Apartment Operations
Insufficient Notice Fee
What is an insufficient notice-fee? Simply put, it’s an acceleration of rent due to giving a notice that does not meet the necessary lease protocol.
I am back for the weekly (save last week – vacation) budget installment. I took some time off last week and ultimately (save a pic post here and there) unplugged. All I can say is – DO THIS. Give yourself three to five days off every quarter and get away from everything. It’s good therapy. So – this week, we are talking about the Insufficient Notice Fee.
Insufficient Notice Fee Defined
What is an insufficient notice-fee? Simply put, it’s an acceleration of rent due to giving a notice that does not meet the necessary lease protocol. For example, Mills Properties requires a 60-day notice before move-out.
Budget Strategy
The Insufficient Notice Fee is a line item that you can budget based on T-12 (Trailing 12 months) information. The frequency is random, so there is a real chance that you could estimate for four based on your trailing information and end up with two or six. You will likely never be precise with this number. In the same respect, you will probably never be too far off.
It’s short and sweet this week. And it’s hot in #STL.
Your trying to keep cool in the 100+ temps multifamily manic,
M
Is Entrata the Product of a Trojan Horse?
Two words – Trojan Horse
Brilliant Word of Mouth
No doubt the word of mouth marketing campaign that Entrata (Property Solutions) is using to bring about awareness is brilliant. It is off the charts – cool.
Check this video out – it’s one of four that are uber-cool.
Trojan Horse
All the brilliance aside, I can’t help but to call a trojan horse on this one. Full disclosure, we are a client of Property Solutions. And, for the record there are very few occasions where I would call a spade a spade publicly. This one just has my gut screaming. It seems that our partner entered into a relationship with Yardi in part (or, it evolved into that) to get a good look at the back office. Not unlike Steve Jobs did when he bought his way into looking at what Xerox was up to years ago before graphical user interfaces entered the mainstream. While Steve spun that to be an okay thing –
I am just not buying it from Property Solutions. One does not have to look to far to get what I mean – take the definition of Entrata for instance:
- (nautical) to board (to capture an enemy ship by going alongside and then invading her)
- (slang) to improve
To capture a Property Management Software System by going alongside (inside) and then invading Yardi… Sorry, improve is likely what they were going for.
Every Property Management System is Lacking
In all fairness – I think every property management software platform is terrible. They all cater to accountants (not to discount accountants – I have some great friends from that world). But, accountants don’t run properties. Sales people, psychologists and craftsman do. There is no Apple about Yardi, MRI, RealPage or any other system out there. They are all complicated, stodgy, aesthetically limp, expensive, slow and they hold your data hostage to a mind numbing degree.
Baseball Jersey
Last week I received a package in the mail. Contents: A baseball Jersey from Property Solutions with Entrata stamped across the chest and the number 1 stamped on the back. And, a letter dripping with edifices and endorsements aimed at juicing me up to write about this new property management software offering.
#gameoff – I was jazzed until the curtain was pulled back and it became apparent that Entrata was in fact a product of Property Solutions. Likely not the post they had in mind and I am borderline apologetic for that. Excepting that the relationship has not been without pain.
Service
Would I endorse this product? Not even on it’s best day. For two reasons. It’s intellectually disingenuous. And, it speaks volumes to the reason our service experience has been less than just bad. It would suffice to say that all hands have been on deck to include some brilliant marketing efforts to get this product to market and the ask for forgiveness machine has been in full affect. That experience is to include an email I sent six days ago asking for some clarification that has gone unanswered.
I can’t help but to use the over-used and abused #fail hashtag for this one. There is a huge difference between being shrewd and just swindling.
Your hoping I am completely misplaced in my remarks so much so that I eat crow for this post but thinking I am not alone in my thoughts multifamily maniac,
M
Apartment Lease Termination Fees
It’s time for another installment of our series on apartment budgeting. Today we are tackling the top of apartment lease termination fees.
Lease Termination Fees Defined
What are lease termination fees? The fee is applied if a current resident decides to break their existing lease contract prior to the lease end date. I have seen the fee vary in amounts – some as low as one months rent and others as high and two and one half times the amount of the monthly rent.
Budget Strategy
The apartment lease termination fee is a line item that you can simply use history to forecast forward. If you collected three of these fees last year, it is fair to say that you might do the same in the coming year. Or, if you have more history to pull from then do so. If you have three to five years of history, go back and consider the number of fees you collected over that time and simply average it out.
Once you have determined the number you have collected, space them out over the course of the year. Feel free to pick your months at random as there is no absolute way to predict when someone might need to break their lease.
Charge and Beware
This is likely the second most contested apartment related fee standing close behind late fees. A quick search yielded more than a few Q&A sites that advised everything from – pay it to challenge it.
The fee is perfect legal and it is agreed to at the time of the lease signing so feel compelled to stand your ground.
Your lovin’ other income multifamily manic,
M
Employee Rent Concessions
This week we are rounding out our budget concession discussion with the topic of employee concessions. People are the difference that make a difference in property management. I would argue that it is not location location location but rather people people people that make or break the present and future value of an asset. You can have the best location on planet earth with the worst people and you are guaranteed sub-par valuation. Relocate that asset to a B+ location and team it with A+ characters and you will have yourself a winner. It really is all about the people. And, employee rent concessions are one way of saying thank you.
Value in Responsive Service
Beyond the concept of reward, concessions can be looked at as incentive for an employee to live on-site. There are clear advantages to owners when an employee lives on-site. It lends well to responsive customer service, especially if that employee works on the service side. As an example, if you have an A/C go out after hours, he/she can provide rapid and responsive service. If you provide lock-out services; the idea of rapid response is a real plus. In the event of a major crisis, employees living on-site can act as first responders in the way of organize and deploying crisis management protocols.
Things to Think About
I have seen this amount vary over the years and is certainly subject to ownership or property management protocols. It typically ranges from 15% to 100% and is credited monthly over the course of a lease term. It also typically carries a caveat in the way of an employee addendum that spells out strict concession payback and move-out protocols if the work relationship turns sour.
The biggest thing to consider is IRS implications. Always consult a good tax attorney when thinking about giving away money as I am certain our great Uncle will want his part.
Your – advocate of employee rent concessions – multifamily manic,
M
How’s My Service?
We’ve all seen one of one of those How’s My Driving stickers on the back of a truck.
They seem to care but do they really?
My boyfriend recently ordered my birthday present online from a popular home and garden store. I won’t disclose the name, but let’s just say it rhymes with Shmowe’s. Anyway, he ordered it through their In-Store Pick-Up service so that he could pick it up from a store near me while he was visiting for my birthday, but when he went to pick it up, it wasn’t there. He was told that someone was supposed to be in charge of calling him to let him know it hadn’t arrived yet, but apparently they forgot, and they would have to call him back Monday. When they didn’t call, he called them, only to continue to get the run around. Almost a week later, the item showed up at his home (in a completely different state than where he had requested to pick it up). The only solution customer service would offer was for him to return it to the nearest store (40 minutes from his house) and have me re-buy it from the store where it was originally supposed to go. Only when he went to the store to return it, they couldn’t access his order in their system and refused to give him his money back. After spending almost an hour in the store dealing with several different store associates and managers, and becoming infuriated, he was given his money back. Needless to say, after their complete lack of help and horrible customer service in dealing with his issue, he would not be re-buying anything from any other ‘Schmowes’ store.
No matter how bad his issue became, not one person was willing to become solely responsible to insure he received call backs and verify that the matter was corrected and the customer was satisfied. Instead, he was given different answers from several different people and given the run around to the point where it ended up losing them two customers (both him and myself), and potentially more because apparently he was not the only person in their customer service line who had issues with their online in-store pick-up program (and of course all of you reading this who don’t want to take the chance of this happening to you).
The point of all this is that I work for Mills, a fairly large company that relies mostly on our site teams to handle property specific customer service issues. However, we recently added a resident relations position to our portfolio for those times when an issue reaches the level that the above mentioned story reached. This person is specifically responsible for getting to the bottom of such issues and working directly with the resident until the issue is resolved. This has become a great asset to our company and I believe that no matter how big or small the company, there should be some type of position similar to this available for customers.
Do you have a program in place to insure that customer issues never get out of control? Any tips on what has been most effective?
