How Independent Apartment Owners Can Increase Income
by Michelle N. on 6/28/2017 3:53:00 PM
Independent owners can maximize income and value using similar tools to their institutional counterparts'. Here are some suggestions from the National Apartment Association's recent Education Conference.
by Chris Nebenzahl | Jun 28, 2017
While much of the focus at large multifamily conferences often revolves around new, high-rise, class-A properties, a series of panels at the recent National Apartment Association’s annual education conference concentrated on independent owners and how they can maximize income and value using similar tools to their institutional counterparts’.
From small improvement tips, to large-scale unit remodels, to best practices for protecting your assets from insurance claims, the Independent Rental Owners sessions provided key insight for apartment entrepreneurs from experienced industry professionals.
Reducing Energy Consumption
Many independently owned units fall into the all-bills-paid category, which differs from large institutional owners who tend to pass off utility responsibility to their renters. Since the landlord is responsible for paying the utilities in an all-bills-paid unit, a quick and easy money saving technique is to manage utility output. Utility benchmarking is a helpful practice, as you can develop a standard for utility usage and then monitor your building’s performance over time. Using a benchmarking system can allow you to target specific utilities and optimize consumption practices. Installing LED light bulbs and updating appliances to meet energy efficient standards are also common practices among independent owners, as well as updating sprinkler systems with smart sensors and timers that track weather patterns and adjust watering accordingly to help cut back on excess water use.
Charge for items you don’t normally include
Depending on geography, some household amenities are expected as part of the lease, while others are not. If refrigerators or washers and dryers are not expected in your units, consider adding them and increasing the rent. According to Karla Ross of Bob Ross Realty, simply adding a refrigerator to a unit can increase monthly rent by upwards of $50 in certain locations. A high-quality, refurbished refrigerator that costs $550-600 with a three- to five-year lifespan can be paid back in roughly one year. The excess cash flow goes straight into your pocket.
Taking the amenity package a step further, Ross recommends analyzing the effects of fully furnishing your units and renting them out as corporate or short-term rentals. Furnished apartments can sometimes go for double the asking rent of an unfurnished apartment. While volatility in occupancy may increase with short-term or corporate rentals, the additional cash flow can often offset or exceed the cost to maintain the unit.
Are your amenities still in high demand?
Many independent owners maintain portfolios of older stock, and while it’s common to update the interior of buildings and units, often the exterior is overlooked. Does your property have a courtyard or basketball court that are rarely used? Would adding a walkway or changing the color of a fence improve the use of outdoor space? Victoria Cowart of Darby Development Co. recognizes significant value in reconfiguring unused space into more attractive shared areas like dog parks or outdoor entertainment areas with grills and fire pits. As resident desires change, modifying and improving your communal space can improve your curb appeal significantly.
Enhance Communication with Technology
Online portals and mobile apps are no longer unique to large owners with significant technology budgets. As Tim Hurley of Highland Commercial Properties explained, it is now simple to create mobile apps using public platforms such as Google Forms. Apps can allow owners to communicate with residents to handle customer service requests and inspections, or contact vendors and service providers to maintain contracts. As technology becomes paramount in the industry, independent owners can stay current with simple and basic mobile app communication.
Make sure your contractors and vendors carry the appropriate insurance coverage
Having the right insurance in today’s market goes beyond carrying the right policy on your property. It is important to ensure that anyone coming onto your property, whether it is a resident, vendor or service provider, maintains their own insurance to limit your liability. Lonnie Derden of Enterprise Risk Control explained that service workers who are injured while working at your property can file a worker’s compensation claim against you if their companies don’t maintain adequate coverage. This can lead to rising premiums for property insurance and can be easily avoided if you verify proof of insurance when signing contracts with your vendors.
Renter’s insurance is also a key way to avoid paying insurance claims if something were to happen on your property. Some owners are even providing renter’s insurance to all residents, and including the cost in the rent. Property claims can get very expensive and affect your ability to maintain insurance going forward. If the claim is minimally more expensive than your deductible, it may be wise to pay for the repairs out of pocket, rather than filing a claim, which will impact your insurance rates for the long-run. A quick check of proof of insurance for renters and vendors is an easy way to insure you don’t end up paying avoidable insurance claims.
While independent owners often do not have the capital available to institutional owners, they remain competitive by taking advantage of small improvement projects, providing amenities residents use and desire, and ensuring all people entering their properties are adequately covered for liability purposes.
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Internet/Wi-Fi Products Are Tops for Resident Experience
by Michelle N. on 6/27/2017 1:54:02 PM
Internet- and Wi-Fi–connected products top the list of next-gen products that have the most impact on the resident experience, according to an exclusive MFE survey of multifamily professionals, with 83.5% of respondents rating the products as having a "high impact" on tenant satisfaction. The digital products beat out a host of other items, including lighting, flooring, appliances, and windows and doors. Also highly ranked were security and door locks, utility management, and HVAC systems.
Next-gen building and construction products, in contrast, scored very low among survey participants, who said such products have a relatively low or no impact on the resident experience. Specifically, respondents cited framing, both wood and nonwood, as having the least impact, followed by modular construction and drywall.
The study responses were part of a survey conducted by The Farnsworth Group, our data partner on the 2017 MFE Concept Community, examining usage and perceptions regarding next-gen building performance. This year’s survey received online responses from 159 multifamily builders, developers, and architects.
Look for more tidbits and stats from the survey in the coming months prior to the annual Multifamily Executive Conference, which will be held Sept. 18–20 at the Bellagio in Las Vegas.
10 Ways to Improve Your Community’s NOI
by Michelle N. on 6/26/2017 12:48:10 PM
1. Curb Appeal is King! Curb appeal includes all the senses — sight, smell, taste, touch and hearing. Is the property perfectly landscaped and maintained? Is there soothing music and plush furniture in the office? Are great-smelling treats available for prospective residents — along with something tasty for their canine sidekicks? People notice these small details, and stick around to see more.
2. Amenities People Love AND Use. Major selling points include covered parking, fitness centers, play- grounds, dog parks, picnic tables, bocce ball courts and soccer fields. Choose amenities that get residents active onsite and engaging with each other.
3. Make Them Look Twice. Invest in upgrades: Modern touches such as new fixtures, hardware and ceiling fans empower you to increase both rents and occupancy. Whenever possible, replace carpet with vinyl plank flooring to cut down on move-out cleaning costs.
4. Increase Lease Rates/Lease Terms. You’re in a position to raise rates on new leases and renewals if your property’s occupancy is 96 percent or better, has a loss-to-lease of under 3 percent, and/or a gain-to- lease. You can also potentially increase your NOI by extending lease terms beyond the standard 12-month term. This tactic is particularly beneficial if improvements have been added that require a return on investment to meet the owner’s objectives.
5. Ancillary Income. Vending machines, laundry facilities, reserved parking, dog-washing stations and other services residents pay for can quickly boost your bottom line. Partnering with local dry cleaners, dog walkers and/or groomers can also provide extra revenue.
6. Minimize Turnover. Survey residents regularly and then act to address their concerns and work to keep them happy. When residents move out, they leave behind a very expensive list of to-dos.
7. Bid Out All Contracts. Get at least three estimates and go with the vendor that is both reasonably priced and has excellent referrals. Over the long haul, you’ll be glad you made your decision based on both criteria.
8. Save Energy and Water. Place aerators on your faucets, install water-saving toilets, put in low-flow showerheads and replace light bulbs with CFL or LEDs. Achieve HVAC savings through quarterly inspections and preventive maintenance, using smart thermostats and regularly changing air filters and cleaning the unit’s coils and pans.
9. Work Your Plan. Often, managers contract out expenses. First, think: Could you perform the task onsite for less? Does your team have a few hours a week for special projects in-house? Work your plan and plan to work. Every saved expense affects your target NOI.
10. Pay Attention to Details. Operators, regional managers, supervisors and asset managers should meet regularly to discuss rents, collections, leasing, marketing, renewals and rent growth lease-over-lease and renewal-over-renewal. This ensures everyone fully understands the asset’s business goals and target NOI—and knows the plan to achieve it.
Courtney Gaines, President CLEAR Property Management, Austin, Texas
Swimming Legend, Michael Phelps, is joining NAA's speaker line-up in Atlanta at the Education Conference.
by Michelle N. on 6/12/2017 1:18:00 PM
Phelps is the most decorated swimmer in history, capturing a total of 28 medals--including a record-setting 23 gold medals--during the course of his career. He has also established the Michael Phelps Foundation, launched his owned competitive swimwear brand and published two autobiographies and a children's book! With his reputation for steely calm, laser focus and racing toward his dreams, Phelps will truly inspire and impress!
Thursday, June 22 from 12:45 p.m. to 2:15 p.m.
Buyers Access Appoints New Vice President of Sales
by Michelle N. on 5/23/2017 2:22:00 PM
Denver, CO, May 23, 2017 – Buyers Access is pleased to announce the appointment of Kelly Scott as Vice President of Sales, effective June 5, 2017. In this new position, Kelly will be responsible for driving all sales growth initiatives for Buyers Access; and she brings with her more than 25 years of multifamily industry operations and sales experience. Kelly has extensive background in the oversight of lease ups, stabilized and rehab communities, budget maximization, developing staffing plans, and owner and equity partner relationship management. Prior to joining Buyers Access, Kelly worked as Vice President at Alliance Residential, and previously held leadership positions as President at Lane Company and Executive Vice President at TCR/Riverstone Residential Group.
“We are extremely excited and fortunate to have Kelly join the Buyers Access Team,” said Dan Haefner, President and CEO, Buyers Access. “Kelly’s accomplishments within the industry are exceptional, and she has an outstanding reputation when it comes to customer success and team building.”
“I’m excited to become part of such a great team, where I hope to add significant value to an already exceptional history of success. I am very eager to get started with this new chapter in my multifamily career,” said Kelly Scott, Vice President of Sales, Buyers Access.
Kelly holds CAM and CAPS designations, has served as chair of both the membership and education committees with the Houston Apartment Association, and has been the Education Conference Chairperson for the Texas Apartment Association. In 2016, Kelly was named Management Executive of the Year by the Houston Apartment Association (HAA). In addition, Kelly served on the HAA board of directors for over 10 years and is currently an officer with HAA, serving as the Secretary/Treasurer for 2017.
About Buyers Access
Buyers Access is the nation’s leading Purchasing and Cost Control specialist for the multifamily housing industry. We take an active role as your business partner, and provide full service solutions to help your business maximize the value of your real estate. Since 1986, Buyers Access has helped thousands of properties reduce their operating costs and become more efficient. Through the use of our operational expertise, these properties have added millions of dollars to their real estate value. For more information, contact Buyers Access at www.buyersaccess.com or call 1.800.445.9169
Director of Marketing
How to Win, and Keep, Renters Amid the Current Multifamily Landscape
by Michelle N. on 5/5/2017 2:39:00 PM
Three strategies to help drive leases and resident retention in a sea of competition.
At The Eleanor in Los Angeles, Trion Properties positioned several distinctive common areas throughout the property, including this graffiti-themed space,
which was designed to evoke the development's urban setting.
The multifamily sector has experienced tremendous growth and innovation over the past several years. Driven by strong resident demand, the market continues to see increased amounts of apartment construction throughout the country. As a result, the competition keeps intensifying, and multifamily owners constantly have to implement new and innovative strategies in order to differentiate themselves and attract and retain residents.
That challenge is even greater now because today’s residents aren’t just searching for a place to live, but are also seeking quality experiences that cater to a live/work/play lifestyle. And they’re willing to pay a premium for properties that deliver this type of environment. That said, with the rise in competition and the new-supply pipeline, many owner–operators are wondering how they can continue to set themselves apart and keep occupancies high.
Based on our decade of experience at Trion Properties in owning and managing multifamily communities along the West Coast, we’ve found three strategies that are especially effective in driving new leases and resident retention in today’s multifamily landscape.
Read about the three strategies here.
Credit: Multifamily Executive Magazine
Don't Let Them Bite Our Community
by Michelle N. on 4/27/2017 4:12:00 PM
What do bed bugs look like?
- Reddish-brown in color
- 3/16-inch long
- About the size of an apple seed
What should I look for?
They often leave behind tiny, rust-colored stains that have a syrup-like smell, similar to soda pop. Look for these telltale stains:
- On mattress tags and seams
- On ceilings
- Under seat cushions
- Behind headboards
- In tiny cracks and crevices
- Around light switches
Where should I look?
Bed bugs like to settle close to their food source –you. During the day, they don’t live in the bed, but often hide within a five-foot radius of the bed:
- Under mattresses
- Under bed frames
- Near baseboards
- Behind picture frames
- In night stands
- Under buckling wallpaper or carpet
- Areas with excessive heat or moisture
How can I help reduce the chance of bed bugs?
- Clear clutter, which makes bed bugs harder to find or treat.
- If you receive second-hand furniture, make sure you’re not getting bed bugs along with it by inspecting for the aforementioned signs.
- Do not bring discarded furniture into your residence – there’s a reason it was left by, or in, the dumpster.
- Inspect your luggage after traveling, and for an extra precaution, dry your clothes on high heat.
- Inspect your residence regularly – especially after move-in or trips.
What should I do if I think I have an infestation?
Notify your property manager immediately.
Win an Apple Watch at the TAA Lone Star Expo - Booth 536
by Michelle N. on 4/27/2017 1:04:00 PM
Need a Clear Path to Your Purchasing Goals?
by Michelle N. on 4/25/2017 3:17:00 PM
Why Your Building Should Tell a Story
by Michelle N. on 4/11/2017 3:59:00 PM
Marketing advice is rarely so singularly unhelpful as when it speaks in aspirational vagaries. In the property management world, “your building has to tell a story” is a common refrain. The thing is, this is actually good advice that is just packaged in an almost deliberately confusing way.
Let’s unpack it.
How can a building tell a story?
We aren’t talking Romeo & Juliette. The story that a building should tell is more like an elevator pitch. It should answer questions like, “what are the key advantages of the space?” or “what businesses is the building tailored to serve?” or even “what sort of employees would be happy working here?”
Having a strong story for your building can help prospective tenants to put the amenities and location of a building in context. This goes a long way toward helping themselves to imagine their business in the space and picture the relationship that they would have with the building. It may also help units in the building to command a higher price if prospective tenants place a premium on the features being highlighted.
For example, a building that is LEED-certified may appeal to tenants who understand the U.S. Green Building Council’s LEED rating system and place a value on it, but many will simply pass it by. However, by giving feature placement in your building’s marketing materials to several of the elements that are involved in LEED-certification and possibly making a few other small changes, a building can be marketed as a “green space.” Most renters have no problem understanding the merits of a green space and those that place a premium on these features may be willing to pay a premium for them.
The story that your building tells should be specific to its advantages and features, and as such, there are almost infinite stories a building could tell. Here are a few common stories that you may want to consider.
Read more here.