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Your Insider's Look: The Laundry RFP

Greetings Gentle Readers! Typically when a property owner or manager needs a laundry proposal for their multifamily asset they contact a laundry company and ask for a “proposal” without giving the operator specific, if any,  guidelines in which they are interested.   And, usually when asked by the laundry vendor what the property wants to see in a proposal, the response is all too often a vague and less than strategic response: “Just give me your best deal”.    That response, unfortunately, is a nonstarter for a laundry vendor and leaves way too many options for the laundry vendor who sadly doesn’t have any idea what the property’s “best deal” looks like.   Too often neither does the property and it can result in multiple proposals, revisions, lost time and energy and missed opportunities for both counter parties. Let me give you an analogy that might help make the point.   1.      If I were to go looking for a roofing contractor, I would know at least 3 things, conceivably more, that are critical to my decision process.  In no particular order those might be: reputation, timeline for job and price.  I might also know that I prefer composite to tile and that I want 8 nails not just 6...all those are preferences that begin to outline my request. And it provides the contractors bidding the job a solid understanding of what I want.   2.      What I’m saying is the property owner/manager who knows at least three things, hopefully more, is in a better position......
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An inside look at laundry revenue (commissions)

Greetings Gentle Readers! Today's topic is one that is of some concern to multifamily apartment owners currently in a laundry lease or thinking about signing a laundry lease. "Commissions" is a colloquial term used by laundry vendors and property owners alike but in reality "commissions" are legally "RENT" for the space the machines occupy. Typically the property will receive a percentage of the gross revenue (collections) that the machines generate from usage by the residents on the property and in some cases off property usage. How that percentage is computed can be confusing.  There are 3 very broad categories of RENT payments that are computed and made typically monthly. First let's look at what some variables the laundry vendor will input to calculate any type of RENT payment. Capital investment (buying the machines and providing technology payment systems if suitable)  Operating expenses (installing, servicing, collection, processing, insurance, vent cleaning, etc., etc) Term of the lease (Typically, 5, 7 or 10 years) Contingency Risk (Occupancy, market risks, competition from in unit hook up) Revenue (collections) from historical performance over the past 12 - 18 months Condition of the property (new construction or existing) Class of Property (A, B, C, D) In unit connections Vend prices Competing laundromats in the area # of Machines Vandalism risks Type of Machines (front load or top load) Quality of Machines (Factory New or from Inventory)   Once those variables are collected and input the commission or RENT payments can be determined by the laundry vendor's software program. ​And, as I......
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The Top 10 Reasons a Leasing Professional Quits

A few weeks ago Suzanne Hopson asked a great question on the Multifamily ShareSpace - What do you think the top reasons are that leasing professionals quit? 

There were so many great responses that I decided to showcase my personal top 10 favorite comments for why leasing consultants walk out the door.  Enjoy, and feel free to add any additional in the comments!

Recent Comments
Guest — Anne Sadovsky
Lots of smart replies! The 'nowhere to move up', 'salespersons don't always make good managers' and 'having to work weekends' and... Read More
Monday, 18 February 2019 10:03
Brent Williams
I am a HUGE fan of this idea, Anne!
Monday, 18 February 2019 12:35
Guest — Beth Tody
All of the reasons mentioned above basically sum it all up. When I see the title "Leasing Professional", a question comes to mind.... Read More
Wednesday, 27 February 2019 19:30
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The Impact of Company Culture

Throughout virtually every industry, companies regularly tout the merits of a strong company culture. While it’s true that the presence of a flourishing culture is a common facet of many successful businesses, precisely what that label entails is somewhat abstract.   Without context, the term “culture” can seem a bit generic. But those who work amidst that dynamic undoubtedly understand that a positive workplace vibe can strengthen the daily performance of team members and increase the efficiency of the company as a whole. According to Gallup, companies with above-average levels of employee engagement enjoy 147 percent more earnings per share.   On the surface, a strong company culture refers to a happy workplace where the employees like one another and little disconnect can be found between departments. But it’s a lot more than that, and it’s built over time. Various methods can be utilized to enhance company culture – offsite team-builder events, fostering team collaboration in the workplace, empowering and trusting team members, incentives, etc. – and if a company is able to achieve it, the benefits are widespread.   Better Morale There are people who love their job and those who go to work to collect a paycheck. Those working alongside a healthy, thriving company culture generally fall into the former category. The workday is much more brisk and fulfilling when you’re happy, and equally importantly, around happy people. A negative company culture can drain the life from employees while an upbeat vibe creates higher-performing associates. Fortune regularly ranks the 100 best compa......
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Important Paragraphs to Look For in a Laundry Room Lease

Greetings Gentle Readers!  Important Disclosure: I am not a real estate attorney and I only offer my anecdotal and work experience in the informational blogs I write.  Should any legal question arise from your readings please consult with your in house counsel or locate an attorney for a legal opinion.  I'm happy to give my opinion/response which is business based and not grounded in real estate law.  Here's a quick "laundry list" of lease paragraphs...this is not all inclusive as each lease may be modified and negotiated by both counter parties....but it should suffice to kick start a discussion.... Firstly, Keep in mind that the laundry vendors have written the leases they prefer to use and generally it's written to their benefit but if you read the leases carefully you'll find there are areas that are negotiable and non negotiable.   Not all laundry vendors use the same format, language and clauses so don't assume one lease is like another.   Preamble -  identifies Lessor (property) and Lessee (laundry vendor) - includes date of execution & lessor description and address,     A typical lease will include number of apt. units and identifies number of units with connections (if applicable)  - keep in mind that if you have in-unit connections for washes and dryers you present competition for the laundry room resulting in possibly reduced usage and reduced revenue.  Laundry vendors will want to know how many in unit connections are in play at lease execution.  That is a known risk.   Furthermore there will be......
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How to Deal with Automatic Renewals in Laundry Leases...

Greetings Gentle Readers,  Disclosure:  I am not an attorney and any advice given here is purely from an anecdotal and  personal experience basis and should not be construed as legal advice.  Before taking any action against a laundry company, including recommendations included herein, please consult with your counsel.    Today's post deals with a recurring problem with which many property managers and owners suffer...the sudden realization that your property has a lease with an "Automatic Renewal" clause that may have been overlooked or forgotten.   If you are in the late hours of a laundry lease and the non renewal notice period has expired there is not much one can do.  However, this suggested practice is, IMHO, good advice for any property manager at any given time...find and review your laundry lease. 1st Step:  Review your lease and focus on finding out if it contains an "automatic renewal" clause - if it does then ensure you understand the "non-renewal" notification requirements.  For example, one lease may stipulate the "non-renewal" notice can only be sent no sooner than 180 days prior to expiration and no later than 90 days prior to expiration...another lease may stipulate that the "non-renewal" notice can only be sent during the first month of the final year (which is not January BTW it's the first month of the anniversary of the expiration...i.e. June 18, 2021 expiration = July 2020 notice requirement). 2nd Step:  Once you determine the "non-renewal" notice send a registered, return receipt letter to the laundry company's......
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Brent Williams
Enjoying your posts, Michael. What are the common elements of a laundry lease agreement, and what should companies consider when ... Read More
Thursday, 31 January 2019 08:56
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Laundry Room Deals: Bonus or Cash Flow?

As usual the answer is: “Depends”...    First off, “bonus” money in a laundry room lease is the most commonly used phrase and generally the most misunderstood.  The word “Bonus” implies “Free” but bonus money in a laundry lease is far from free. “Well, where does it come from?”  The upfront money a manager or owner takes out of a laundry deal comes from their share of the cash flow, pure and simple.   The laundry company, once it gets a “bogey” or target amount that is requested from the property, simply carves that out of the share of revenue the property would get otherwise.  Then, using a “Net Present Value” factor the laundry company can convert that cash flow to a one-time payment up front.  And, from an insider’s POV, the discount is deep.  Laundry companies are not in the lending business. One example: Let’s say your property has 40 machines in total installed in 4 laundry rooms and they are generating about $4,000 a month in gross collections from coin, credit/debit or Add Value Station.  And let’s further say your property is a solid B and the owner is not looking to flip the property over the next 7 years and furthermore there is no need for renovations…If that were the case, the focus should be on increasing cash flow by not taking any “bonus”.  Depending on the capital investment and labor considerations, including risk and contingency issues, your laundry company may offer you a 50% deal with $XX dollars versus a 58% deal with no money up fron......
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The Kindness ROI

The Kindness ROI
There's no line item in the budget for practicing kindness throughout your company. But doing so creates a powerful ripple effect that ultimately has a significant benefit to the bottom line. For starters, kindness paves the way for happier, less stressed and more productive team members. According to information from Darthmouth College, those who regularly practice kindness experience a wide array of health benefits: more energy, increased levels of happiness, less anxiety, healthier blood pressure, significantly lower amounts of cortisol (the stress hormone) and longer lifespans.   Along those same lines, organizational development specialist Dan Schwartz advises workers to "be kind to your fellow employees and commit random acts of kindness to decrease stress in the workplace and increase productivity." When associates are healthier and less stressed, they are more likely to become long-term employees, which saves on the often-considerable expense of hiring and training new team members. And healthy, engaged associates lead to satisfied residents who are more apt to renew their leases. In my 23+ years of working with multifamily executives, leasing teams and supplier partners, here are some of the important things I've learned about kindness and the apartment industry. Everyone has a hand in creating a culture of kindnessEveryone is responsible for creating a culture of kindness, from the ownership group and investors to the executive leadership and onsite property teams.   Company executives and onsite team members need to practice kindness and courtesy in all of their interactions with employees. Treat each other – as well as residents a......
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5 Inexpensive Makeover Tips to Put Your Leasing Space on Top of the List

image9.jpgHaving property is a good way of having an excellent income for the long-run, but sometimes that same leasing space won’t get you much unless you renovate from time to time. Properties that don’t receive a makeover regularly will be less attractive and will be more difficult to lease, and you’ll thus lose money. You can avoid this by doing some renovations or making changes that will cause the space to become more desirable. However, this can be quite costly, which is why we have prepared a list of tips for you to avoid unnecessary costs, and manage to make some effective makeovers for very little money. Clean Everything Cleaning is always the best way to make anything look good and appealing. Besides, it’s probably the cheapest option as well. You can easily do it yourself, or hire someone at a small expense. What you must remember though is that cleaning both the interior and exterior is essential – all of it together will have a significant effect on the desirability of your property. Give it a Paint Job A simple paint job is always a necessary makeover if you want your leasing space to be at the top of the list. It’s inexpensive and easy as the previous tip, and it’s sometimes enough to merely paint the areas that look bad and the areas where people will spend most of their time. Don’t forget the front door as that’s the first thing most people will see before entering the place. Improve the......
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Pros and Cons of Leasing a Fully Furnished Flat

Property owners usually face a dilemma – to lease a fully furnished suite or an unfurnished one? Which one is better? There’s no easy answer here. We’ve found that it’s best to consider the merits of one of the two – the fully furnished one. It’s always best to decide whether something is good or not by making a list of its good and bad sides. We will give you all the pros and cons of leasing a fully furnished residence, so you can get a clearer picture and decide if that’s the way you should go. The Price Some might think that the price is a negative for fully furnished apartments – as it’s expensive to equip an entire rental for your tenants. However, they are not looking at the bigger picture: fully furnished rooms will yield a higher rent making it a better long-term investment. Naturally, the price will differ from city to city, but the overall picture is clear – fully furnished always bring higher rent. Changing Tenants More Often Furnished units are usually rented by people who are only looking to stay somewhere temporarily. It usually means that your tenant turnover will be high. However, this is not necessarily the case. Some people are looking for long-term furnished rentals. Although, changing your tenants often is good for some landlords, as they get the chance to make upgrades to modify the price before getting a new tenant. Higher Deposits It depends on the state, but based on whether or not an apartment......
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