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It's 5 o'clock. Do You Know Where Your Culture Is?

    Do you remember those motivational posters that had a majestic image and an empowering quote or word below it? So many offices across the nation sported variations of these posters (and maybe still do) as a way to drive a strong corporate culture. We had an entire arsenal of cultural accouterments: Vision. Mission. Values. On a tri-fold laminated card? Yes please. With a matching inspirational daily calendar? Absolutely.  Somewhere along the way, we started defining company culture by its accessories rather than its substance. We showcase culture by the perks and benefits our organization offers, rather than by behaviors exhibited.  In recent months, I've been exploring the connection and implications of employee turnover and resident turnover. The ManagInc Q1 2018 Financial Impact Report shows that the lower the employee turnover in the multifamily housing industry, the lower the resident turnover, resulting in increased NOI. This monetary connection has me looking to successful organizations who proudly display the importance of their teams. Case in point, I've embraced what Sir Richard Branson, of the many Virgin companies, says, "The way you treat your employees is the way they will treat your customers."  Which leads to the question of, "How do we treat our employees?"  Which then leads to the question of culture. What are the norms and expectations of inter-company interactions? If it takes the Accounting Department 3 days to return a frantic Property Manager's call, can we honestly expect that Property Manager to return their resident's call within the mandated......
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Six Ways to Build a Culture of True Corporate Social Responsibility

Six Ways to Build a Culture of True Corporate Social Responsibility
Being a good corporate citizen has always been the right thing to do. But, let's be honest: many companies haven't viewed making their communities better places to live as part of their core missions. Now, however, practicing corporate social responsibility (CSR) isn't something companies have the luxury of doing only when they feel like it. These days, CSR is a necessity. Stated simply, our employees and our residents are demanding it. According to the 2015 Cone Communications Millennial CSR Study, 91 percent of millennials would switch brands to one that is associated with a good cause, given similar price and quality. Additionally, 63 percent of millennial women and 45 percent of millennial men say their decisions about job offers are impacted by the employer's CSR work, according to the Six-Month Research Update to the 2014 Millennial Impact Report, a study conducted by Achieve. So what should a meaningful CSR program look like at your property management company? In summary, it entails much more than a company making periodic charitable donations, although such donations are certainly praiseworthy. True CSR is an all-encompassing initiative to care for employees, residents and the communities in which a company operates. Below are some suggestions on building a culture of true CSR: Offer paid time off to volunteer. Providing employees with paid time off to volunteer for an organization or a cause of their choice is a great way to both help the surrounding community and support the cases that are near and dear to the hearts......
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The Silent Treatment, Overcoming The Just Looking Response

Questions  Imagine a leasing consultant returning from an apartment tour. It’s an apartment with a less than great view, it’s been vacant for 45 days. It’s on this weeks focus “hot” list. The manager asks, “How did it go, did you get a deposit?” The leasing response, “Great, they didn’t even comment on the view! They’re going to get back with me and let me know if they want the apartment.” The manager investigates a little further, “What objections did they have? We’re you able to overcome them, what features and benefits did you use? Challenging the Just Looking Response The response from the leasing consultant is chilling, “They really didn’t say too much, they were just looking.” Chances are the decision on this apartment has been made. The prospect probably won’t be returning. Ask any sales person; retail, automotive,. The most difficult sale to close is the customer that’s “just looking.” When someone is “Just Looking” A sales person:-can’t overcome objections-can’t create a sense of urgency-can’t create interest in features and benefits A skilled leasing professional isn’t going to be content with a “just looking” response. Using Conversation Starters A few open ended questions can change the direction of the conversation-what do you like about where you live now.-what are you looking for in a new home.-is your current home convenient for your lifestyle?-does your closet have enough storage for your shoes? Every person that enters a leasing office looking for an apartment is an opportunity for a twelve month lease. If a prospect isn’t forthcoming about their......
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The Multifamily Executive's Quick Access Guide to Artificial Intelligence

ai-guide-blogThere’s a lot of buzz about artificial intelligence (AI) these days, so much so that it’s hard to separate the reality from the hype. Add to that the fact that multifamily housing (MFH) is typically a technology laggard, and it’s easy to assume that MFH executives can afford to wait a few years to see how things shake out before worrying at all about AI. Yet AI is potentially applicable to any business process that has measurable data inputs and a complex process to get to outcomes that are also measurable—a description that matches many MFH processes. Not surprisingly, AI has been accompanied by a tremendous amount of hype, myth and confusion. To help MFH executives makes some sense of AI, we’ve put together a quick guide on the key areas where AI can (and often should) impact your operation. We highlight: Call Center & Sales Support – Provide specific feedback in real time, based on the caller’s tone as well as the content of the conversation. Marketing – Google (and Bing) don’t want us to be able to reverse engineer their algorithms. Let AI optimize these algorithms for pay per click (PPC), paid social and paid digital platforms. Learn how AI can overcome the complex challenges for customer segmentation for email campaigns and more. Influencing Basic Customer Interactions – Replace unreliable voice-activated personal assistants, associate and resident interactions with more reliable AI-driven chatbots. Let AI handle functions from service requests to much of the initial prospect inquiry phase, learning and expanding its capabilities each time it encounters a......
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California will be Voting on Rent Control in November!

California will be Voting on Rent Control in November!
  On Friday the Secretary of State Alex Padilla confirmed that tenant activists have gathered enough signatures to qualify their state-wide rent control measure for the November ballot. With the fate of the Costa Hawkins Act in the hands of Californian voters, it is vital that rental housing professionals in California be vocal in their opposition.  The Potential Effects of This Rent Control Measure If passed, this rent control ballot measure (also known as “The Housing Freeze”) could: Allow rent caps on properties to be locked in place forever Open the door for rent control on single family homes and new construction Lead to lawsuits, as it unclear what constitutes fair market value Grant new powers to regulatory bodies to impose or modify rent policies – without public oversight Allow proponents to intervene in lawsuits with all their expenses paid by taxpayers – even if they lose While less than 20 cities currently have rent control regulations (with many activists aiming to put a rent control ordinance for their city on the ballot as well), repealing the Costa Hawkins Act would invite local governments to create their own rent control regulations. Owners with multiple properties in different Californian cities would need to be mindful of the differences in rent control regulations (with some cities tacking on “just cause” eviction regulations onto their rent control ordinances) as well. Although multiple tenants’ rights groups believe that rent control can help alleviate the rising rental rates in major metros across California, repealing the Costa Hawkins Act w......
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7 Low-Maintenance Ways to Boost Your Property’s Curb Appeal

  on 7 Low-Maintenance Ways to Boost Your Property’s Curb Appeal These days, most renters find their new home through online listings, not by driving around the neighborhood. However, that doesn’t mean property managers can afford to overlook curb appeal. If your properties fail to impress when a prospective tenant drives up, it won’t matter how good the online photos look. Even property managers in highly competitive rental markets should pay attention to curb appeal. A great-looking exterior doesn’t just get tenants in the door; it also attracts high-quality tenants who are more likely to treat your property with care and respect. Of course, if you’re managing a lot of properties or a single high-density property, you don’t have a lot of time to spend manicuring lawns and flower beds. So how can you create great curb appeal without spending a lot of time? These seven tips show you how. 1. Paint the Front Door Don’t underestimate the impact a fresh coat of paint on the front door can have. A cheery front door can make an otherwise unremarkable home stand out and leave passersby wondering what’s on the other side. A Blissful Nest recommends 10 hues that are perfect for front doors. In a multi-unit property, try painting each door a different, but complementary color to set the units apart. 2. Replace House Numbers Is that newly painted front door flanked by dated, faded, or missing house numbers? Make each unit easy to find by replacing house numbers with a new set that’s easy to read from the str......
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Compliant or Secure?

Compliant or Secure?
Certain industry sectors – such as banking/finance, healthcare, and defense contracting – have government mandated requirements for protecting sensitive information; for example, private healthcare records or export-controlled intellectual property. These industries tend to be serious about investing in cybersecurity measures; because, frankly, if they don’t, they will not be able to operate. Regulatory fines will rain down upon them, reputation damage will ensue, and soon, they will be out of business. Anyone who has been to the doctor lately is probably familiar the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which was designed to help protect private medical data. The law has a Breach Notification Rule that requires covered entities and their business associates to provide notification following a breach of unsecured protected health information. Look at the "wall of shame" maintained by the U.S. Department of Health and Human Services Office for Civil Rights that shows some of the offenders who allowed unsecured protected health information to get into the hands of hackers. Imagine if your business name were on that page. What is brand image and reputation worth to your company? While there is currently no cybersecurity legislation specific to the multifamily housing industry, there is emerging data breach regulation at both the state and federal levels that could have an effect on the industry.  The NMHC/NAA Joint Legislative Program published a white paper called “Multifamily and Cybersecurity: The Threat Landscape and Best Practices” that provides an excellent summation of this regulation. The European Union (EU) has always been ver......
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How Can Cities Address the Affordable Housing Crisis

A few weeks ago I wrote about the prospect of the repeal of Costa-Hawkins act in California.  This measure is being pushed by tenant rights groups claiming it will help with affordable housing.  Although I do believe there is an affordable housing crisis, I do believe that the repeal of Costa-Hawkins  would only be a short term relief and significantly hurt affordable housing in the long term.  So what can cities do to address the affordable housing crisis? Cities have many tools available to them, and if utilized correctly can significantly positively impact the affordable housing market.  It boils down to simple economics, if a developer can build affordable housing, and make money doing so, then they will.  How can cities promote the development?  It starts first with the approval process.  After the cost of land and actual hard construction costs, the time cost and soft costs are the highest expenses for a developer.  The city of Dallas did this earlier last year.  They passed measures to streamline the process to construct affordable housing.  By streamlining local administrative review of plans, and lowering the costs of permits they have made it easier for developers to develop low income housing.  With faster approval processes and lower costs affordable housing becomes that much more attractive to a developer.  Another benefit for streamlining the process is that it minimizes the risk to a developer, and like any other investment development is a risk vs. reward calculation, with lower risk translating to lower demand for r......
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What You Need To Know About Rent Concessions

  on What You Need To Know About Rent Concessions With rent concessions on the rise nationwide we need to have an understanding what giving or offering a concession can do to your property value if not handled correctly. Let’s start with the definition of a rent concession, a concession is any “reduction in price, rent or other benefit provided to a potential tenant as an inducement to lease your property”. There are many ways to give a concession, reducing the first month’s rent, reducing rents for a contracted time or maybe even upgrades the property they are considering ie: an accent wall or upgraded appliances. Your goal should be to have all scenarios have about the same amount of rent paid.  Also, if you can get a new tenant to accept an upgrade to the unit as a concession, it can be even more beneficial to you. What you need to consider as you are offering your concessions is how do these concession affect my long term value of my investment.  If you find yourself wanting/needing to refi and you begin the underwriting process you will find that lenders are interested in how much income an asset is producing and how much income an asset can optimally produce. Concessions add an additional layer to the equation. When underwriting the Net Operating Income of an asset, concessions are typically subtracted from the Gross Rental Income in order to determine the Net Rental Income — which also factors in things like vacancy and unpai......
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What are the challenges in loan approval?

There are three distinct but equally significant components to loan approvals for all investor properties.  The first component is an analysis of the property, the second is a review of the borrower’s credentials, and the third is an internal lender approval of all third-party reports. Step One - Property Analysis In this analysis we are looking at a few separate aspects of the property.  In summary, this would entail a review of the rent roll, income and expenses, the property condition, past capital improvements, and finally how the asset competes in the market.   While it may seem that the most critical issue is current Net Operating Income, the property condition and market factors could affect the forward financial success or deterioration of that NOI.  Providing everything is acceptable, the underwriter now must input these findings into the lender’s own criteria standards and adjust accordingly to derive at the maximum loan amount, best rate and terms, and other conditions for final approval. Step Two - Borrower Review Every lender and loan program will have different standards for what constitutes an acceptable borrower.  In this review we do look at the entity itself, but the real focus is on the principals of that entity.  For over 95% of lenders, a principal is defined as anyone that owns more than 15 to 20% of the entity.  In cases where no one owns such a percentage, the underwriter will instead focus on the managing principals of the entity.   Whether recourse or non-recourse, the review is t......
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