: Tara Furiani)Tip for bloggers:  "Claim" your MFI blog in Google Help where help is needed!  As we release features and try to grow existing ones, we always appreciate help from the members to get the ball rolling.  And when a member takes special initiative to help, such as in the File Bank, we always make sure to do what we can to return the favor.  So find an area of the site that needs......
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Tenants Have Legal Responsibilities Too

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA Recent posts have suggested onerous burdens and detailed obligations owed by landlords.  “What about the tenants?” you ask.  They have some responsibilities, too.  If a tenant in California does not adhere to these minimum requirements, a landlord may not be held responsible for failure to provide a tenant with a habitable residence – i.e. the bare necessities.  Let’s outline them here, ok? To successfully prosecute a claim against you for not providing those bare necessities, a tenant probably should be able to show that: He kept the unit clean and not unsanitary.  He cannot let it get dirtier than it was when he first started renting. He cannot abuse or misuse the plumbing, gas, or electric fixtures in the unit. He should prevent his guests from damaging the premises. He should make written requests of his landlord when he wants something in the unit fixed. When you come to fix it, he should not prevent you from doing so.  He should not put the chain lock on.  He should not refuse to let you come to fix it on reasonable notice. He should throw out his trash and garbage. If your standard lease agreement does not spell out some of these responsibilities, you might consult with your transactional attorney to see if such terms can or should be incorporated. Basic equity (and some statutes) provide that a tenant should inform you if he believes the premises are or have become uninhabitable.  Any ......
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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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