How to Attract Quality Tenants

by  –

Even when your communities are 100% occupied, as a property manager, you’re always looking for quality tenants. While it’s a challenge to attract tenants any time, finding those tenants and leasing apartments or homes in the first quarter of the year can be particularly challenging.

But there are ways to attract quality tenants, any time of year. One way that we’ll explore in this two-part blog is to hold an open house. We’ll look at additional ways to attract tenants in a later post.

Used by realtors almost exclusively, the idea of an open house may seem fairly strange to property managers. But the premise of attracting a high number of visitors, including potential tenants can be an excellent marketing strategy that costs little but can pay high dividends. Consider what an open house can bring to your property:

· It will likely attract a large number of visitors to your property. While it’s true that not all of those visitors will be in the market for a rental home at this time, it opens the door for future rental opportunities.
· Remember, prospective tenants may be curious about what an apartment community has to offer, but don’t want to formally view an apartment and fill out an application. However, an open house gives them the opportunity to view apartment homes, pressure free.
· Have a ‘for more information’ sign-up sheet for those interested in the apartment community. Once the open house is complete, leasing agents can follow up with those that indicated interest.
· The tell-your-friend component can work to your advantage. Entertaining those that have no intention of moving into your apartment community can pay off – particularly if they’re impressed enough to tell their friends. Make sure they’re impressed.
· It builds neighborhood collaboration. It’s likely that area business owners and residents will attend your open house, just to see what your property has to offer. Building collaborations with those neighbors can go a long way towards also building your pool of applicants.
· Provide attendees with an incentive to return as an applicant. Create flyers or cards that can be redeemed if they return to the community as an applicant. These can range from a gift card to $50.00 off their first month’s rent.

While an unusual approach to leasing, holding an open house can prove to be beneficial, and can be held throughout the year if desired.

How to Attract Quality Tenants

by  –

Even when your communities are 100% occupied, as a property manager, you’re always looking for quality tenants. While it’s a challenge to attract tenants any time, finding those tenants and leasing apartments or homes in the first quarter of the year can be particularly challenging.

But there are ways to attract quality tenants, any time of year. One way that we’ll explore in this two-part blog is to hold an open house. We’ll look at additional ways to attract tenants in a later post.

Used by realtors almost exclusively, the idea of an open house may seem fairly strange to property managers. But the premise of attracting a high number of visitors, including potential tenants can be an excellent marketing strategy that costs little but can pay high dividends. Consider what an open house can bring to your property:

· It will likely attract a large number of visitors to your property. While it’s true that not all of those visitors will be in the market for a rental home at this time, it opens the door for future rental opportunities.
· Remember, prospective tenants may be curious about what an apartment community has to offer, but don’t want to formally view an apartment and fill out an application. However, an open house gives them the opportunity to view apartment homes, pressure free.
· Have a ‘for more information’ sign-up sheet for those interested in the apartment community. Once the open house is complete, leasing agents can follow up with those that indicated interest.
· The tell-your-friend component can work to your advantage. Entertaining those that have no intention of moving into your apartment community can pay off – particularly if they’re impressed enough to tell their friends. Make sure they’re impressed.
· It builds neighborhood collaboration. It’s likely that area business owners and residents will attend your open house, just to see what your property has to offer. Building collaborations with those neighbors can go a long way towards also building your pool of applicants.
· Provide attendees with an incentive to return as an applicant. Create flyers or cards that can be redeemed if they return to the community as an applicant. These can range from a gift card to $50.00 off their first month’s rent.

While an unusual approach to leasing, holding an open house can prove to be beneficial, and can be held throughout the year if desired.

Bill would provide funding to eliminate old, wood stoves

In California, many air districts fail to meet federal health standards for fine particulate matter, of which wood smoke is a significant source. According to the U.S. Environmental Protection Agency, changing out one old, dirty, inefficient wood stove removes as much pollution as removing five old diesel buses from the road.

This year, SB 563 by Sen. Ricardo Lara, D-Bell Gardens, proposes to establish the Wood Smoke Reduction Program, which would include funding to replace old, wood stoves. The California Air Resources Board would administer the program in coordination with local air districts.

SB 563 would offer consumers incentives to replace old, uncertified wood-burning stoves with cleaner, more energy-efficient alternatives, helping reduce greenhouse gas emissions from wood smoke.

CURRENT LOCAL AIR DISTRICT REGULATIONS

Many local air districts now prohibit use of wood-burning devices on “spare the air” days, and some encourage their replacement through limited rebate programs. Generally, properties that have no other source of heat are exempt from “spare the air” days. For a map of all air districts with links to local requirements and programs, click here.

CAA’s “Spare the Air Addendum” (Form 37.0), which spells out compliance duties of tenants, should be used in all air districts.

At this time, only the Bay Area Air Quality Management District requires rental property owners to install alternative sources of heat on properties that rely on wood-burning devices. However, other air districts are likely to follow suit. The Bay Area Air Quality Management District requires all rental properties in “natural gas service areas” to have “a permanently installed source of heat that does not burn wood” by Nov. 1, 2018. On that date, those properties will no longer be exempt from no burn,  “spare the air days.”

The boundaries of the Bay Area district include all of the following counties: Napa, Contra Costa, Alameda, Santa Clara, San Mateo, San Francisco and Marin, and part of Solano and Sonoma counties. The district also requires landlords to provide tenants in units with fireplaces or wood-burning devices with a disclosure regarding the health hazards associated with wood smoke.

More information regarding the Bay Area Air Quality Management District’s rules, including a compliance-assistance hotline, is available here.

CAA’s Residential Fireplace Disclosure Addendum (Form 37.0-BA) contains the notice that must be provided to tenants within the district.

Hearings set for bills that would restrict landlords’ ability to exit business

The Legislature has scheduled hearings this month on a pair of bills that target the Ellis Act, landmark legislation that protects a property owner’s right to exit the rental housing business.

The Ellis Act, passed in 1985, provides an important safety valve for landlords operating in rent controlled jurisdictions.

Before the Ellis Act in 1985, cities could force landlords to continue renting out their properties, even if they were losing money. Preserving the Ellis Act is particularly important today, as some lawmakers are attempting to bring back extreme versions of rent control and take away exemptions for newer apartment buildings.

The bills in question, AB 423 by Assemblyman Rob Bonta, D-Oakland, and AB 982by Assemblyman Richmond Bloom, D-Santa Monica, are scheduled for hearings in the Housing and Community Development Committee on April 5 and April 19, respectively.

AB 423 would exempt residential hotels in Oakland from the Ellis Act, prohibiting them from closing their buildings. Already exempted are San Francisco, Los Angeles, and San Diego.

In a letter to Bonta, the California Apartment Association and allied groups object to requiring owners of residential hotels in Oakland to stay in business despite business hardships or the inability to meet future code mandates for capital improvements.

“We have witnessed owners in these situations struggle with fire sprinkler installations, seismic safety upgrades and other retrofits that are mandated for older housing,” the letter says. “Unless the city can provide funding to assist, we anticipate some of these buildings will struggle to keep the building viable for tenants.”

The other proposal, AB 982, would expand the number of tenants who are entitled to receive a year’s notice from the landlord before the landlord closes the building as allowed under the Ellis Act.

At this point, tenants who have lived in the building for at least one year and who are at least 62 years of age or are disabled are entitled to a year’s notice from the landlord before the building is closed. Other tenants are entitled to a 120-day notice.

AB 982 would extend the one-year notice requirement to all tenants, regardless of age or disability.

HOA Homefront: When laws collide: Child safety or discrimination?

As to swimming pools, unless and until the law changes, HOAs must post the required signs but cannot enforce what that signs say.

Common interest development associations (aka “HOAs”) are governed by both state and federal Fair Housing laws.  Fair Housing laws prohibit “familial status” discrimination, which means singling out children for any disparate treatment. (This prohibition exempts senior communities, which are exempted under Civil Code 51.2.)  A complete ban on children would be a classic example of familial status discrimination.  Another form of such discrimination would be imposing special restrictions upon children and not to adults.

Fair Housing laws prohibit “familial status” discrimination, which means singling out children for any disparate treatment. (This prohibition exempts senior communities, which are exempted under Civil Code 51.2.)  A complete ban on children would be a classic example of familial status discrimination.  Another form of such discrimination would be imposing special restrictions upon children and not to adults.

Most associations and their managers hopefully know that rules specifically targeting children are prohibited under Fair Housing laws. However, in at least one context, state law appears to do just that — single out children for special treatment.  Associations which are not aware of a contradiction in current law could find themselves guilty of familial status discrimination regarding its swimming pools and spas.  California law has for years required that apartments or HOA swimming pools have a posted sign stating: “Children under the age of 14 shall not use

California law has for years required apartments or HOA swimming pools have a posted sign stating: “Children under the age of 14 shall not use the pool without a parent or adult guardian in attendance.” This requirement is currently found in the California Code of Regulations, Title 24 Chapter 31, Section 3120B.4. Another state regulation, Section 3120B.7, requires signs at spa pools reading, “Unsupervised use by children under the age of 14 is prohibited.”

However, associations are not allowed to enforce these two statements. If an association adopts a rule simply quoting the requirement of the two state law-mandated signs, banning unaccompanied kids from pools and spas, the association could be sued for violating Fair Housing laws. Several cases have been decided in federal courts in California over the years, finding that a restriction on unaccompanied children in pools violated Fair Housing laws.

This creates a very difficult dilemma for common interest development associations. On the one hand, a board is apparently being encouraged to warn of a potentially dangerous situation in association pools and spas, but on the other hand, if the association does anything more than simply post the sign, it violates Fair Housing laws. Conscientious boards often ask, what happens if a child drowns in our pool without an adult present, will we be liable? It is difficult to balance the obvious safety issue against the equally valid concern about discrimination.

Court opinions have noted that not all children under the age of 14 are unsafe in swimming pools and banning blanket bans on unaccompanied children.  However, at what age can most children generally validly be considered unsafe in a pool or spa?  The state of California places this age at 13, based on the content of the aforementioned regulations.

Many associations have other potentially hazardous amenities, such as gyms or weight rooms, saunas, and equestrian facilities, which can be very dangerous to a young and inexperienced or immature user.  Is it reasonable that associations cannot try to protect children in such areas because of Fair Housing laws?

When laws collide, the losers may well be exactly the persons the law is trying to protect – the children. For specific steps to try to balance these conflicting policies, consult your association attorney, preferably someone very conversant in Fair Housing laws.

As to swimming pools, unless and until the law changes, HOAs must post the required signs but cannot enforce what that signs say.

California’s war on carbon: Is it winning?

Prevent and Prepare for Springtime Pests

BY JANELLE PENNY –

Ward off an infestation with these tips

Warm weather is on the way, but it brings increased pest activity from insects, arachnids and other annoying invertebrates. It’s easier to prevent nuisance bugs from establishing an infestation, but if they’ve already invaded your facility, don’t panic. Get to know the most common springtime pests and determine how to deal with them with these tips.

Common Springtime Pests

Three key types of pests stay mostly dormant over the winter and emerge in spring, says Jim Fredericks, Chief Entomologist and Vice President of Technical and Regulatory Affairs for the National Pest Management Association: ants, termites and flies. All three lay low when the temperature dips under 50 degrees F. and resurface when the weather is dependably warmer, especially after rainstorms.

“Ants are the No. 1 nuisance pest in the United States,” Fredericks explains. “They don’t completely die out during the cooler months but might be outside of the structure in mulch or landscaping, hiding under rocks or inside using insulation to stay warm.”

Termites can destroy wood in structures year-round but are typically more visible during spring when they emerge to mate and start new colonies, Fredericks says. Flies typically remain dormant all winter but are able to move again and invade structures as temperatures start to rise. “Termite infestations, particularly subterranean termites, build shelter tubes that come out by the building’s foundation. It’s basically a thin mud tube that extends out of the ground a foot or so into the structure. That’s one sure sign of termites,” adds Gene Chafe, General Manager for Senske Services, a landscape maintenance and pest control provider.

Cockroaches and bedbugs are active all year because they’re most active indoors but should still be covered for in spring pest management activities, Fredericks says.

Proactive Steps to Prevent Infestations

The best thing to do is have an integrated pest management program in place that anticipates pests common to your area, inspects accordingly and takes action proactively, Chafe says. Pest management providers can inspect your property on a weekly or monthly basis and identify emerging outbreaks and conditions that encourage infestations, such as moist wood that can attract carpenter ants or leaves blown up against the foundation that provide nesting areas.

In addition to implementing a smart pest management strategy, make sure any screened windows are in good repair to keep flies out. Move garbage cans or designated refuse areas away from the building if possible and keep your compactor room or trash chute clean. Seal entry points and install door sweeps to keep out ants.

Outside, Chafe recommends inspecting your irrigation system while it’s running to check for standing water. Prune bushes 18-24 inches away from the structure and trim trees so that they don’t touch the building. Consider thinner ground cover, as thicker plantings can hide ground-nesting rats and other invaders, Chafe adds.

How to Expel Intruders

Once an infestation has settled in, you need to call in a pest control professional to sort it out before it gets even worse. Practitioners of integrated pest management will start with the least toxic methods to control the population, says Chafe.

Don’t try to take care of the infestation yourself, Fredericks warns. Different insects require different treatments and using the wrong one could backfire. He also suggests checking out the pest guide at pestworld.org to learn more about the habits, habitats and potential threats posed by different species.

The latest lesson from The Chart That Explains Everything: Buildings are still our biggest source of CO2

by Lloyd Alter 

livermore 2016

© Lawrence Livermore National Laboratory

Every April we show the latest energy flow chart from the Lawrence Livermore National Laboratory, which are “single-page references that contain quantitative data about resource, commodity, and byproduct flows in a graphical form.” I have called it The Chart That Explains Everything.

energy 2014© Lawrence Livermore National Laboratory and the Department of Energy

For the last few years I have been looking at this chart and noted that our single biggest problem is not the building sector but in fact the transport sector, thanks to that big honking green bar at the bottom. And indeed, when you compare it to 2014, transport energy use is up by .8 of a quad, significantly more than the entire installed base of solar power. I have written that getting people out of cars is the most important thing we can do; hence the preoccupation with walkable and cyclable cities. I wrote last year:

Solar panels are lovely things, but the only way we are going to solve this problem is to stop designing our world around the car, to design homes and buildings that need significantly less cooling, and to get a bike.

2030 graphUSGBC/via

I have also questioned this pie chart and the assumption of Ed Mazria and the 2030 Challenge that buildings are our biggest problem, and the architectural community’s preoccupation with building energy consumption instead of urban planning, suggesting that transportation was in fact the biggest offender, the biggest generator of carbon dioxide.

But I now believe that I have been reading this wrong all this time.

carbon 2014© Lawrence Livermore National Laboratory and the Department of Energy

If you look at the last year that Livermore did a flow chart for CO2 output, 2014 the single biggest source is the production of electricity, at 2040 million metric tons (MMT).

detail electricity© Lawrence Livermore National Laboratory detail

However when you look back to the energy consumption graph, the commercial and residential sector are using 9.44 quads, or 74.9 percent of all the electricity. That is 1528 MMT, mostly for air conditioning. Add the CO2 created directly by commercial and residential buildings and they total 2101 MMT, or 38.84 percent of the total CO2. Transportation uses 33.82 percent, and industry, 27.34.

pie chartLloyd Alter/ pie chart of 2014 carbon emissions /CC BY 2.0

So the 2014 pie chart looks pretty much like Ed Mazria’s 2004 pie chart, and I have been wrong in claiming that transportation is a bigger source of CO2 than buildings. About the only thing that I can say is that transportation is going up while buildings are getting better, down by .8 of a quad since 2014.

Two years ago I concluded:

So basically it’s the car, driving to air conditioned sprawl, that’s responsible for as much as 71% of our carbon emissions. Changing light bulbs doesn’t fix that. Really, we have to do everything we can to get people out of their cars, and into walkable communities in temperate climates. Everything else is just gnawing around the edges.

But I was wrong to suggest that transportation is a bigger problem than our buildings. How we get around is obviously still critically important, and is going in the wrong direction. But what we build in fact does matter more.

5 Qualities and Habits of Great Property Managers

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Sometimes life is what happens while we’re making other plans. Other times life feels like it’s in the palm of our hands waiting for our decisions about what we want to make happen next. Maybe that’s the way our lives are supposed to feel. One of the things I know for sure is that you can learn a great deal about successful property management by watching those who are adroit at it.

One of my “pet projects” is studying the habits, qualities and characteristics of highly successful property managers. Through the years I’ve discovered some consistencies they all seem to share.
The first is what I call “brilliance”. I don’t mean they’re extra smart nor have an unusually high Intelligence Quota (IQ). Their “brilliance” shines in their daily approach to their work. Like this article implies, they’ve learned from other brilliant managers and they’ve applied what they’ve learned. They’re willing to take the time to study the characteristics and successes of others.

The second quality, one that becomes habitual, is that great property managers have an extraordinary amount of curiosity. Since they are, either by nature or self-discipline, observant professionals, they keep their eyes and ears wide open for better ways to accomplish. They’re not afraid to ask questions, do research, and delegate to others the task of finding solutions.

They’re obsessed with growing and evolving. They seem to innately know that something that they don’t know is holding them back from reaching their full potential. They’ll go to seminars, join associations, listen to self-improvement CDs and watch DVDs. As the father of Self-Actualization, Abraham Maslow, would say, “They must become all that they must be!”

Humility is a key quality and component of their character. They’re not driven by their egos and they don’t care a hoot about becoming arrogant. They like achieving abundance and success, but they’re not compelled by an insatiable appetite for wealth and power. With their humility comes a sense of altruism and a desire to know they are making a positive contribution to society. They derive great satisfaction in serving the needs of their clients and residents.

They strive for excellence without being perfectionists. Perfectionism will drive you to distraction! Wanting to be their “personal best” and to challenge themselves away from mediocrity and complacency describes these high achievers. They learn from their results.

To gain more understanding about the qualities and characteristics of outstanding property managers, I encourage you to read a book (or listen to the audio version) like “Good to Great” by author Jim Collins.

Property Managers are in many ways similar to companies and corporations. Why do some stay stuck, implode or wither why others “make the leap” from being good to becoming great.
“How can good companies, mediocre companies, even bad companies achieve enduring greatness?” When that question is answered, it can almost always be applied to individuals and partnerships.

“For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to [become] great?” After an intensive 5 year study Collins and his team of researchers found some amazing similarities.

Those in the property management industry can benefit from insights and ideas that articles like this one or a book like “Good to Great” offers. Knowledge and awareness will provide the power and the “fuel” to help propel you to the next level of personal growth and rewarding achievements.

Property Management Fees – Part II

by Jordan Muela

Make sure you read Property Management Fees – Part I first.

Here are the rest of the property management fees that you need to be aware of and look out for:

Advertising fee

There are plenty of ways to generate leads using free resources like signs, craigslist, etc. but with vacancies time is money and prolonging the search process to save a few advertising dollars is a bad idea. This fee could be charged in addition to the leasing fee so it’s important to ask who pays and what the typical fees are. The better they are at marketing the less you will pay, if they have a good strategy and use tools like rentmarketer.com this should be around $100 and certainly not more than $200.

Lease renewals

Some property managers charge this fee whenever they have to draw up the paperwork to renew a tenant’s lease. The fee typically ranges from 0-200$. The process doesn’t require a lot of work, so a big fee should be a red flag. You should ask if they require lease renewals or if they allow tenants to go month to month after the initial term is up.

 

Reserve fund fee

These funds are used to pay day-to-day operating expenses, making sure that services are performed promptly and bills are paid in a timely manner. A reserve of $200-$500 is normal for single family properties.

Maintenance fees

Will they contact you with an estimate before performing repairs over a pre-defined amount? Is this negotiable?

  • Their policy may be to notify you if an expense exceeds a higher figure like $500-$1,000, but you may want to ask if this can be set lower ($100-$200) starting out and increased over time as you become more comfortable with the property management companies judgment. Additionally, if this notification is waived during “emergencies”, ask that they define what qualifies as an emergency.

Do they have their own maintenance/repair crew?

  • Companies that don’t offer this may portray it as an ethical hazard since the company could overcharge, but so long as you confirm that the billing rate and process is reasonable, it should not be a problem. If managed properly, an in house crew is a benefit that can lead to cost savings and a more streamlined process. Here are some questions to ask:
    • What services do they perform?
    • What is the billing rate? ($30-$40/hr is average.) Does it vary based on the work being done?
    • Is there a trip charge, or a minimum billing time?
    • Are they available 24/7/365? Is there an extra fee/higher billing rate if they are called on off hours, weekends, or holidays?

For larger remodeling/upgrade projects, do they act as the general contractor overseeing the work that is done? Is there a fee for this?

  • Do they get at least three independent bids for larger ($500+) projects?
  • Do they belong to a network to get better repair rates on the work they outsource?
  • Do they charge a “mark-up” fee?
    • This fee is stacked on top of the final bill for the work performed. Not all firms have this fee; if they do it should come in around 10%.

Eviction fee

Fee for serving notices, dealing with attorneys, court appearances, evictions, etc. Hourly rates are typically $25-$50 while a flat fee for the whole eviction process usually comes in between $500-$600 (plus court costs). Find out if they typically use an attorney for evictions and what their billing rate is.

Unpaid invoice fee

This is a small service charge (typically 1.5%) that is added each month to all unpaid invoices that are past due.

Bill payment fee

Fee for making owner payments such as mortgage, insurance, home owners association dues, etc. Some management firms don’t charge a separate fee, while others don’t even provide this service.

Sales commission if property is sold

Some management firms require an exclusive arrangement to broker your properties. If this is their policy, find out the brokerage rate and make sure there is a limited term which will allow you to re-list with another firm if the property does not sell within a reasonable period of time. Also, if the firm requires it, how much would the sales commission be in the event that a tenant ends up wanting to purchase the property they are occupying? This is typically 1-3% but we have seen higher, always make sure to check the contract.

Other income

Find out if they will be keeping any portion of the following sources of income:

  • Late fees
  • Returned check fees
  • Pet deposits
  • Lease violation fees
  • Interest on security deposits (may not be applicable depending on state laws) and owner funds held by manager
  • Income from laundry and vending machines

Extra duties fee

Some contracts contain a list of extra services not included in the contract along with the billing rate in the event the owner requests any of them be performed. Check to see if this clause exists, what services are listed, and what the billing rate is.

Keep reading to find out where these funds go and how your management company will handle both your and your tenant’s funds.