Inside Santana Row’s newest luxury apartments

One of the community rooms at Misora, which includes a pool table. Click above to see more.

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Want fancy digs in Santana Row? The high-end retail/entertainment hub’s newest apartment complex is coming on line.

Misora’s first phase opens this October, with full completion of all 212 units this January.

Many of the smaller studios are already preleased, a spokeswoman told me.

Misora comes with plenty of high-end perks (which you can see in the slideshow). Those include a concierge in the entry lobby, a chef’s demonstration table with stove and bar, a pool and grill, a small community theater, a conference room and wine lockers for residents (with temperature control, of course).

Studios start in the mid-$2,000s, and a three-story penthouse will rent for about $10,000.

The project started in January of 2012 and wraps up January 2014. Counting Misora, Santana Row will boast 615 rentals and 219 privately owned homes.

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Independent Research: The Age Of Customer Obsession Has Arrived

Integrated WCM/CXM technologies are best equipped to deliver rich customer experiences

Staying competitive in the age of the customer calls for organizations to know what their customers want and then to make sure they get it—every time. But marketing and IT still struggle to deliver exceptional customer experiences. A commissioned study conducted by Forrester Consulting on behalf of e-Spirit, “Climbing the Digital Experience Maturity Ladder Through An Integrated Technology Approach” describes why:

Companies struggle to embrace the proliferation of channels (e.g. Web, print, mobile, smart TVs, etc); implement tools that are IT-centric instead of marketing-centric; sit on a mountain of data and content that isn’t managed properly; and use siloed rather than integrated technology solutions to support customer experiences. With all of these challenges, organizations can no longer sustain these manually intensive processes. They need better solutions to properly create, deliver, and measure customer experiences in a timely and cost-effective manner.

The paper discusses how enterprises can embrace a more holistic and integrated CXM approach to better support rich, contextual, and multichannel experiences.
>>> Free Download Forrester Whitepaper

Optimizing Your Property Management Facebook Page for Search

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While you shouldn’t focus all of your efforts solely on Facebook, it does make sense to optimize the content posted on your property management Facebook page. Facebook search is linked to keywords within all public posts, profiles, pages, groups and applications but very few are utilizing this opportunity to increase their Facebook SEO (search engine optimization). Facebook, as a referring site, is a major source of traffic to websites. They strive to base results on relevance to the user, which is why they implemented Open Graph. The more information collected from external websites the more useful Facebook search will become.

The most important place to show up within Facebook search is the auto-complete box. The auto-complete box ranks the following pieces of information within a search first:

  • Your name
  • Events you are invited to
  • Friends with keywords within their names
  • Second degree friends (friends of friends) with keywords within their names
  • Questions with keywords
  • Applications you’ve used
  • Groups you’ve joined
  • Pages you have liked
  • Pages related to your interests
  • Pages a friend likes, including number of friends that like the page and total likes of the page

Here are six tips to help you reach the top eight results within the auto-complete box.

  1. Pick your page name and vanity URL wisely. Pick something that adequately represents your brand and that will be easily remembered.
  2. Use keywords in the “about” box and the “overview” section of the info tab. Completing these are very important because the information contained within the text is visible in Facebook search.
  3. Keep your Facebook content relevant and fresh. Automatically feed new blog posts to your Facebook wall. Use keywords within status updates, links, photo’s, video’s, and notes.
  4. Use a custom landing tab on your Facebook page to shape user experience, provide useful information, and implement a clear call to action to become a fan of the page. Utilize keywords within the text, images and links on these custom tabs.
  5. Add the Like button to your website. It is one of the most important social sharing opportunities for driving visibility and linking. The more links to your Facebook page, the better your page will rank in search results.
  6. Last, but most importantly, use the Open Graph API on your website to enable Facebook users to find your website within their search results. When you add Open Graph to your webpages, Facebook categorizes each page and customizes your listing within search results. This is the fastest way to appear closer to the top of Facebook’s search results today.

Not only should you utilize Facebook SEO tactics to increase web traffic and drive sales, but consider it an opportunity to protect your brand name on Facebook by appearing in the search results above fake pages or even ILS ads that frequently appear above a community name during search.

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Increase In Cash-Centric Renters

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Have you noticed fewer tenants wanting to pay rent in ways other than good old checks or direct withdrawal? You’re not alone, and it’s not just a trend in your area. The fact is, adults in more than 24 million U.S. households — one in five — are “un-banked,” with no bank account, or “under-banked,” with adults conducting some or all of their financial transactions outside of the mainstream banking system. The U.S. government’s FDIC (Federal Deposit Insurance Corporation) discovered these surprising numbers in its 2011 Economic Inclusion survey. They reported 8.2 percent of adults in U.S. households being unbanked reflects a significant increase from the FDIC’s previous 2009 study. Since that time, banks have become less essential and, the study reports, simply less desirable.

Understand who and where unbanked and underbanked adults tend to live, and you’ll have some valuable insight for planning your payment choices and marketing.

The 2011 FDIC report rolls up a few key trends:

  • Location: In the South a full 10 percent of the population is unbanked or underbanked. The West is second highest, where one in five (21.0 percent) are unbanked or underbanked.
  • Ethnicity: The study reports 55.3 percent of black households, 48.7 percent of Hispanics, and 41.3 percent of American Indians are unbanked or underbanked.
  • Income: Lower earners may simply not save enough to make an account worthwhile, given minimum balance fees. About 28 percent of households with annual income below $15,000 are less likely to have bank accounts.
  • Age: Younger consumers are more likely to handle their money outside of the traditional banking system than older people, perhaps as using banks is the norm or they have amassed more savings. In fact, about 34 percent of people 34 or younger are unbanked or underbanked.

How to Cash In On the Underbanked and Unbanked Trends
Just as consumers can tap into a new world of cash management options, so can property managers. Here are the pros and cons of a few non-bank payment options you might offer:

  • Money orders or cashier’s checks through services like MoneyGram and Western Union are especially useful for property management companies without a local office. On the downside, property managers have to contend with getting the checks deposited.
  • Offering a cash payment option at a convenience store through a service like PayNearMe  gives the tenant peace of mind with a receipt showing the amount they have paid.  Modern web-based property management software solutions (like AppFolio) integrate with PayNearMe making this type of cash transaction very simple for the property management company and the tenant – the property manager receives instant notification of the payment, and the money direct deposits into the property’s bank account.
  • Online rental payments via electronic bank charge (ACH) or credit card are another option. However, the under-banked population typically doesn’t have access to either of these payment methods.

Thinking, “Hey, where’s cash on the list?” It didn’t make the cut! Ironically cash is just too expensive. Consider that a property manager needs to be on hand to accept the cash payments, then safely store the money, manually record it an accounting system, and securely make bank deposits. On top of all this, banks may charge for you to deposit the cash. Being on hand to accept cash rent means longer leasing office hours, more time spent accepting payments and less time spent being able to rent open units and maintain the property.

Serving the Unbanked Serves Your Bottom Line
Here’s a short checklist to simplify evaluating new payment options:

  1. Schedule flexibility: Understand how much time you can dedicate to processing the new payment methods. Simulate a run-through of your process for accepting the rent with each method to find any time sinks.
  2. Ease of payment: The fewer barriers and steps for tenants to get you the rent, the fewer times you’ll hear late-payment excuses.
  3. Evidence of payment: Cash should be delivered in person and only when someone is on hand to receive the money. Be sure to give the tenant a receipt.
  4. Secure way to manage and deposit the receipts: Your goal should be to minimize opportunities for theft or fraud and cut down the time to deposit the rents.
  5. Overall cost effectiveness: Sum up both the “hard” costs and time to handle and process the payments as part of your evaluation.

As you can see, cash as a payment option fails most of these points!

The bottom line is if you do hear more requests for paying rent in cash, keep your ultimate goal in mind: more and easier net revenue from your properties. Offering a menu of payment options is step number one toward this goal.

If you need more details to back up your plans, data hounds will love the detailed charts and breakdowns on the FDIC survey website.

Investment Properties Save Money on Income Tax

by  in Business

People frequently purchase investment real estate with the belief that they will save some money on their income taxes as a result of their property ownership. And this could be true, but in many cases real estate provides an owner with virtually no tax savings at all. In this article we’ll talk about rental properties and how you can figure out, with your tax advisor, if your real estate ownership will assist you to reduce your annual tax bill.

1040 Form
All annual personal income tax reporting ends with an individual filling out their two page IRS 1040 main tax form. In order to reduce one’s taxes as much as is legally allowed, taxpayers use deductions and losses to reduce their starting 1040 Form “Gross Income” to the lowest “Taxable Income” possible near the bottom of the 1040 form. One of those deductions or “losses” that helps reduce or shield your taxable income is related to real estate rental property operations that are calculated on the schedule E form and flow to your 1040 Form line 17.

Schedule E Mechanics
A rental property owner will fill out their Schedule E with all the property’s income and expense items for the year. The top number is the rental income, then they subtract expenses like maintenance, property taxes, insurance, mortgage interest, and depreciation. If the net number is a loss – which is common for the first bunch of years after a property is acquired – that loss generally goes onto the 1040 Form line 17 and is a reduction of one’s personal income.  That reduction flows through their entire 1040 form to reduce their taxable income and hence reduces the amount of taxes one would pay Uncle Sam.

And that’s how real estate saves you money on taxes; by allowing you to take a rental property deduction to reduce your gross income by the amount of any losses you incur on your real estate ownership. If you have a ($10,000) loss, you can shield $10,000 worth of your income from taxation which could save you $2,500 to $4,500 that year!

Limitations
Hold on though, guess what, there are some restrictions that the IRS enacted years ago to limit wealthy people from taking too much of an advantage of these tax saving measures.

These restrictions are generally called passive activity loss (PAL) limitations and most investors’ rental property operations are “passive activities” under the IRS code. The first PAL limitation restricts the maximum allowed net PAL that an individual can use to ($25,000) per year. So if one has a loss of ($35,000), they can use ($25,000) but have to carry the extra ($10,000) forward, probably for years, until it can be used down the road within the annual ($25,000) limit. Additionally, the ability to use any losses at all phases out as an investor’s Adjusted Gross Income (AGI) goes from $100,000 to $150,000 – at which point they can’t use the losses at all in the current year and would need to carry them over, possibly for decades, until their income drops below those levels.

So if you have huge losses, and/or your AGI is over $150,000 you’re probably out of luck on using significant losses to shield your income from taxation – discuss with your tax professional.

One last quirk in this law is that if the property owner is a real estate professional, check the tax code for qualifications, the ($25,000) PAL limitation might not apply. Now you might think that real estate professionals would be savvy enough investors to buy properties that don’t have huge tax losses, but I see investors do the darnedest things all the time! For yourself, try to buy good cash flow positive properties first, and then you won’t come up upon those PAL limits because your losses should be relatively small.

To summarize, if you are going to buy rental properties, and you are counting on the tax benefits to help your investment returns, make sure to get with your tax advisor beforehand to look at your entire tax picture. This will hopefully ensure you will actually earn some tax savings due to your real estate ownership; because, as with everything in real estate, tax savings are not as simple as just buying and assuming everything will work out to your favor!

Leasing Specifics Property Managers Need to Know

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Completing a leasing agreement with your tenants is the single most important task that you will undertake.  While completing a lease has likely become second nature to most property management professionals, you may want to take a little extra time and think about everything that needs to be in that lease; before it’s presented to your future tenants.  Here are a few things that property managers should make sure are included in any lease agreement:

  • Detailed information about monthly rent. While this may seem fairly straightforward, you will want to spell out the specific rent terms such as payment due date, grace period, if any, late charge amounts due after a specific date, and payment form accepted.
  • Legal entry to the unit or residence. It’s vital that a tenant lease spells out when unit entry is permissible. This includes how much of a notice is necessary (typically 24 hours), and under what circumstances. Obviously this clause can be overlooked during an emergency, but that exception should be noted as well. Bottom line is that it’s best to spell out exactly when you can enter the unit in order to avoid tenant complaints and potential litigation.
  • Consequences of illegal activity. While we all hope that our tenant screening process will weed out the possibility of illegal activity among tenants, it’s in the property manager’s best interest to spell out prohibited activities and the consequences. Stating that you have the grounds to terminate a lease upon evidence of illegal activity such as drug dealing will notify tenants of the consequences of illegal activity and allow you to start eviction proceedings promptly.
  • A detailed list of maintenance responsibilities. If your rentals are mainly single family homes, it’s vital that details on what tenants are responsible for are spelled out in the lease agreement. If your tenants are responsible for lawn maintenance and landscaping, it needs to be put in writing. If management prohibits major changes to property such as painting walls or installing a ceiling fan, it needs to be spelled out in detail.
  • Detailed information about security, cleaning, and pet deposits. Are tenants allowed to use their security deposit for their last month of rent? If not, it better say that in the lease. Do you charge a separate pet deposit, and is it refundable? Again, spell out the terms in the lease. Cleaning deposits? Non-refundable? Better mention that in the lease.

Taking the time to present a comprehensive lease agreement will likely result in less confusion for tenants and reduce the possibility of litigation later.

Brandywine Homes to Break Ground on Calif. Community

By Jessica Fiur, News Editor

Buena Park, Calif.—Though it usually concentrates on single-family homes, Brandywine Homes recently closed escrow on a multifamily community in Buena Park, Calif.

The 22-unit community will include two-bedroom single-level apartments and two-story townhouses and will be located on 1.1 acres. The units, which will be designed by LSA Architecture, will include granite countertops, as well as washers and dryers. Amenities will include a tot lot and barbecue area.

The community will be located near the 91 and 5 Freeways. It will also be close to The Source, a 450,000-square-foot shopping center that is currently under construction. Additionally, the property will be close to Knott’s Berry Farm, Soak City, the Buena Park Downtown shopping center and Dad Miller Golf Courses.

“With the economy improving, the demand for rental properties is stronger than it has been in years,” David Barisic, vice president of sales and marketing for Brandywine Homes, says. “People who’ve been living with relatives or friends still may be reluctant to buy. But, increasingly, they’re looking for their own place to rent.”

Brandywine Homes has plans to build three additional multifamily communities in the coming year. It recently broke ground on two communities in Garden Grove: a 25-unit property and a 34-unit property, both of which include townhouses and apartments.

Construction of the Buena Park community is expected to be completed by the summer of 2014.