Preventing Cyber Attacks, Part 2: How The Board Can Protect HOA Data

Cyber security is not something that your homeowners association (HOA) can afford to take lightly. A constant flood of cyber attacks hits businesses, governments and individuals every day, and many of them have affected Californians.

In May 2017, one such attack shut down the largest terminal in the Port of Los Angeles. In 2016, ransomware prevented a number of California hospitals from accessing important information, with hackers demanding money to unlock the data. Hackers also disrupted the San Francisco Muni system that same year. And according to cyber security experts, the severity of these attacks is only going to get worse.

To tackle the growing problem of cyber crime, the California Cybersecurity Task Force was created as a statewide partnership in 2013. A few years later, the California Cybersecurity Integration Center was created to improve coordination of information and help reduce the number and severity of incidents. In addition, representatives from all levels of California government attend the Cybersecurity Symposium each year to share their concerns and get the latest information.

Clearly, the state of California takes cyber security very seriously – and so should your HOA’s board of directors. Keeping sensitive information safe is part of your fiduciary duty to the homeowners in your community. But how does a board made up of volunteers address this issue?

In the first article in our two-part series on cyber security, we discussed how homeowners could do their part to prevent cyber attacks. In part two, we examine the steps that your board of directors can take to protect HOA information.


The Increase of Rental Property in Community Associations (HOAs) – The Subscription Economy

Subscription Economy Driving Increased Rental Property in Community Associations and HOAs

The increase of rental property throughout community associations and HOA’s is on the rise, there’s no doubt. And just because you’re a “tenant”, doesn’t necessarily mean you don’t care.

When is the last time you bought a DVD? How about the last time you bought a CD? The preference of buying and selling goods and services on a subscription model, rather than a one-time purchase, is becoming mainstream and probably sits somewhere between the early and late majority on the adoption curve – I’d argue it’s still early.


What is the Subscription Economy?

Subscription models have been around for a really long time. The surge of the subscription model is trending and becoming preference for many – both business and consumer. Think trade unions, magazines, Blockbuster, and contracted services as early adopters. Today we have Netflix, Amazon, and even Walmart pursuing the subscription business model. What’s so great about a subscription model anyways? You could argue it’s two fold:

  • It’s better for the business
    • Steady cash flow
    • Increased focus on long-term value
    • Predictable revenue
    • Reduced cost in customer acquisition
    • and much more…
  • It’s better for the customer
    • Flexibility
    • Better support and service
    • Easier to budget
    • Less upfront commitment

Although I don’t believe the subscription economy is the only contributing factor to the increase of rental properties throughout Community Associations and HOA’s, it may play a large part in why we might be seeing an increase in tenants, especially as the newest generations begin living on their own and others realize they don’t want the long-term commitment anymore.

The American Dream

In the United States, The American Dream is/was built on a foundation of owning your own home – it made sense when the world was less accessible globally, real estate was cheap, and careers were spent at a single place of employment. In my opinion, that’s no longer good supporting evidence. I have friends, under 30, that have had 2-3 professional careers already. Real estate is a 30 year “investment” and I can be anywhere in the world in less than 24 hours.

Times have changed and I believe purchasing and or owning a home is becoming a downward trend. It’s not even a generational thing, it’s a cultural shift. People are realizing that owning a home doesn’t really pan out to be a good investment if you want to be agile, work for multiple companies, and enjoy the freedom of less commitment. Granted, if you plan on staying put and you buy at the right time, it’s a great investment. The argument can go both ways, dependent on your future plans and commitment level.

What actually drives the increase in rental property throughout the community association? I’d be interested in hearing other’s thoughts on this topic.

Some other factors I believe contribute to the increase in rental property within HOA’s and Community Associations:

  • Access and speed to information
  • Real estate downturn during youth (2008 R.E. crisis)
  • Increased speed/pace of life
  • Career duration and frequency
  • Institutional investors purchasing within common interest developments

Preventing Cyber Attacks, Part 1: How Residents Can Protect Your HOA

Ignorance is not bliss, especially when it means potentially leaving your homeowners association (HOA) at risk of a cyber attack. And that’s exactly what you’re doing if you don’t recognize that your HOA is as much of a target as any other small business.

Small businesses, including those in California, have become more attractive to cyber criminals, as a variety of sources indicate. For example, the February 2016 California Data Breach Report notes that small businesses accounted for 15 percent of the data breaches reported to the California Attorney General from 2012 through 2015. California, which was the first state to mandate data breach reporting, continues to tweak its legislation, with the most recent change likely to impact its future analyses. As of 2017, encrypted data that is breached will be subject to the same notification requirements as unencrypted data.

Another source that points to greater vulnerability among small businesses is Malware Trends for Small and Medium Businesses Q1 2017. It reports that California small- and medium-sized businesses experienced an increase of nearly 612 percent in spyware incidents from Q1 of 2016 to Q1 of 2017, ranking the state fifth in the country. In addition, an FBI report reveals that Californians lost more money to cyber crime in 2015 than any other state – more than $255 million.

Unlike other small businesses, your HOA is probably not run by business professionals and is even less likely to have technology experts among its leadership. So what can you do to keep your data safe?

In our two-part series, we share some tips that your association can apply to protect your community from cyber attacks. Read the first article to learn how residents can play a role in your HOA’s cyber security.

Rental Inspections: What Landlords Need To Know

rental inspectionPosted on Sept 5, 2017

If you are only checking the state of your rental unit when your current tenants move out, you risk letting a problem go unchecked until it could cause thousands of dollars to fix. Responsible landlords and property owners should strive to check the condition of their rentals quarterly. Not only can this limit property damage or misuse of your rental property, it can help you plan for upkeep and maintenance. Learn why you should switch to quarterly inspections and what to look for during a property check.

Why Do a Quarterly Rental Inspection?

Often, property damage occurs cumulatively, for instance when a renter’s pet scratches at the door or when a tenant starts to hoard possessions. By the time you get around to a move-out inspection, the damage is already done. The carpet is stained, the rental is filthy or the door is scratched beyond repair. The question becomes, how much will your earnings suffer as a result? What’s more, how long will your rental unit sit vacant while repairs are made?

Renters often treat your property better when they know you’ll be checking in regularly. Why would renters sell drugs or throw big benders when they know you’re keeping an eye on the property?

It’s a good idea to develop a rental inspection checklist and share this with your tenants. This brings your renters on board with keeping your property safe while setting them up for success.

Rental Inspection Tips for Landlords

Your tenants have the right to enjoy their apartment without unauthorized visits from you. So you are in compliance with local laws, give your tenants a 24-plus hour notice you’ll be doing inspections and keeping your visits brief. Share the rental inspection checklist ahead of time, so they know where you’ll be.

While your first inspection may take longer, it should not take more than 20-30 minutes to inspect your rental once you’re familiar with the process. Don’t forget to examine the outside of the unit — gutters, roofs, yards, basements, and porches or decks need your seasonal attention, too.

Along with checking for damage to the apartment, these visits are a great opportunity to perform light maintenance your unit requires. You may wish to replace air filters in the HVAC system, check smoke detectors, or install or remove storm windows during these visits. Lengthier projects can be completed at a follow-up date, or you may wish to hire someone to perform the needed services.

If you find a problem, take photos that illustrate the problem and write notes while everything is fresh in your mind. When you’re calm, discuss what happened and how to proceed. You may wish to give the renter a chance to fix the problem, or you may prefer to hire someone and bill him or her.

Get more advice on preparing for a rental inspection — including tips on what tools to bring with you for a quarterly inspection — from American Apartment Owners Association.

Disclaimer:The information provided herein is for advisory purposes only and AAOA takes no responsibility for its accuracy. AAOA recommends you consult with an attorney familiar with current federal, state and local laws.

How Property Management Leaders Can Achieve Better Work-Life Balance

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Growth Opportunities: The Iceberg Report

Right now in the United States, there are about 22 million single family rental homes and multi-family rental properties that have up to four units. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This offers a vast opportunity to the 32,000 small or mid-sized property management companies.

There are a lot of social and economic factors that keep rentals in high demand. Over the next five years, about 8 million single family rentals will come into the professional management market. The opportunity is clear, and to take advantage of these opportunities, it’s important and necessary to establish trust between property managers and landlords and investors. This is one of the divides that’s keeping property managers from growing and acquiring new business. To effectively win all the new business that’s available in local management markets, property management companies need to demonstrate their value and give landlords and investors who have been managing on their own a reason to trust that their properties are better off with professional management.

Tony LeBlanc and the Need to Establish Balance

Any problem in an organization can be traced to the top. If the leadership is off balance, the team will never reach its potential. The CEO’s mood or the director’s attitude affects the team. Tony LeBlanc is a successful property management entrepreneur, and he made the choice to balance himself and his team to achieve better results. The business is growing and thriving because of his efforts. He spoke to Alex about the need to balance personal and professional goals, and why it matters to property management executives.

Tony is from New Brunswick, Canada. He owns and operates a property management company, Ground Floor Property Management, with three locations, and he’s been in business for eight years. He was born into the field; as a child he lived in a building where his mother was the resident property manager. Tony worked in the technology field after college and began investing in real estate. Then, he got back to property management and built a company that went from 0 units to 1,000 units in two years.

Advice for Fast Growth: Call Everyone

This type of fast growth came from calling everyone he knew. Tony called all the Realtor friends he worked with previously and used his relationships and connections to quickly establish himself. There was a snowball effect from picking up the phone and letting people know he was in business. Property management is a people business and a relationship business. It’s hard to earn new business sitting in the office. Go out and meet every Realtor in town and anyone associated with the rental business. Connect and create relationships to increase the amount of business you’re doing.

Fourandhalf note: We were at the recent Inman Connect San Francisco 2017 – Real Estate Conference, where high-powered real estate agents meet to stay ahead of the industry. Of the real estate agents we spoke to, the majority of them did not have a relationship with any of the property management companies in their community. It is important for property management owners to be aggressive in conveying their value propositions to people like real estate agents, where there is a great opportunity for a mutual partnership.

Balance and Confidence – Define Your Property Management Purpose

What does it mean when Tony says the property management industry is off balance? When you study this industry, you see a lot of the same trends. It’s chaotic and stressful and busy. There’s a lot of negativity associated with the work, and that negativity often comes from the property managers themselves. There is a lot going on at once in a property manager’s day. Everyone knows it’s stressful. But, if you’re in a position of weakness – either you’re having issues at home, or your health isn’t where you want it to be, or you’re not connected to yourself spiritually – you won’t be clear about where your business is going, and the stress and the chaos that comes with an average day will be magnified.

You need a purpose to what you’re doing, and if you don’t have that purpose, the daily grind is going to be much harder to endure.

Every day that you come into the office, you need to know where you’re going and why you’re doing what you do. Not only do you need to know that – your staff and your team need to know that as well. Everybody needs to be aligned with what all this is for.

Tony has a two-year roadmap that he shared with his team and a list of goals and opportunities that he wants to achieve. But, the statistic that resonated with them more than anything else is this:

Last year, Tony’s team housed almost 2,000 families.

That’s the purpose that will balance and motivate a team; knowing that 2,000 families have relied on them. Well-balanced and empathetic property managers will understand that people are counting on them to take care of their homes, their futures, their safety, and the place that their children grow up. You cannot take the reallife part of this job for granted. Property management includes a lot of pushing paper and conducting move-in inspections and taking calls, but the purpose is to provide an exceptional experience for everyone you come across. You’re protecting an owner’s investment and helping tenants feel comfortable in their homes.

Building a Trust Bridge Between Tenants and Owners

This may remind you of the podcast conversation with Lisa Wise, who advised leading with empathy. A lot of property management entrepreneurs think of tenants as a necessary evil. They mentally set up an adversarial relationship with these pesky entities who are only good for paying rent. If you change your thinking, you change the way you provide property management, and you change the experience for everyone who works with you.

Property management shouldn’t be a tenant-versus-owner dichotomy. Your business cannot be all about the owner, because if you cannot keep good tenants in place, it doesn’t matter how many new owners you start working with. You won’t have tenants to fill their properties. Taking care of tenants is just as important as taking care of owners.

This is part of the trust bridge that the property management industry needs. Policies and systems are critical, but empathy is absolutely necessary. There are a lot of different ways to say no. You can say no and still be helpful. If something doesn’t work between you and a tenant, leave them with an out and be sure to end the relationship on a positive note. If you live in a small community, word spreads fast through other tenants and property managers. Leading with empathy will build you a better business.

Routines and Rituals: How to Start Balancing Personal and Professional Goals

Personal lives always bleed into office lives, and balancing the two takes some work. At home, Tony has a protocol in place, which starts with waking up at 5:00 in the morning and taking care of himself and his personal priorities. He works out, drinks a smoothie, and takes the time to write appreciative notes to his children and his girlfriend. Then, he meditates and journals and reviews study material that’s relevant to his business and his professional goals. All of this is done in what he calls his morning power hour. His day is moving on a positive note before his children are even awake.

At the office, the day begins with a morning huddle with his staff. Everyone gets together to review the previous day. This puts everyone on the same page and ensures the whole team is aware of any new notices, new maintenance emergencies, and new applications. Then, each team member has the opportunity to define their number one priority for the day. It might be collecting rent or making deposits. The leasing agent might have a good lead. Everyone is calibrated and ready to start the day.

Jim Kwik, a renowned mental coach, talks about the need for routine, and how a healthy brain needs one ingrained. Most people don’t have this, and it sounds intimidating when you hear about the discipline that someone like Tony possesses. Don’t be intimidated – just be willing to start somewhere.

Pick one or two things that are weakest for you and where you get the most value. Start there, and if you can build a routine with just those one or two things, they will become intuitive and instinctual, and part of your everyday life. Then, you can start incorporating more things into the routine and it will be manageable. So, if you’re thinking your health is where you’re weakest and you value being able to live a longer, healthier life – make a visit to the gym a part of that morning routine. If you can’t get a whole workout in, give yourself the opportunity to sweat hard for 10 minutes. This is a matter of taking an assessment of yourself and being real. Find that weakness and start with something simple.

Healthy Leader/Healthy Staff: Centering Your Team

Tony admits that sometimes his own routine is a bit over the top, and a little aggressive for most people. He doesn’t expect his team to be just like him, but he does tone it down a bit and offer tips and advice that everyone can apply to their lives. Office discussions will include fitness and nutrition and relationships. Many people have kids, and he recognizes the importance of having real conversations. There’s nothing superficial about the growth and balance that he wants to achieve. Tony is willing to ask deep questions, and he creates an environment where his team feels safe answering those questions.

The team huddle sets the tone for the day and centers everyone. From that, other things are put into place to protect that sense of balance and healthy behavior.

For example, the office hours are 8:30 to 4:30, but the doors don’t open to the public until 9:30. That gives the staff an hour to catch up and prepare. On Friday afternoons, the office closes at 1:00 for training sessions or catching up and preparing for the week ahead. Focusing and planning for the next week is a big component of the business. Those Friday afternoons are critical because everyone can decompress and wrap up from the week.

Sponsor for Today’s Podcast – Property Management CMO Consulting 

The second sponsor for today’s podcast is Alex Osenenko, who is offering intensive consulting sessions on marketing. A lot of property management companies underspend on marketing. That cuts off their ability to grow, and it can cost the business hundreds of thousands of dollars in opportunity. Here’s an example. Company A spends $50,000 a year on marketing and gets 70 new contracts. Company B spends $20,000 on marketing and only gets 30 contracts. In annual contract value, that’s a $100,000 difference. With CMO strategic level consulting, you’ll get a marketing plan with a blueprint that can be deployed using specific channels. It’s a unit economics model that gets down to profitability so you know what each property is worth to you. You can remodel your fee structure so you get more add-on value services. By bringing value to your clients, you make money. This is expensive, and will cost $5,000 for a full day. If you’re interested, email to get an intake form.  

Using Gamification in the Pursuit of Balance and Success

Gamification can help with motivation and accountability. Something as simple as awarding yourself points for the things you accomplish can provide a way to track your progress and feel good about what you accomplish. Tony calls his morning routine the Core Four. There are four major areas he’s touching, and he wants to do two things in each of those areas. So, he can earn up to four points per day. His goal is to reach those 28 points per week. Every Sunday night, he reviews his week and determines what happened if he didn’t reach that goal and what he has to do to correct the course for the following week.

The same thing applies to his professional routine, which he calls the Key Four. Every Sunday night or Monday morning, he plans four major tasks that he needs to accomplish that week. Maybe his 90-day goal is to increase revenue by a certain amount. He breaks out his benchmarks and his targets and he establishes those four tasks every week that will get him closer to that revenue goal. Making it a game is a tactic that’s fun and simple and accountable.

Consulting, Coaching, and Personal Development

It’s easy to dismiss personal development and coaching as schemes designed to separate successful people from their money. However, the right coach or the right book or the right community of like-minded people can change your life and alter your path. For Tony, it was realizing his software job was setting his life off balance after he read The Monk Who Sold His Ferrari by Robin Sharma. That is when he became more interested in personal development.

This is a world where it’s hard to figure things out on your own. Having a community or a coach who can challenge you to think differently and expect more from yourself makes an enormous difference in your balance and your ability to achieve success. Most people out there, professional athletes included, need a coach. You need someone to push you through these things.

As a property manager, do yourself a favor and give yourself a break. You need to bestow permission upon yourself to live a great and balanced life. Property management doesn’t always feel like one of the best industries out there, but it is. Property managers are doing work that matters. It’s becoming more mainstream, and to get to the next level, property managers need to be professionals. Be accountable with yourself and others, and find your balance.

If you have any questions about what Tony and Alex have talked about today, please contact Fourandhalf.

Some Apartment Markets Are Facing Challenges

Apartment rents are not growing as quickly as they had been, according to research firm RealPage Inc.

In a few overbuilt downtowns, apartment rents are starting to fall. But experts claim that demand for apartment units continues to be so strong, the trend won’t last for long.

“The story in these markets is the apartment story writ large: the high levels of apartment construction are not enough to house the 1.2 million or so new households formed each year without increased single-family construction,” says John Affleck, research strategist with the CoStar Group.

Apartment rents are still growing, but not as quickly as they had been, in markets across the country, according to research firm RealPage Inc. Rent growth is slowing the most in a handful of cities where developers have opened thousands of new apartments recently.

Rents fall in Houston

In Houston, rents dropped by 1.6 percent on average over the past year, according to RealPage. In the top “urban core” neighborhoods where developers have opened the most new apartments, rents have fallen by more than 10.0 percent. Apartment occupancy rate in the city averaged 92.9 percent in mid-2017, down 180 basis points from the high of 2015.

“There is still some pain immediately ahead for Houston, mainly reflecting that another 22,000 or so apartments will be delivered in the coming few months,” says Greg Willett, chief economist for RealPage.

However, the outlook for Houston is strong. “Once we get past early 2018, however, the completion pace will slow to a trickle in a metro likely to be experiencing robust employment growth,” says Willett. “The metro has the potential to move from performance laggard status to star positioning very quickly.”

New York City

The rents in New York City are barely growing. Revenue growth was close to zero over the 12 months that ended in mid-2017. “So not terrible, but very little rent growth,” says Barbara Denham, senior economist with research firm Reis Inc.

Developers are expected to open 20,000 new apartments in New York City this year, according to RealPage. That’s about 25 percent up from the year before. “Some further rent cuts are possible,” says Willett. “Queens will join Manhattan and Brooklyn among the areas struggling to digest sizable new supply.”

Nashville, Tenn.

Developers are now opening new apartments in Nashville at a rate of nearly 8,000 a year. That’s about double the rate of completions in 2016 and 2015, according to RealPage. The occupancy rate was 95 percent at mid-year, 160 basis points lower than it was 12 months ago.

Rents still grew by 3.4 percent in Nashville over the 12 months ended at mid-year. That’s close to twice the overall rate of inflation. But it’s less than half the rent growth compared with the year before, when developers opened half as many new apartments. “And the downtown submarket—where construction is heaviest—is suffering sizable rent cuts,” says Willett.

Rents are growing in smaller markets

Not all apartment markets are cooling off. The places where the pace of rent growth sped up the most include Colorado Springs, Colo.; Ventura County, Calif.; Tacoma, Wash. and Sacramento, Calif. Effective rents grew on average between 5.0 percent and 8.0 percent in these markets over the 12 months that ended in mid-2017.

These towns don’t have much in common, except they are located in close proximity to markets with very expensive apartment rents, including Denver, Los Angeles, Seattle and San Francisco, according to Denham.

Source: NRE Investor

Turn breakrooms and cafes into all-day assets

Need to confer with colleagues at Red Hat, a Boston-based cloud software company? Grab a seat near the coffee pot for a quick discussion. The small offices behind these conversation stations are enclosed phone booths where employees can make private calls without disturbing others. | AEI

Far from distracting employees, breakout areas and spaces for socialization can actually improve productivity. A casual chat over lunch can spark an idea. Bumping into a colleague on the way to the coffee pot can lead to collaboration.

“Previously, business owners didn’t want to waste square footage on plazas, multipurpose rooms, breakout areas and socializing spaces. They wanted to see how many bodies they could fit in the space,” explains David Chason, Partner of AEI U.S. Studio. “It has come full circle in the last six to eight years. Designers have always put that into our designs, but clients and business owners
are now listening to that and using square footage in a different way that affects retention of employees.”

Thoughtful renovation can turn a humdrum breakroom into a space that achieves maximum use throughout the workday. Try these tips to draw people in.

  • Pay attention to café and breakroom design. “Food draws everyone together,” says Amy Klinefelter, Interior Designer for Gresham, Smith and Partners. “Providing large gathering spaces to collaborate and eat together is a great way to draw in younger employees and retain them longer.”
  • Instead of a breakroom, look at social spaces with multiple functions in mind. Chason views these areas as the “town center” around which the workplace revolves. “We look at spaces as cities,” he adds. “You’ve got houses in the suburbs, you’ve got townhouse and skyscraper buildings, you’ve got parks, and that’s how we look at the landscape of office space for a business. You also have enclosed private conference rooms – like when you plant a hedge for privacy – and open plan workstations where everyone has a visual of each other – the same as when you live in a city with lots of neighbors.”
  • Consider white noise or other acoustic solutions for open and common areas to keep socialization from bothering people in nearby workspaces.