Sharing

I started this blog to share information, which is a passion of mine like property management.  I appreciate all the hundreds of comments and emails I have received from friends in the industry.  Many from those I have worked with, and many new friends I have met through Multifamily Insiders, Linkedin, and other sites.  Being the best I can be and seeing others be their best is what it is all about.  Sharing information, stories, and new methods of addressing how we do our jobs is extremely exciting and rewarding.  I have posted about leadership, budgeting, fair housing, marketing, and other topics, always with the intent of having others find "take-away's" from what was included.  I recently received an email from someone who reads my blog, and would like to share a couple of comments.  Yes, I found them gratifying as well as inspiring to continue what I do.  Here is what she said:

"I read your blog today, and could not stop at just one topic.  Your comments appear to be heartfelt and inspirational, and for the first time in a manner I could really relate to.  So many times we attend educational events or seminars that are directed at inspiring us, only to return to work the next day not being able to relate to what was said and therefore not retained.  I found your blog after one of your students at a CAM class recommended you.  She told me how you delivered a topic most managers don't think of as important, and made it interesting and memorable.  From your blog page and writing, I can see why she said that and recommended you.  She also said she learned more from your class in one day that what had been given by her company in four years as a manager.  Please keep writing and I will keep reading as well as sharing your site with others.  I appreciate what you are doing and taking your valuable time to share with others out here in the real world.  If only my regional and others in the organization would take the same perspective and desire to share as you did, we would all be better at what we do."  Reading a posting in Multifamily Insiders and another one in Apartment Professionals Network from Apartment Home Living in Linkedin, comments drifted into making employees feel important and therefore they will make their residents feel important.  We discussed attitude, training, and a host of topics focused on how we can get our team members to pass on that importance to our residents.  I feel one of the highlights and key points was when "attitude" was brought up.  We can train for many areas such as closing, fair housing, etc., but it is impossible to train for attitude.  That comes from the environment they work in and the leaders that lead them, building an attitude and desire for success.

Keep sharing, keep learning, and keep inspiring others to exceed and excel.  That my friends will bring you success beyond your wildest dreams, and the rewards will touch your heart in addition to your ability to be successful.  Share the wealth!

Market Analysis

As property managers, one of our responsibilities is marketing.  How do we get out message out to potential prospects, what do we say to entice them to call or visit us, and what mediums do we use?  These are all points we have to consider, however, one critical point is often overlooked...understanding who we are marketing to.

Before you can decide on a medium, enticement line, or any other consideration we have to understand who our residents are and who our prospects are.  Analysis of our target market is more than just price point, and for any community we have to consider a host of variables.  These include:

1.  Yes price is a factor, therefore who can afford our apartments?  If our guideline is normally three times rent to income, what does that equate to?  As an example for an $800 per month rent that comes to a base income of $28,800 or someone that makes approximately $14.00 per hour (if you look at a 40 hour work week that equates to 2,080 hours per year).  If your guideline is higher or rents are higher, you can do the math to find out who you should target based on price.  The first question is what jobs pay that would meet your minimum income standards?
2.  Where do people work and what is the average travel time in your market?  Are there geographic or topographic considerations such as rivers, mountains, or even toll roads that people look at in getting to primary work areas?  While you have three different market areas within any major market (primary, secondary, and tertiary), how do trends within the market related to these considerations as well as public transportation play a part?   A downtown mid-rise compared to a rural three story walk-up community will look at marketing very different just based on what I call "behavioral" patterns of living. 
3.  Is there an primary age range that seems to fit your community better or a range that has already been identified as through years of establishment?  Do you cater to an older clientele based on the location or seasonal nature of the market (here in Florida we have many senior communities)?  Is your community designed and built with more "new age" design and amenities where you might target a younger and more professional resident? 
4.  What amenities, resident activities, appointments or other considerations that identify with any market segment which can help attract prospects to your community?  This also includes anything from stainless appliances to floor covering, garages, and other features as well as square footage and storage space.

Next you need to complete an analysis on what marketing mediums you have available, what your budget is, and how you can get your message to potential prospects.  Is your target more "technology" savoy and you need to focus on electronic mediums more than print?  Maybe your target is "seasoned citizens," who based on generational studies still want a guide they can hold in their hand.  Maybe you need to have a combination of mediums to attract the highest number of qualified candidates and maintain maximum occupancy.  So many choices and decisions, and a limited amount of funds in my budget.  So now what do I do?

This is where analysis of the mediums comes into play.  Once you have identified who you need to get your message to, how do I do it?  If there are three print publications in my market, which one is the best choice?  First, never assume the one you have always used is the best choice for your community.  I have had managers tell me the issue with occupancy is the market, when in fact it was the "marketing" that was the problem.  Remember, with all the mediums and communities...your prospects have choices!  Any one of the publications will tell you why they are the best.  Any one of the internet sites will show you graphs and charts as to why they are the best.  I have never heard a sales rep say, "You know what, I think you will do better with the Apartment Factor rather than our publication."  Ain't going to happen.  You also must understand markets and conditions will change, just as what each of the medium suppliers has will change compared to the competition.  We live and work in a field that is constantly evolving, therefore our marketing needs to be evaluated constantly to make sure we are spending our money wisely and productively.  For example when choosing a print publication the following should be part of your analysis:
1.  What is the distribution and how often is the publication updated?  Are their distribution racks at locations that "hit" your target market?  I once had a print representative tell me they had "x" number of print racks in the city.  Problem was they were not at productive or easily viewed locations, not in markets that were within the target market, and I could only change the publication information in my ad quarterly versus monthly.   She showed me how thick her book was, however, when calling other competitors and looking at our stats they were not the first rated medium. 
2.  What backup marketing such as internet resources come with the print, and are they productive.  Yes I need to be in a print publication, but my clientele also are "techno savoy."  Therefore I need a publication that is strong with hitting my target market with the publication, but also need to see them at the top of the search when I Google, "Apartments Orlando," as an example.  Try it and see where your internet marketing provider comes up? 
3.  How "eye friendly" is the publication.  Is there a place for a map?  How much bullet point space do I have?  Is it easy to find by sections of the city?  How user friendly is it including size and ease of use? 

Last point is related to the financial part.  Since I have pages more in my head but limited space, I'll get into "internet" marketing in another piece.  That will take up an expanded posting just with the changes that are happening with that medium.  So, back to financial!  So I have limited funds, where do I go.  If you are confident your leasing staff is doing their job, review the stats for where your traffic is coming from.  Next, review your ad and content to insure you are confident you are getting your "target message" across.  If you are in two publications, which one produces more and why?  Call your comps and ask them how many leases on average do they get from XYZ Publication?  I like using leases versus traffic because that's what it all boils down to.  If I get 50 visitors a month from a publication but only 10 were qualified, something is wrong.  It's not traffic I want in the door, it's what I call "leaseable" traffic.  Leases are the only thing that puts money in the bank. 

Final point is not being afraid to ask your owner or upper management for funds to expand your marketing as long as everything else is in check (message, medium, leasing team, etc.).  I know, they will say it's not in the budget.  Neither is lower income from lower occupancy so look at it this way.  I have a saying and that is, "hit them in the wallet and their hearts and minds will follow."  Basically you have to "sell" what you want, not just ask for what you want.  Mrs. Owner, if I could increase income by $4,000 per month (5 leases at an average of $800 per apartment) while only having an $800 a month expense offset, would you consider it?  Now you have their attention.  Show them your complete analysis, how you got to the numbers you did, the study you made, and the expected result based on your analysis, and they will find it hard not to approve the expense.

Until next time when we'll hit our "technology" side of marketing.  Make it a great week and lease-em-up!

Checks and Balances

Now most people would think this talks about accounting or your checkbook.  Others might think it has to do with keeping a balance on life or what you do professionally.  As property managers we work with finances and deal with many areas.  Sometimes we focus on the balance sheet or financial report and are slow to make changes, not really understanding or analyzing things like how some of the numbers impact the bottom line.  When we see occupancy income, concessions, and in particular bad debt, what does it mean other than just a set of numbers?  It can mean the difference between cash flowing and meeting goals or not.  

Tied to these financial areas are two important aspects including the applicant checks and the handling of unpaid balances.  We have many options when it comes to resident screening, most accessing the same information to provide your data.  We also need to take into consideration there is a delay between when negative information is provided to the credit agencies and when it will show up on an account, which includes late payments, judgments, evictions, etc.  Approval, conditional, and denial parameters can be set with any of the software programs, which provide guidance in reaching your decisions.  One of the most useful technology changes we have had over the years is having these systems, which takes subjectivity out of the approval process.  In the past we received a credit report from one of the reporting agencies (Equifax, Experian, TransUnion), looked at the data, and made decisions with many variables to consider.  Today the variables can be programmed in, providing for a better handling of Fair Housing issues as well as a way to set and track scoring as markets and the economy changes.   In addition to Fair Housing and the data tracking, many other tools such as "what if" scenarios are available...but seldom used.  A recent conversation with a property manager brought up the first part of this topic, the "checks" aspect.  She said her corporate office set all the guidelines and "what if" or other database information was not reviewed with her regional or anyone from corporate.  She basically said, "I've been told it wasn't my job!"  My response to her was, if no one else is offering why don't you ask to review and provide input.  She indicated they were recently seeing more conditional and denial responses, her occupancy was being challenged, and she basically felt the blame was on her.  Not the first time I have heard this coming from a site manager, and probably won't be the last.  She had called me as she felt her position was in jeopardy, and since I was no longer her regional (which we used to review and revise based on her recommendations when we worked together) this aspect of oversight had been taken out of her hands but not the responsibility.  So let me understand this correctly, we want to hold them accountable but not give them the responsibility that goes along with it!  I politely told her to approach her regional and if she did not get anywhere...she might want to give her resume a review.  The ease with access of this information so you can monitor and evaluate (being pro-active versus re-active), the rapid ability to make changes because of technology, and the ability to use the tools available are what makes these systems so great.  The other thing I hear managers say is they may review quarterly and make adjustments, even though market conditions as we all know can change weekly.  Unfortunately in our changing environments and quickly changing economic conditions, by the time you make the changes it is too late.  What we would have given for these tools to be available even fifteen years ago, and to see them not being used to their fullest is shameful.  

The other part of this is the "balances" aspect.  We all know the job market is let's say "challenging," and this is not to mention with higher gas and other expenses the trend seems to be witnessing higher evictions and collection issues.  The days of "promise to pay," or payment plans I believe have ended.  Once someone is in financial distress, looses their job, or simply does not budget and manage their finances well, the handwriting seems to be on the wall.  Four areas of prompt response and action are critical to minimizing bad debt, however, we appear to have conditioned our management teams to stay with the old standard ways of handling.   

1.  Review the application and credit report for credit card data.  Managers may ask a resident who is late when they can pay (with promises that many times go unfulfilled), and of course send the "legal" notifications as required by state statute and company policy.  Those legal notifications and policies should continue, however, in this day and age we need to look outside of the box and maybe look at the credit information.  "Mr. Smith.  As you may be aware to handle this from an equable position as well as from a legal standpoint, we do not have any options other than what is being done.  We often find residents have options they have not thought of and that would be to use credit card resources in challenging times to bridge their situation.   In reviewing your file, we see you have open credit card lines which may be able to assist you in avoiding necessary legal action."  Also asking if they have relatives or anyone that can assist them is not out of line.  This also many times diffuses some of the tensions as landlords (those evil people), and lets them know we are also looking at all solutions and not just the legal solution.  

2.  Process all necessary notices and file or submit for legal action consistently in the shortest time possible.  Waiting a few extra days sets precedents, which also can have legal ramifications, and sends a message to other residents that it may be ok to not pay your rent on time.  This delay can also raise Fair Housing issues, which you do not want to deal with.  Being selective on who you file on because "Mrs. Smith is always late but she eventually pays," can also bring about litigious concerns as well as fiduciary ones as representatives of an owner.  Collecting money is part of what we do as property managers, and while it is not the most fun thing to do it is our job.  Don't like it...find another profession.   It is also a proven fact the sooner you turn or begin collection efforts, the better you have a chance of collection. 

3.  One of the frustrations I hear from managers is by the time a judgment is posted through the court system to the credit agencies, the non-paying resident has already found a new apartment.  The Fair Debt Collection Practices Act does not state you cannot turn over money owed to a collection company before you get a judgement, which can in turn report the amount owed to the credit reporting agencies.  Make sure your documentation including lease allows this, as well as any state statutes are not preventing you from moving forward with legal action and allow for this type of action.  Just be reminded, if you turn over to a collection agency you will owe them a fee if they collect.   

4.  Don't be afraid to ask for the apartment back if they say they have no options and will not be able to pay.  Give them the benefits, which do not negate your ability to seek the money through collection efforts.  You may find several benefits here.  (1) You mitigate the bad debt on your financial.  (2) You can get the apartment back to turn and get ready for a "paying" resident. (3) You avoid legal and court costs which in many cases you cannot recapture.  

 

Many managers I find do not look at the options they have and how to handle outside of the ways things have always been done.   I urge leadership to give them responsibility, encourage out-of-the-box thinking, and work smarter and not necessarily harder when it comes to financial and other management/leadership issues. 

Fair Housing

One very important aspect of our responsibilities as property managers is compliance with fair housing.  Having attended many educational events related to the topic, I find it interesting as to how this subject is usually taught.  For some reason instructors and course leaders teach by what I call "intimidation" rather than through education.   Almost all of the teachings are telling our teams what we want them to avoid, rather than teaching them what we want them to do.  I relate this to a simple example which I believe is relevant.  If our property personnel are concentrating on the negative and constantly looking over their back, will their efficacy be diminished in reaching goals and objectives in front of them?  I believe the answer is yes.

I have also found in my studies and teachings that over 80% of our teams cannot tell you what the seven protected classes are, and this includes upper management.  If executives and upper management don't know, how can they effectively lead others in any area so important.   How many of you can state without beating your head against the wall or guessing, what the classes are?   I rest my case!  If our team members don't know the classes, they cannot fully practice fair housing and therefore increase the chances of a violation.  Again, can't hit a target if they can't see it...or don't recognize it as a target! 

By presenting what we want our people to do rather than what we want them to avoid, we serve the same purpose while keeping them focused on the target in front of them.  We tell them how lawsuits, fines, HUD and other pitfalls can expose them and their organization, and focus on what ramifications are if they are in violation.  Basically we "scare" them into what they need to avoid from a fair housing standpoint not what they should be doing, again keeping them looking over their shoulder rather than forward.   While violation action can be scary, I believe there is a very different way of presenting this topic.

1.  Give them examples they can relate to when it comes to fair housing.   Professional trainers know if you can provide relative information and present it in a manner people can relate to, they will retain it.  The term used is cognitive recognition where our minds understand something because it provides a conscious awareness of it.
2.  Instead of an annual refresher, condition your team of protected classes with subliminal reminders.  This might include simple reminders at the bottom of emails above your address information.    It also includes occasionally asking at site visits of ALL personnel on a site the classes are.  Almost 96% of my research shows service has no clue what they are either, even higher than our office staff.
3.  Be gentle in reminding some of the pitfalls, and don't use intimidation as a training tactic.  As an example asking a leasing person how something could be perceived if I offer refreshments to one person and not another.  Remember, most fair housing complaints are based on "perceived" treatment making it more subjective than objective.
4.  Ask for their experiences of how they feel they may not have been treated fairly.  This could be related to job, shopping, customer service, or other areas.  Their experiences and feedback again provide relevance to that perception factor in fair housing.   Remind them also that treating others "fairly" is only part of the picture, as the word "equal" is also part of what we do.  Sometimes people try to distinguish between the two, with either one of them being considered in fair housing.   We cannot assume corporate knows Fair Housing either.  Many CEO's, CFO's, and COO's have never run a community or even been in a position of regional manager or VP.  This is especially true of those working on our web sites and someone that might be in the position of CIO (Chief Information Officer).  Very recently I was looking at a position with a company as their regional manager and doing my homework as I always do.  At one of their property sites they had listed the application fee was, "$25 for single and $50 for married couples."  Does anyone other than myself see how this is a direct violation of familiar status?  I found another site while doing some consulting work for another company where they stated, "we do not allow pets so don't ask."  Not only was this a very unprofessional way of saying something, it also could turn away someone with a service animal where they may think this could be construed as discriminatory. 

Fair housing is basic and not complicated.  Treat everyone with "respect," "dignity," and "kindness," and you will be in compliance.  We all have the right to be treated fairly and everyone wants to be treated equally.   Give them a target they can understand and see, and they will hit it.

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It's about people

In this age of technology we expect everything right now and it to be error free.  Other expectations include communications to be immediate, everyone to be understanding, have cognition of others emotions and feelings, and Lord forbid don't forget to respond to my Facebook posting or tweet.   We have transitioned into an age of computer animation and computer graphics where it is becoming hard to distinguish between the real and make believe.  Today schools give our children laptops where then can Google the answer, instead of using their mind to search for the information and learn along the way.  Using a calculator in Algebra class is common place, where before determination and methodology expanded horizons because we had to think about how we attained the answer.  Try calling any major company without getting, "Press one if you want to do this, or press two if you want to do that," and you'll wear the numbers out on your telephone keypad just trying to get someone to listen to you.  Our world today is in bits and bites, and our lives have somehow become stranded in the sequence of programming data and removed us from the basis of who we really are...people.

A resident has a problem or a guest has visited and given us an email as part of their contact information and what do we do, we take the easy way out.  I'm waiting for the day when a guest card asks for their Twitter information and we will only communicate in a few words or letters and have to go to things like IYRWAACM.  Ok, for those of you that didn't get that I said, "If you really want an apartment...call me."  When did we stop dealing with people and forget the cell phone, email, twitter, and computer does not care or make decisions on where they choose to live?

I was visiting a community the other day and actually heard a leasing person say after a potential resident  had just left, "I don't know why she would not give me her email. Now I have to call her!"  I was visiting this community related to some market research I was doing, however, wanted to walk over to her and give her the V8 pop on the head.   OMG, she's going to have to actually have follow-up communication with her which may not be the standard form email she was used to sending out, and maybe have to re-sell herself and her community.   

Could it be we are not reinforcing the basic "people skill" essentials and therefore "dumbing down" our team members, which in turns hurts both our lease percentages and renewals?   We are taking for granted basic communication elements which I believe our residents and prospects really want.  Those elements include to be able to speak with a real live caring human being and not have to press a number that takes them to resident service hell, and to be listened to and not just communicated to.  Ok, call me old fashioned!  The same people who want all this instant stuff are the same ones today I hear complaining about not being able to talk to a real live caring human being.  Maybe, just maybe, we need to go back to the premise that people should be put back into the equation.  After all, try getting your smartphone to physically sign a lease or renewal.  It still takes a person (Webster:  1. Human being, 2. Human body)  to make the decision and pick up the pen.   It's all about people!