12 “Must
Have” Qualities of an Onsite Manager
AOA
Magazine: December 2011 / by Shaya Stauber
12
"Must Have" Qualities of an Onsite Manager - AOA Article.pdf
Shaya Stauber is a principal with Ratner Property
Management - R.E. License 01385202. Ratner Property Management has been
managing properties in
10
Suggestions When Qualifying a Tenant
AOA
Magazine: September 2010 / by Shaya Stauber
10
Suggestions when Qualifying a Tenant - AOA Article.pdf
Shaya Stauber is a principal with Ratner Property
Management - R.E. License 01385202. Ratner Property Management has been
managing properties in
When Does
Spending Increase Profits?
AOA
Magazine: April 2010 / by Shaya Stauber
Rents are down, vacancies are up and there is no sign the
market will get better in the near future. The natural reaction when times are
tough is to cut spending, but you need to fight this urge and spend more. Increase
spending on things that improve the value of the building, attract new tenants
and retain current tenants. This may sound ludicrous in a time when, (rents
have dropped in some areas up to 50%,) many owners are barely making their
mortgage payment and vacancies are destroying the bottom line, rather just the
opposite.
The way to improve the bottom line is through spending. Why
do landlords spend money when times are good? Many landlords were willing to
throw money around two years ago when money was coming in and rents were at the
peak. This was at a time when you had your pick of tenants and a vacancy had
multiple applicants. Landlords were spending just because they had it not
because it would increase profits or occupancy. If your pipes are working perfectly
would you fix them just because you had money in the bank, and if they are
broken - not fix them if money was short? There was nothing wrong with spending
money when you had it, but to skimp when times are tough is shortsighted.
Spend when you need to - not just when you have extra
money. Microsoft didn’t have commercials before Apple started doing well and
began advertising the MAC. Microsoft was the market leader and had plenty of
money to spend, but they waited until it was necessary to start spending. Now
they have real competition and they need to spend and even though times are
tough, they are spending more.
Especially now, when times are tough – it may be necessary
to spend some money marketing your building and keeping your clients (tenants)
happy.
Upgrades and Amenities
There are many vacancies on the market so you need to set
yourself apart without getting in a price war and lowering the rents. If the
rent is dropped too low in a rent controlled building, it might take years to
get them back to market. The trick is to set your building apart without
lowering the rent.
Accomplish this by making upgrades to the units like new
appliances, new paint on the cabinets, granite, new carpet, new landscaping,
and other common area upgrades. Some of these items are expensive, but remember
these are upgrades to the building, which will increase the value.
It’s a numbers game and the more people who see the
vacancy, the better the chances are of renting it. Having pictures and a floor
plan/virtual tour available online will allow more people to easily view the
unit. This is a one-time expense per unit type and it lasts forever. Offer an
incentive for anyone who comes to see the unit - like a raffle, with the prize
being movie tickets all the way up to a TV.
Once your potential tenants are looking at the apartment,
make sure that it stands above the competition. Have amenities to offer for
lease or as part of the unit. Some amenities you can offer are a TV,
refrigerator or a fully furnished unit. These items may be expensive but they
create value and help rent the units quicker and without lowering the price.
There are many possible upgrades for the complex and the unit, and each
building is unique, so look at your building to see where upgrades can be made.
There are also some services you can offer in your building:
• Have a mobile car
wash come to the building at night to wash cars;
• Have a local dry
cleaner offer pickup and drop off for tenants or
• Add a vending
machine.
Be sure to let the tenants know that these are amenities,
and that the landlord is not responsible for the product. They should speak to
each vendor if there is an issue. Don’t let it become a headache but offer as
many amenities as possible.
The ideal scenario is to stop a problem before it starts,
like going to the dentist for a cleaning to avoid cavities. This is
accomplished by retaining your existing tenants. Don’t ignore existing tenants
with the thinking that “my tenants aren’t going anywhere - nobody likes to
move”. Tenants WILL move! There will then be down time and an avoidable
vacancy. Be proactive; don’t wait for your tenants to ask for a rent reduction.
Tenants know the market, so first try to keep them happy without lowering the
rent. The same advice goes for this - perhaps an updated kitchen or some other
upgrade that sets you above the rest. Money spent on the building will increase
the value if it’s spent wisely. (Always try to get a lease extension in
exchange for the work being done.)
Build Relationships With Your Tenants
Let your tenants know that you care. When a tenant feels
like a person and not just a number on a rent roll, they will show more
loyalty. A few ways to accomplish this is with holiday cards, a holiday party
or some form of raffle for all tenants that pay rent on time. If tenants feel
they have a relationship with the landlord, it will be harder for them to
leave. Recognize how tough it is financially for most tenants and be as
accommodating as possible. Don’t have rules across the board that can’t be
broken; evaluate each tenant individually. If a tenant has a job that pays on
the 5th, let him pay on the 7th. As long as the tenant is
paying consistently on the same day and the money is not needed for the
mortgage, be flexible. Offer credit card payments for rent. There are companies
that provide this service and the credit card fee is paid by the tenant. This
will allow the tenants to have up to a month to pay the credit card company and
alleviate some pressure.
Create a Community
Having a community and not just a building will help retain
tenants. If tenants are close to their neighbors and socialize with them,
wouldn’t they be more likely to stay than tenants who don’t know anyone and
have no ties to the building? Most interaction today is online, so people crave
personal, face to face contact and the landlord needs to create a community to
offer this desired interaction. Landlords can create the initial contact since
so many tenants are uncomfortable doing it on their own.
• Throw a building
party where the tenants can meet neighbors in a relaxed environment
• Start a small
craigslist style blog where tenants can sell, buy and barter with each other or
share DVD’s
• Offer a rent credit
to any tenant that refers someone who signs a lease. This will lead to more
tenants knowing their neighbors.
There are many other creative and inexpensive ways to get
tenants together. Anything that gets tenants interacting in a positive way will
help to keep the building occupied.
Know Your Market
The solution for a tenant who is paying significantly above
market is to lower the rent. Many landlords won’t lower rents or make
improvements for existing tenants because they feel it is giving money back
that is already in their pockets, but this is wrong. It is tough to convince a
tenant to stay if they are paying $1,700 for an apartment that is worth $1,200.
What will happen if the tenant moves out? What rent would you get for that
unit, what improvements would need to be done and how much down time would
there be? If the rent decrease is warranted don’t let pride or reluctance to
change with the market stop you from making a sound business decision. If you
do lower the rent to keep a good tenant, have the tenant sign a confidentiality
agreement to avoid conflicts that may arise from having tenants compare their
rents.
Landlords need to see their building and their neighboring
market from a tenant’s perspective. Pretend to be a tenant who keeps hearing
how rents are going down everywhere and that “it’s a tenant’s market out
there.” Look at other buildings in the area and see the competition; compare
market rents and what amenities other buildings are offering. After seeing
other buildings, be honest and ask yourself “Would I want to live in my
building or in the one down the street?” This will help you determine the
current rental value and/or any necessary building upgrades. If it’s impossible
for you to remain impartial, ask a friend to do it for you. A property manager
can be impartial and honest since they are a neutral third party. So the next
time a tenant calls for a rent reduction, you will know if it’s truly warranted
or if the tenant is just fishing.
Summary
The ideal situation is to retain current tenants avoiding
costly and timely vacancies. Accomplish this by being accommodating and
understanding to the tenant’s situation. Assume tenants are looking around and
go see firsthand what is on the market, then compare it to your building in
both price and quality. Try to offer free or inexpensive amenities for the
building to keep tenants happy and to build a community. When necessary, don’t
be afraid to spend money on the building or lower a tenant’s rent. The money is
not wasted since it will be improving the quality and value of your property.
The key is to survive these trying times and wait until it gets better. Real
estate is a long-term investment, don’t panic and cut corners. This is merely a
bump in the road on a long journey. Do what’s necessary to improve your
building, occupancy and profits.
Shaya Stauber is a principal with Ratner Property
Management - R.E. License 01385202. Ratner Property Management has been
managing properties in
Link to Article: AOA - Published Article
by Shaya Stauber