Apartment
Apartment Budgeting: Legal/Collections
We are working out way down the Other Income vertical in our budget series and today we are going to explore Legal/Collections.
Legal/Collections Defined
These are charges that are assessed back to residents for attorney’s fees and or fees associated with collecting outstanding apartment related debts. That is to suggest if you hire an outside agency to levy and or collect debt on the behalf of your apartment community, then you can and should charge it back to the resident. And, the legal/collection line is where you would book that income.
Budget Strategy
This is another line item where the use of history as the best dictate is likely the best practice. There is no real way to determine exact velocity or exact amounts to budget. In the absence of that precision – it would be best to pull your last 12 or 24 months trailing and come up with some averages.
Your wishing for a cool-front to roll in multifamily manic,
M
Student Concession
We are continuing our budget discussion this week with another short and sweet concession entry. Student concessions are used to attract those who are pursuing advanced educational opportunities at schools or institutions around your apartment community. This is a way that apartment operators can both attract and retain students in addition to giving them cause to talk about you. It’s all marketing all the time.
Concessions or Discounts
As an item of clarity – a concession is not a discount and a discount is not a concession. Both impact the bottom line but one lives on while the other has a one time impact. Student concessions are typically given up front at the beginning of the lease and or at the time of renewal. They are considered a one time event whereas a student discount is some that lives on over the life of the lease. Example of a concession might be: $200 off of your June rent if you move in by June 10.
A student discount on the other hand is a rent reduction from the market rent over the course of the lease. Example: you give a 5% or flat dollar amount discount off the market rent rate for the term of the lease that you sign if you move in by June 10. Both have an impact on the bottom line and both have a potential opportunity for you in the way of marketing.
Your – continuing the budget journey – multifamily manic,
M
Obvious Belief in your Apartment Community
This is a shout out to all of you hard-working, trust gathering, relationship building conversationalist apartment leasing people. It seems obvious that you are the people who put the heads on beds in apartments all over the country every single day of the week. You come in early, stay late and do whatever it takes to get the job done. You are the difference that makes a difference when it comes to leasing and selling an apartment. And, what is that thing? What is ‘that thing’ that makes the difference? It’s an obvious belief in three things.
Obvious Belief in your Apartment Community
Nothing novel here. You have to believe in the apartment you are selling. Now you might ask, what if I am selling a C class apartment in a C location; that is different, right? No. It’s no different and my suggestion is that if you can’t believe in it – move on. As I see it, you are cheating three people out what they deserve if you stick around. You are cheating yourself as you will never be happy. You are cheating the company as you will never give them 100% of what you are capable of. And, worst of all, you are cheating the people who are really interested in leasing an apartment from you. Key: Get an Obvious belief in your apartment community.
Obvious Belief in your Neighborhood
Tell them how much you are moved by the neighborhood. People want to know what there is to do around where they live. They not only want to know which pub serves the coldest cold one; they also want to know the name of best bar tender. They not only want to know the best restaurant; they want to know the name of the best server and the chef. They want to know the name of the cleaner that gives top-notch service. They want to know the name of the intake specialist at the local elementary school. Do you want to differentiate yourself? Key: Get out and learn anything and everything you can about the people who give personality to your neighborhood.
Obvious Belief in Yourself
It’s people who make all the difference in this world. It’s YOU. It’s ME. It’s our friends, family, neighbors and those we would do business with. Key: You have to be comfortable in your own skin. Confident in your convictions. Convinced by your actions. And, Courageous in your opportunities. It is possible to fake it over a near term but over time even the best placed guards crumble. Be real and be real good. It is then that selling your apartment community, the neighborhood that surrounds it and you come across as an authentic need to serve the needs of others. And, that my friends sells all day long…
Your – believing in you – multifamily manic,
M
The Customer is the Hero
“
Make the Customer the Hero” – Ann Handley
Finding ways to make the Customer the Hero never was and still is not difficult. It is not some over the top mysterious ‘wish we could figure that out’ chaos math problem. No – it is much easier.
It is the please, the thank you and the “I don’t know but I will get back to you” follow through. It is the pausing long enough to assist with heavy bags, taking time to clean cigarette butts off of their sidewalk and taking time to make sure the bathrooms in your clubhouse are clean throughout the day and not just at the beginning. It is keeping your word when you tell someone you will do something. It is remembering to say a kind word or send a nice gift on a birthday, anniversary or holiday. It is remember to ask about their children’s activities, struggles and successes. It is majoring in the minors for people without losing site of the bigger picture. It is taking – Time.
The trouble most of the time is understanding origin. That is, where does that ‘making the customer the hero’ mentality come from?
The Hero Lies in You
I think the late great Whitney Houston said it best in the song There’s a Hero – in the song there is a lyric that sings like this …and, the Hero Lies in You. There is a hero that lives in all of us and he/she is right at home helping everyone around them feel like a Hero too… And, guess what – 100 times out of 100 times when you make someone feel like a hero – you feel like one yourself….
Your, remembering the hero inside becomes the hero outside – multifamily maniac,
M
Realfacts Q4 data
NATIONWIDE DECLINE IN RENTS
Posted Monday, February 2, 2009 by Realfacts
The release of the Realfacts 4Q08 data provides the first comprehensive
assessment of the rental market in 2008.
Renters looking for an apartment at the beginning of 2009 will have more
choice and be able to get a better value for their rent money. A study of
nationwide rents just released by Realfacts, the Novato data specialists
who are marking their 20th anniversary, shows that rents declined in
nearly every MSA in the country between September and December of 2008.
The year end survey found the highest rate of decline in Miami-Ft
Lauderdale FL (2.4% in the 4th quarter), Riverside-San Bernardino CA
(2.4%), San Jose CA (2.0%), Oxnard‐Thousand Oaks‐Ventura CA
(1.8%). Rents also went down by 1.6% in Orlando, Phoenix, and Los Angeles.
Nationally, the average rent for an apartment once again dropped below
$1,000 declining from $1002 in September to $993 in December.
The decline in rents was matched by a decline in occupancy. The occupancy
rate for apartments in the United States dropped to 92.2% in December,
down from 92.9% in September. That decline in
occupancy meant that 10,000 apartment units were vacant as the year
closed. The Realfacts survey covers an inventory of nearly 3.2 million
units of rental housing in 60 MSAs. In 2008, only 9,248 units
were added to the supply. This compares to an average for the previous ten
years of about 65,000 units per year of new construction.
The decline in rents and occupancy is certainly good news for renters. For
people who have invested in income property, the news is less welcome. In
essence, while income from rental property remained flat in 2008,
inflation drove costs up by 3.85%. This gap is reflected in a smaller
number of sales transactions during 2008. The Realfacts database shows
just 386 sales of apartment complexes larger than 100 units, which is
about one third of the previous three year’s volume.
This data for 2008 indicates that the year’s widespread economic problems
have finally affected the rental market by the end of the year. The choice
to invest in income property for the last several decades has been based
on the assumption that rents would continue to growth. In 2009, investors
are likely to evaluate rental properties based on current income alone.
via an email I received today.
