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Tenant Referral Programs -- Are They Worth It?

Let’s face it – keeping vacancy rates as low as possible is any property manager’s first priority. With the economy in its current state, this is truer than ever before.  We’ve written several articles in the past on combating a lousy rental market with strategies like lease renewal incentives and cross-promoting with local businesses. This week we are offering just another tool aimed at keeping vacancy rates low – a tenant referral program. Tenant Referral Incentives – How Much is Enough? By far the most common type of tenant referral program involves offering current tenants a monetary incentive to refer a new friend, family member, or colleague to their community – the current tenant is then paid for their referral when the referred tenant signs a lease.  Although monetary incentives can come in all sizes, one of the most commonly used programs offers $100 per tenant successfully referred. It’s important to note that if you go the monetary route, incentives should match your tenant demographic – we recommend starting with an incentive that is about 20% of one month’s rent. That being said, some of the most successful referral programs actually occur in more high-end properties. A wealthy person in a high-end property may be more motivated to refer a friend for a $1000 incentive than a less well-off person would be for a $100 incentive. Get Creative with Your Program You know your property better than anybody else. In order to achieve the highest adoption of your tenant referral program,......
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5 Things you can do right NOW to drive more leads

Wow..been a while since I've posted.  Yes.. I know all of you have been devastated by that.  (Bill who?)   Since my last post (the end of May) we have  successfully rolled out RentSentinel, LevelOne,  Online Payment Portal (Custom made), and      our online applications (custom made).  One  thing that can be said about AIM is that it sure  ramped up my motivational level.  But I digress.  That isn't why you're here.  Here are 5 things you  can do right NOW to get yourself some more  phone calls and emails. 1) Craigslist, Craigslist, Craigslist  If you aren't using craigslist or don't have a gameplan in place, then you are missing out.  Craigslist is our number one source for leads.  I am not sure I can explain its allure (I mean seriously...it's very ugly) but it works.  Period.  As I said above we use RentSentinel to drive our ads.  You don't have to do that (although it's recommended; the analytics are excellent), you can just simply post.  But post ... and post often. Postlets, and SmileBox are two good sites which provide templates and are free.  Here on the east coast we have found that a barebones, template-less ad works best.  It's up to you to figure out what is best where you are.  2) Clean up those ILS's The assumption is that you're on them ... all of them.  Rent.com, ForRent.com, Apartmentguide.com are just to name a few.  If you're not on them.. GET ON THEM!  $350 for example is not a bad cost per......
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3 Questions to Ask Yourself Before Renovating

Determining when the time has come to do renovations on your rental property is a process that requires good judgment and a careful analysis of your goals. Depending upon your situation, renovation time may occur before you ever even move tenants into your property or, alternatively, it may be one of the final things you do before selling your investment property. Following are a few key questions to consider when contemplating a renovation. Would I want to live here myself?While you don’t have to outfit every rental you manage like a luxury penthouse complete with every amenity imaginable, it is important to make your rental units as comfortable and livable as possible for tenants. Upon purchasing a rental property (and every few years thereafter), look around your rental unit and ask yourself: Is this somewhere I would want to live? If the answer is no, it’s time to start taking a serious look around at what features could stand changes or improvements. The better condition your rental units are in, the more quality tenants you will attract. And the better quality tenants you attract, the better care they will take of your units. Good tenants are a key element to consistently maintaining the value of your rental property. How do I stack up with the competition?If you are looking to sell your investment property at any point in the near future, you should make yourself familiar with comparable properties in your area. In real estate, sale prices are determined in large......
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10 Tips to Higher Occupancy at Your Property

In today’s challenging market, finding new ways to increase your occupancy is on everyone’s mind.  Here are 10 ways you can increase your occupancy and look like a rock star. First, set a goal and make your progress visual.  Put a graph on the wall and update it weekly.  By making it visual you keep the issue top of mind to all of your staff, and will get everyone thinking about what can be done today to make a difference. Next, get everyone in the community involved.  It doesn’t matter what the job description is – everyone plays a part in increasing occupancy. Implement some type of lead tracking software.  There are a number of great providers – but until you can see where marketing is working and where it isn’t, you will have a hard time knowing where to put your time and energy. Pick up the phone.  I say it over and over.  It doesn’t do any good to spend tons of money on marketing if you don’t answer the phone.  If your staff doesn’t have the time, then outsource your leasing calls to a third party. Update your marketing content.  This includes things like pictures, ILS descriptions, and Craigslist ads. Focus on your message and stop trying to be everything to everyone.  Think about 2-3 things that set your property apart from the competition and apply your message to those benefits. Try lots of different things and keep what works.  I find some of the best ideas are......
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Realtors Turned Property Managers

Anyone who has made a career in real estate knows that the market is always changing. There’s no arguing the fact that real estate professionals must have the ability to accept that while there are times of feast, there are also times of famine. But even when buyers are hard to come by, opportunities for income generation exist. And one of those opportunities is property management. Adapting to change. It’s not news at this point: Over the past couple of years, the real estate market has taken a huge hit. With foreclosures running rampant, loan qualification processes that can be difficult at best, and severe job losses across the nation, successful real estate transactions have been hard to come by. Even successful transactions now require far more time and effort than they once did. While things are slowly beginning to turn around, the real estate market is cyclical — we will at some point see it dip again. This is why it’s so important for real estate agents to have a back-up plan when times get rough. Property management offers realtors a great way to remain in the field and put their skills to use, even when the market is down. Steady income. No matter what, people will always need shelter. Particularly during economic climates like that of the past couple years, home sales may go down, but renting goes up, with all of the displaced former home owners looking for new places to lay their heads. No matter what field......
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Maybe There's More than One Story in Rising Mid-Tier Apartment Demand

One of the most encouraging results seen in the country's apartment market during 2010's first half was a notable upturn in demand for middle-tier product. Previously, almost all the absorption occurring across the country was being captured at the very top end of the market, reflecting new completions moving through initial lease-up as well as high-end units attracting move-up renters via price cuts. Looking specifically at 1980s-generation developments, the middle of the product spectrum in most metros, occupancy across the nation as a whole climbed 2 percentage points during 2010's initial six months, improving from 91.7 percent to 93.7 percent. At least a little bit of growth occurred virtually everywhere, and the jump was more than 3 percentage points in select areas like Upstate South Carolina's Greenville area, San Antonio, Kansas City and Nashville. An especially interesting shift in 1980s-era apartment occupancy registered during recent months in metro Atlanta. While those units were just 91.3 percent occupied as of mid-2010, the performance in the sector improved by 2.9 percentage points from the late 2009 result. Making the change especially intriguing, almost all the upturn occurred in just a few neighborhoods, specifically the arc stretching from Gwinnett County across the Roswell/Alpharetta area and into eastern Cobb County. That's a cluster of product that on the surface would seem to face a particularly difficult road to recovery, since it lies amid a huge selection of now really, really cheap single-family homes offered both for sale and for lease in very large numbers. What......
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Dealing with (and Preventing!) Bad Neighbors

Dealing with bad tenants can be tricky enough—though such scenarios are not ideal, at least you have a contract on your side to dictate certain rules and behaviors that ensure the comfort of all your tenants. But what happens in a case involving bad neighbors, when you don’t have the benefit of a pre-existing agreement on your side? Depending on the set-up of your property, a bad neighbor can potentially be just as disruptive (or perhaps even more so) than uncourteous tenants in your own property. Following are some suggestions to help mitigate this sort of scenario. Consider neighbors when property hunting.Time and time again in this blog, we’ve highlighted the importance of doing extremely thorough research when seeking out an investment property. And guess what? We’re about to dole that same information out once again. With so many other factors to take into consideration when selecting a property, evaluating potential neighbors is one of those things that all to often falls by the wayside. But on a day-to-day basis, your property’s neighbor can have a considerable impact on your tenants’ quality of living. And if that impact is a negative one, you may very well find yourself with high turnover or an undesirable vacancy rate. So, with this in mind, taking neighbors into account is a consideration when purchasing a property.Visit your potential property at various times of the day to see if there are any red flags (be sure to do this at times when neighbors are likely to be home, such as weeknights ......
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Baltimore's Apartment Market Performance Beats Neighboring DC's Results

While metro Washington, DC seems to rank at the top of the list of just about everyone's favorite apartment markets, current performance stats actually are a little stronger in adjacent Baltimore. June's occupancy rate in Baltimore's base of about 190,000 apartments stood at an even 96 percent, up 2.1 percentage points from the late 2009 figure and 0.7 points ahead of occupancy in Washington, DC. Neighborhood-level occupancy was right around the 95 percent mark in even the weakest of Baltimore's individual submarkets, and the rate was 97 percent or better in Ellicott City/Columbia and the Towson area. Effective rents in metro Baltimore jumped by 4.2 percent during 2010's initial six months, measuring change on a same-store basis. Since rents only backtracked a very tiny bit previously, growth during the first half of this year has already more than made up the ground that had been lost. Baltimore's current average monthly rent of $1,107, then, is an all-time high. Viewed in the big picture, Baltimore is one of the first local apartment markets where recovery from the recent down cycle is complete. It wouldn't be surprising if Baltimore's performance premium over the stats posted in Washington, DC actually gets a little more pronounced over the next couple of years. The DC metro is going to have to deal with processing more new supply, which likely will have some impact on the occupancy and rent growth performance potential at the top of the market there.   Statistical information presented in this post i......
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While Improving, Jacksonville Remains a Challenged Apartment Market

Just like pretty much every other metro across the country, Jacksonville has seen its apartment market generate some performance momentum so far during 2010. However, this locale took one of the nation's worst beatings during the down portion of the market cycle, so it remains far from reaching healthy status once again. Apartment absorption in Jacksonville registered at some 2,900 units during 2010's initial six months, far surpassing completions limited to around 500 apartments. Occupancy, then, has made big strides, rising 3 full percentage points since late 2009. Even with that upturn, however, the June occupancy figure was only 89.3 percent. That's the third worst reading across the 64 metros that form the core of MPF Research's national apartment analysis, coming in just ahead of the rates in Houston and Fort Myers. With overall occupancy so low, it's not surprising that even the top-performing neighborhoods and product niches are struggling. The metro's best neighborhood-level result in submarkets with sizable apartment inventories is the 92.8 percent occupancy in the Mandarin area. Across the various product categories, 1990s-era properties are doing the best with occupancy at 92.5 percent. Apartment operators in Jacksonville actually raised effective rents by a significant 2.7 percent during 2010's 2nd quarter, measuring change on a same-store basis. That's an aggressive move for a place with occupancy still so low. But even with that quarterly bump, rents haven't made much progress in making up the ground lost previously. From peak to trough in this market, effective pricing declined about 13......
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The Fair Housing Act and You

The Fair Housing Act (FHA) exists to ensure that all potential tenants are given an equal opportunity to obtain residency. This anti-discrimination policy means that, as a landlord, you are not allowed to base tenancy at your property upon any of the following factors, including: age, race, color, religion, familial status, or handicap. This law is straightforward enough; however, there are certain common instances in which landlords find themselves inadvertently in violation of this act. A common slip-up that can potentially lead to legal troubles down the line is searching for a certain “type” of tenant based upon your property’s location, amenities, or general pre-existing demographic. Consider the following scenario.  As clearly stated in the FHA, you cannot base your decision upon whether or not to accept a tenant on their situation or life circumstances. For example, even if you prefer to rent to students, you absolutely cannot refuse to rent an available unit to a family of three simply because they are a family rather than a single student. Remember, though, the average tenant wants to find a living situation that is comfortable for them. In the above scenario, for example, if you have a ten-unit complex that is primarily occupied by students, chances are other students (as opposed to families or young professionals) are going to be most enticed by your property. To achieve maximum visibility among this target demographic, you should place advertisements in outlets that cater to the university population in your area—school-affiliated publications, websites and bulletin boards at local college ......
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