Property Management 2.0

Tips on how to fill apartment vacancies: Tip #4 – Market Neighborhood Businesses

Is the property that you manage or own located within a few miles of a shopping mall, retail store (think: Wal-Mart), grocery store or large restaurant?  If so, then you have a very easy way to potentially garner new tenants who have stable incomes and are vouched for by their employer.  Here is how to do it:

1)      Visit the local business and ask to speak with the general manager.

2)      When the manager arrives, tell him/her that you represent a local apartment community, located at <insert address> and would like to offer rental discounts to his employees.  Ask the manager if you can return at a certain day/time and drop off a few fliers for the break room.  Here is an example of a flyer that our property management company put together: Sample Neighborhood Marketing Brochure

3)      If the manager agrees, return on the elected day and time with simple printed flyers advertising the address, contact phone number, apartment types, amenities, rental price and in BIG letters: the discount offered to the employees of <insert business name here>.

4)      Hand the brochures to the same manager that you spoke with a few days previous.  This is VERY important as you want to continue to foster your new business relationship.  At this time, you will also want to explain the types of incentives that your property management company offers to the business owners for referring employees.

5)      Smile and walk confidently out of the store – your work here is complete.

Does your property management company or landlord have a Neighborhood Marketing Program?  What succeses have you had with local business marketing?

Click here for Tip #3: Offer a Touring Gift

The American Apartment Owners Association posted an article on their blog that brings up a very relevant point in regards to leasing policies: bad policies can lead to bad tenants.  We, as landlords, must set the standard from the beginning when engaging resident-prospects.  If we are lazy with our reference checks, credit checks, rental history checks and eviction checks – we just might find that our new tenant becomes lazy with his/her rent check….  Experience dictates that it is much more cost effective to thoroughly screen a prospect up front than it is to have to evict at the end.

What policy does your property management company maintain to insure that it sets itself up to find the best renters possible? -Trevor

Leasing Policies That Attract Bad Tenants

By the AAOA

If  you’ve had to file an eviction, or find that you have more than your fair share of problems with tenants, it may be because you are sending the wrong message.

Your leasing policies can set the stage for problems.  Take a moment and get inside a tenant’s head. What would you do if you’ve burned your previous landlord, but you need a new place to rent?  Chances are, you will look for a new landlord who appears laid-back, like a part-timer who doesn’t have much experience.  How do you spot such a target? It is easier than you think.

Rental ads don’t just highlight a property–they tell a lot about the landlord.

If you want to dissuade bad tenants from applying for your vacancy, then make certain that your rental ads look professional.  With today’s technology, it is easy to create a crisp, clear ad.  Include the price, the size, a floor plan, and flattering photos or a video tour.  The tone of the ad should convey that you are proud of this property. Throw in some rental rules and let the prospect know you will be screening.  The very appearance of the ad can be enough to scare off bad candidates.

Do not negotiate with an applicant on terms of the lease before they have seen the place and you have determined that they qualify. Nothing says “pushover” like your willingness to break your own rules before the applicant has done any work.  You must appear confident in your terms at this stage.

Review your rental application and make sure you are asking for a lot of information. While it may take a prospect a long time to fill it out, that’s actually a good thing. They will take you more seriously, and only interested candidates will apply. On the other hand, it only takes a few minutes to read the application, so the more information the better.

Do not consider an applicant who has not filled out every portion of the rental application and signed the bottom. If multiple occupants will be moving in, have each adult complete a rental application and sign it. If any portion of the application is illegible, make the applicant clarify.

Check the references from the application before you offer the applicant a lease. Too often, landlords wait until there is a problem before contacting the previous landlord to swap stories about how they both got burned.

Make sure your lease form is ironclad before you provide it to the tenant, and that you understand the meaning of each provision in case the applicant tries to negotiate with you.  At this stage, there may be room for some minor negotiations.  Expect it, and be clear on your bottom line.

The tenant must sign the lease for it to be effective. Provide them with a copy, or an easily accessible list of rules so that they can stay on track.

Don’t just drop out of sight after the tenant moves in.  You should be inspecting the property from time to time, after providing the appropriate notice.  Find other ways to keep in touch, like an email newsletter.

I have received a considerable feedback from Property Management 2.0’s readers requesting more information on the new SB 150 Home Owners Association (HOA) law in California that came into effect Janaury 1^st, 2012.  To help answer questions in regards to this new CA law, I have included an excerpt from community association attorneys, Swedelson & Gottlieb’s that may help explain this new law:

“Following are two pertinent points about the application of SB 150 to California common interest developments:

1. This new legislation does not apply to all rental restrictions. For example, it does not apply to a rental restriction that prohibits an owner from leasing his/her unit/lot for a term less than one year, that the lease be in writing, or a restriction requiring that the lease contain language that the tenant agrees to abide by the association’s governing documents. The bill does apply to restrictions recorded on or after January 1, 2012 that prohibit leasing of a unit or lot, such as a restriction that sets a cap on the number or percentage of units that may be leased at any one time, or a restriction requiring a waiting period after purchase before an owner may rent his/her unit or lot.

2. The bill does not nullify all limits on leasing that are recorded on or after January 1, 2012. For example, if an association records an amendment to its CC&Rs establishing a 25% limit on leased units/lots on or after January 1, 2012, only new owners that purchase their properties after the effective date of that amendment would be subject to the 25% limit; existing owners would not be subject to the restriction. [This example would likely create a tracking burden for an association, as theoretically all existing owners could lease their units, but only new owners would be subject to the rental cap.]

If an association’s board of directors is considering proposing a rental restriction that affects the ability of owners to lease their units, the board should present that proposal for vote and record the corresponding CC&R amendment (assuming it is approved by the owners, and, if applicable, mortgagees) no later than December 31, 2011 to have a rental cap restriction that will be enforceable against all owners.”

Full Article

For a full analysis of the SB 150 Bill by the California State Government: leginfo.ca.gov…

DISCLAIMER: This post is for informational purposes only.  I am certainly not an attorney – please seek professional legal advice before taking any action. -Trevor

This past year was very strong for the apartment industry here in California as well as for most other parts of the U.S.   Our company’s portfolio of apartments, HOA’s and single-family-homes saw an increase in average rent; increase in occupancy levels; and a fair amount of new acquisitions.  Will 2012 continue to lead owners, investors and property managers in this positive growth direction?  Jay Parsons and Greg Willet of Property Management Insider most certainly agree that this year will be another successful year for the apartment industry.

In their video edition of Apartment Market Dynamics, Mr. Parsons and Mr. Willet discuss a set of forecasts that should make most of us in #multifamily smile:

In regards to national apartment occupancy levels:

• Growth of up to half a percentage point
• Look for growth in Class B and Class C properties
• Top end market essentially full

National rent growth of 4 – 4.5%

What are your predictions for 2012?  Is multifamily entering into another prosperous year?  Happy new year to you all,   _Trevor

With every New Year comes a new set of laws and regulations for landlords and property managers.  Below is a short list of what we consider to be some of the most important statutes that will affect the multifamily industry in few short weeks.  Thank you our friends at Kimball, Tirey & St. John for creating and publishing this for the benefit of us all.  The original document can be found here.  Have a prosperous 2012! -Trevor

Legal News for 2012

By J. Kathleen Belville, Esq.

CALIFORNIA LAW

Signs: Beginning in January 2012, residents may post political signs of up to 6 square feet in the window or on the door of a multifamily unit and in some other outside areas on single-family properties. Landlords can set time restrictions, requiring that the signs not be displayed earlier than 90 days before, or later than 15 days after, a vote to which the sign refers.

Recycling: Starting in July 2012, landlords of properties with 5 or more units must provide recycling services and require participation by residents. This will not apply if the property is not served by recycling companies, there is no space for containers on-site or the program would constitute a financial hardship on the landlord. (Several cities have passed recycling legislation which could further affect a landlord’s duties).

Smoking: Effective January 1, 2012, California law provides that a landlord has the right, but not the duty, to establish smoking restrictions in all or part of a residential property. This right applies to leases “entered into” on or after the effective date of the law. Any new smoking restrictions applied to lease renewals, or month-to-month agreements entered into prior to January 1st must be made in compliance with state law. (Numerous cities have passed legislation requiring that landlords establish smoking restrictions. Landlords should make sure they are aware of, and are complying with, any local restrictions).

Carbon monoxide detectors: Single-family properties with fossil fuel burning appliances, heaters, fireplaces or with an attached garage must now be equipped with a carbon monoxide detector. Multi-family properties will be required to have detectors by January 1, 2013.

Water conservation: For properties built before January 1, 1994, single family residences must contain water-conserving fixtures by 2017 and multi-family residences must contain such fixtures by 2019.

HOA restrictions on rentals: As of January 1, 2012, there will be more restrictions on a homeowner association’s attempts to restrict owners from renting their units.

FEDERAL LAWS AND REGULATIONS

Labor relations signs: Effective January 31, 2012, most employers must post an “11X17” sign outlining employee rights unless such posting is not physically feasible, in which case the employee should be provided a hard copy of the notice. If a hard copy is provided, the employee should sign an acknowledgment of receipt. If employers post policies on-line, a link to the notice should be included. See www.nlrb.gov/poster for more information.

Red flags: Creditors are required to establish and apply written policies and procedures for 1) identifying “red flags” which could lead to identity theft and 2) protecting against such fraudulent practices. Pursuant to a 2010 amendment, landlords are included in the definition of creditors for the purposes of the application of this law.

DISCLAIMER:  I am not a lawyer nor do I claim to be one.  This blog post is for general information only and legal council should be sought before any action is taken. -Trevor