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The Most Wonderful Time of the Year; The Apartment Developer's Dilemma

Let me begin by wishing you all a very Merry Christmas and Happy Hanukkah. For those of you who regularly read my scribbles, you are used to some pretty meaty topics. In light of the Holidays, this one will be a bit frothier. In each blog that I write there are certain themes which remain pretty consistent. One of my favorites is that real estate development is about the coolest industry on the planet. After all, our job is to make the world a better, more usable, more beautiful place.   Often my intended audience is the real estate developer (my hope is of course that there is some part of my subject matter which translates to my non-developer audience- or at least helps you better understand those temperamental developers who constantly tell you ‘We can’t afford that.’). Today, I would like to remind us all of something that is very easily glossed over as we perform our day-to-day tasks.   No matter what our role in the industry, we have a hand in something very precious. Through our daily work (whether it is building, developing, leasing, managing or maintaining) we have a definite and real effect on people’s lives. We provide the backdrop in which our residents and neighbors work, play, rest, are made safe, fall in and out of love, have babies, spend their final years, argue and make-up, worship and congregate and pursue their individual goals. And while we don’t necessarily know which combination of these that they are ex......
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Fun Ideas for the Holidays at Your Apartment Community

With the holiday spirit all around, this is a great time of year to get your residents together and show them your appreciation.  Here are a couple fun ideas that you can do around your apartment community:   1.       Resident gifts:  A small gift for your residents is an easy way to say thank you for living in your community and the holidays are a great time to surprise them.  Order T-shirts or sustainable bags with your branding on them for each resident.  Print some festive notes to say Happy Holidays and put them in your resident mailboxes.  Each resident can use the note to redeem their gift from the leasing office.  This would also be a great time to have them update their contact information with you.  Your residents will love their new swag and your branding will be all over the city. 2.       A hot drink on a cold day:  The weather is getting colder (in Chicago at least) and everyone likes a nice warm drink on a bitter day.  Set up a table at the front gate or leasing office to hand out free coffee or hot chocolate for a day.  Make sure to promote the event, so residents don’t make their own cup that morning.  Everyone will start their day off right, thanks to you! 3.       Host a white elephant:  It can be hard to meet your neighbors, especially if you live in a large community.  Host a ‘Meet Your Neighbors White Elephant’ in your community room. ......
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Don't Forget The "In-Betweens"

I once knew a resident named Mrs. Marshall*.  She was the type of resident we all should be so lucky to have.  Mrs. Marshall acknowledged every birthday of everyone working in the office, attended all of our resident events, and was simply a joy to have in the community.  Not to mention, she also made us the most amazing rum-soaked walnuts at Christmastime.   I also remember Mrs. Kensington*.  She was the one who always sent letters to our corporate office criticizing our performance, deliberately took up two parking spaces for her car and failed to pick up after her precious Shih Tzu.  In addition, she rarely paid her rent on time and always expected and demanded that her late fees be waived.   Why is it that we always remember the extremes?  You know…either the really pleasant or the really not so pleasant residents?  Ask any property management professional to recall their most favorite and most difficult residents and they will answer without hesitation.  Harder to recall in most instances, are those that are only seen at move-in and move out.  They are the residents who usually put their rent checks in the drop box or pay online.  They also request service in a one minute phone call or a short and sweet email.  These are the residents I like to refer to as the “In-Betweens”.   The In-Betweens make up the bulk of our resident base, yet are seldom seen as the value-added commodities they are.  These residents, if......
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MISSING: Residents! REWARD: $$, Higher Occupancy, Better Word of Mouth!

Are your residents vanishing from your community at a rate that makes you consider putting up "missing" posters? If so, did you know that their disappearance was probably preventable? Before you contact the milk carton company, let me explain… We do an awful lot of training and spend so much money on advertising our communities to get them in the door…  but once they’re in, it’s like we change our focus to who’s next. To me, that’s utterly absurd and honestly… it’s quite expensive. ·         According to research data provided by Satisfacts, the average cost to “lose” a resident is around $4,000. Now, this can of course vary… but the least I’ve EVER seen is around $2,000… still a pretty good chunk of change and too much, in my opinion (and I'd wager that it's too much for any owner as well). What can we do differently? Well… how about providing the same level of service to current residents as we do to prospective ones? We wouldn’t dream of not following up after someone toured with us (called us, emailed us, etc…) so why are we so bad at following up after the move-in? Doing that allows us to temperature check (something I am very passionate about when I train sales) the now current resident; with regard to the move-in process, condition of the apartment, etc… setting us up, right off the bat, for a successful residency. BUT, it doesn’t stop there… inevitably; there will be a maintenance issue. How ......
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Bonuses and Incentives in the Real Estate Industry: Striking Accord

BonusBy Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Are you in a position to create your own bonus and incentive plan that strategically builds your business, not just your property manager’s pocket? Successful bonus and incentive plans are all about understanding your team at an individual level, your agency’s business plan, and your market area. So, this week, let’s take a look at how understanding these critical factors converts to a bonus and incentive plan where all parties- the team member, property owner and you, the business owner- win now and win in the long-term. What happens if, for instance, the average weekly rent in your market area is $300 and the property manager has a target of five new managements per month? The property manager could in fact reach the target of five new managements, but the five properties average only $200 per week. The problem – the property manager’s focus is on numbers and not quality. What happens if the agency then increases its weekly rent on leased properties to $1000? On management fees of eight percent, this would equate to $80 per week extra income for the agency. If the incentive is a bonus equivalent to one week’s rent for each new management (which seems to be the norm bonus in most businesses), the business owner will pay $1000 as a bonus to the property manager or business development manager. Rewarding the property manager for every management, regardless of the target, only encourages the property manager to secure whatever business th......
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'Tis the Season to Lock Your Backdoor

Your current residents remember the special treatment they received when they first walked in your front door.  They were greeted with a smile, from a standing position, and referred to by name.  They were offered refreshments, given a personal tour, along with your undivided attention.  Over the years, some of that begins to fade.     Retaining your residents is always an important piece of a community’s success and probably most crucial during the holiday season.  Move-outs occurring during the months of November through January tend to remain vacant longer due to the drop in traffic around this time.  With so much focus placed on getting new residents in the front door, who at your community is watching the back door?   This is a great time for an all-out retention blitz!  Here are some ideas you can build on to remind your residents that your community is the only place for them:   November – “A Month of Thanks” ·      Send thank you cards to every resident.  Have the entire team sign each card.  If you are at a larger community, this may be quite a task however think of the impact it will have on your residents when they realize you took the time to do so. ·      Host a thank you brunch.  Invite your residents to join you and the entire team for a continental breakfast.  Be sure to remind your team to mingle with the residents and not huddle together in the corner of the room.  December –......
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Your Landlord's Duty to Prevent Criminal Acts

Buildium property management softwareBy Colin McCarthy, J.D., Robinson & Wood, San Jose, CA Over the last few posts, we’ve discussed premises liability, landlord duties, and obvious dangers, among other things. Today we’ll discuss an issue in California that gets people excited - a landlord’s duty to prevent criminal acts. Nothing gets people more excited than the idea that a landlord might have an affirmative duty to prevent or intervene in the actions of a third party to prevent a person on his or her property from becoming the victim of a crime. On the face of it, this duty feels like it falls outside the scope of a landlord’s duties. Isn’t that the job of the police? A property owner can’t be a substitute for the police and common sense, the argument goes. That may be true, but if we rely on common negligence principles – and California courts do – then liability can attach in certain circumstances for failure to take steps to mitigate against such third party criminal conduct. The owner/lessor/occupier/person who controls the property has a “general duty [which] includes not only the duty to inspect the premises in order to uncover dangerous conditions, but, as well, the duty to take affirmative action to control the wrongful acts of third persons which threaten [persons on the property] where [he] has reasonable cause to anticipate such acts and the probability of injury resulting therefrom.”* The key to attaching liability is the part about having “reasonable cause to anticipate” the criminal activity and the li......
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Bonuses and Incentives in the Real Estate Industry – Understanding Win/Win/Win Formulas

IncentiveBy Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Salary incentive and bonus plans have to work for both parties. But, even more importantly, real estate agency principals need to understand what they are aiming to achieve in offering incentives to the team. The vast majority of bonus and incentive plans don’t achieve their aim of increasing business profits. Why? Because they focus solely on management numbers. However, increased management numbers don’t equate to increased income and profits. On the contrary, they result in increased overheads, overall net losses in management, and low team morale. Clearly, the focus is all wrong! The good news is that there is a solution and it is as simple as understanding math. It is common practice to remunerate property managers or business development managers (a title I do not agree with) for new management once the property has been leased as their incentive to build and grow management numbers. This bonus is usually equivalent to a full week’s rent on the new management, depending on your area of practice. This means that the business is not earning any income on this management other than the management fee until the property is actually re-rented (at which point a new rent fee is usually charged to the property owner under normal circumstances). Sadly, a large proportion of managements never make it to being re-rented, as incentives are not focused around retention of business. Consequently, managements are often lost within the first 12 months as clients feel frustrated when they rea......
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Fun Halloween Ideas for Your Apartment Community

Can you believe it’s October already?  The leaves are changing, Pumpkin Spice Lattes are back and Halloween costume stores are popping up around the country.  Like other holidays, this is a great time for you to have some fun around your apartment community!  Here are some ideas to get your residents together for a spooky, good time:   1.       Lobby candy – If you have a large apartment community, it can be difficult or even impossible for trick-or-treaters to ring your residents’ doorbells.  Instead of disappointing all those little Ghosts, Sarah Palins and Hippies ask your residents to donate a bag of candy for the lobby.  Have your security guard or leasing agents greet the trick-or-treaters and hand out candy on behalf of the entire building.   2.       Scary movies – A lot of people love watching scary movies around Halloween or, if you’re like me, you prefer flicks like Hocus Pocus.  Visit a local used DVD store and stock up on classic Halloween and scary movies for both adults and children.  For the month of October, offer these DVDs for rent from your leasing office.  You can either charge a dollar for the night or ask that your residents bring a canned good to donate in exchange for the rental.  This is a great way to encourage people to have a fun night in at your apartment community.   3.       Used costume swap – Most people don’t want to spend money on a Halloween costume, so try hosting a used......
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14 Steps Towards Zero Resident Turnover

Mark Juleen mentioned a few weeks ago how there will always be resident turnover at some point, so it got me thinking:  What would be the steps to approach zero resident turnover?  Obviously, zero resident turnover is not actually possible, but if we set our goal at the best possible outcome, we are more likely to get farther along than if we try to barely move the needle.  So let’s have some fun brainstorming how to move the dial towards zero resident turnover! Stop Pushing Residents Out The Door 1)      Customer Service and Maintenance – This is obviously step #1.  If your residents have lingering maintenance requests, or if your customer service is not up to par, then you will easily drive them from your community. 2)      Long-term Lease Contracts – Creating alternatives to the standard one-year lease that mitigate concerns over achieving rent increases.  Why do we constantly make our residents re-evaluate their living situation year after year? 3)      Apply Concessions Immediately – Obviously concessions are not recommended, but if they must be given, have it applied immediately to first months of lease.  Therefore, the lease renewal isn’t coupled with a large increase in rent purely because of the concession expiring. 4)      Release the Bad Apples – With your residents consolidated in such a small area, it is easy for one nuisance neighbor to make life miserable for several others, such as noise disturbances, trash, and other issues.  Instead of placating these bad residents, we need to have good solutions to actually en......
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