10 Ways to Make Good Tenants Stay

As a landlord, retaining good tenants should be one of the biggest priorities. Good renters make great assets.

The good news is that keeping great renters isn’t too hard. Here are ten things to do to keep good tenants happy and in no rush to move:

1. Respond quickly to complaints about noise or reports of criminal activity, such as drug dealing.

Always enforce rules on noise. If you are aware of any crimes taking place at the rental property, take action immediately. Consult an attorney, or consider hiring a property management company that includes evictions in its services.

2. Schedule maintenance and repairs at times convenient for the tenants, and let them know in advance.

Minimize the impact of repairs and maintenance by scheduling them at the times the renters are least likely to be around, typically between 9 and 5, Monday through Friday. Let the tenants know in advance when repair work is being done, and why.
3. Provide designated parking spots and enforce parking rules.
Having a parking spot with a short walking distance to home is very important for many tenants. Assign parking spots and enforce parking rules. Send warning letters to tenants who break the rules and have their cars towed if they ignore your warning. Also, make sure the parking is well-marked and sufficient guest parking.
4. Follow through on repair requests and other commitments.
It’s simple: do what you say you’ll do. Recognize that all tenants want their repairs handled promptly, efficiently, and predictably. Remember that many tenants are “renters by choice“. They prefer to rent rather than own partly because they want someone else to be responsible for repairs. Have a repair and maintenance process that helps to consistently meet or exceed tenant expectations.

5. Give the tenants advance notice of upcoming inconveniences that you’re aware of.
If you’re aware of upcoming road closures or a planned power outage, consider sending out a newsletter, email, or a Facebook update to inform the tenants.
6. Understand that tenants want to feel safe at home.
Make sure that any outdoor areas used by tenants at night, such as a parking areas, paths, and entries, are well-lit. Keep on top of preventative maintenance and repairs.

7. Make sure all tenants follow the House Rules.

Good tenants are good neighbors. In return, they want the same consideration. They will follow reasonable rules for the property, outlined in the lease. All of your tenants should read and sign a copy of your rules when they execute the lease. Let the tenants know that rules will be enforced, and eviction can be used if necessary.

8. If you are allowing pets, make sure owners clean up after them!

Tenant retention has been shown to improve if pets are allowed, and certainly there are some great tenants out there who are also animal lovers. If tenants are allowed to keep pets, make sure the lease outlines that the tenant is responsible for all pet damages and for cleaning up after the pets. It is normal to require an additional pet deposit or additional rent.

9. Be polite, courteous, and professional.

Recognize that being a landlord requires great customer service skills. When the phone rings and the call is from a tenant who is paying thousands of dollars a year, speak politely and be helpful.

10. Create opportunities to appreciate the good tenants.

Take time to say “thank you” or send thank-you cards when appropriate. Gestures such as these go a long way in making your good tenants feel welcome and appreciated.

Good tenants know they are good tenants, and they expect to be treated that way. It’s worth the extra effort to keep them. Especially when the rent is paid on time and the property is well maintained.

REI Liaison is a full service residential Property Management and Leasing company serving the St. Louis, Missouri area.


by REI Liaison Property Management

Transaction Volume at Mid-Year Trending Lower

Real estate investors have responded to an especially disappointing year economically (i.e., market uncertainty, sluggish GDP growth, and the lackluster job market) by curtailing their buying activity—or waiting on the sidelines entirely. Consequently, transaction volume during 2Q 2012 has retreated back to near the level observed in 3Q 2010. This reverses the trend seen over the last few years, where sales volumes increased throughout the calendar year. If this trend persists over the second half of 2012, transaction volume will come in below last year’s levels. A definite indicator of lukewarm investor sentiment.

Cap Rates on the Rise

Cap rates have been trending slightly upward for office deals and remain essentially unchanged from one year ago for apartments, while cap rates for retail have been declining. Still, cap rate spreads—calculated as the difference between the 12-month rolling cap rates and the 10-year Treasury yield—for all three sectors have been rising (though the spread in apartment and office are rising faster than the spread in retail). Why? Blame the global phenomenon of investor flight to quality and the safety in capital markets for the record-low levels reached by U.S. Treasuries during the second quarter.

Who’s buying what, where

Investors continue to be a discriminating bunch. Apartment deals this past quarter tended to show a preference for high-priced, high-quality assets primarily focused in a relatively small number of primary gateway markets. However, high prices have some investors shying away from buying existing apartments and considering other alternatives, such as development. Office pricing has also become expensive over the last few years, and it’s likely this development along with the fact that economic growth continues to disappoint and uncertainty in the marketplace persists that investor behavior is being affected. Because of the weakness in retail property fundamentals, selection bias is even stronger for retail than the other major sectors, with a select few high-quality properties trading.

Investments in Top Markets Come at a Price

A comparison of the volume-weighted 12-month rolling cap rate for the top 10 markets by transaction volume and the volume-weighted 12-month rolling cap rate for all other markets clearly shows that investors are willing to pay a cap rate premium to be in the markets with the largest volumes. This premium has been fairly consistent over the last five years. Therefore, although risk aversion persists in the current transactions market, investors prefer deals in these high-volume markets during all types of economic environments, not just the distressed environments of today. The top 10 retail markets present a somewhat different picture, however. The risk premium for high-volume retail markets is not only inconsistent; it is actually negative during certain periods, including the most recent quarter. Local factors– the trade area, the economic and demographic make-up of the consumers in the trade area, and often the characteristics of the property itself—are most important. Consequently, investors focus on local factors while less-important metro-level factors will be largely ignored and do not translate into a transaction premium. What distinguishes a top 10 market? Generally, they have better liquidity—they are large, institutional markets with many properties and a large number of market participants. They also have better market fundamentals and economic prospects.





The Year Ahead

Little is expected to change this year, particularly since continued slow economic growth is forecast. Selection bias in the market should remain as entrenched as ever, even with cap rates ticking up slightly. And, with the recovery in fundamentals failing to spur an interest in a wider swath of the market, expect the transaction volume to remain restrained over the latter half of the year.

Source: ReisReports Connie Vitucci

Going Mobile

I came across this article which I think has some good points to it.

Here is a piece of it.

Going Green | American Apartment Owners Association
By Brett D Furniss


What does this consumer love affair with mobile phones mean to property managers? It means we better get in the game in the mobile realm. Regular websites have worked really well for a while, but change has come again. New renters are going to want to use their smart phones to search for rentals near them (aided by GPS), fill out rental applications, pay application fees, and put down deposits. They want the whole rental process available from their mobile phones.

What specifically does this mean? It means we better have mobile websites that allow them to do this; the mobile websites need to include only succinct information potential renters would want when on the go. It also means we need a mobile application (a custom company “app”) that customers can put on their devices so we own some real estate on their phones. Trends show that home internet connections are on the way of landline phones; the new battleground is the mobile phone. We need to be on as many as possible.

A mobile website is critical when consumers search for property management companies from their smart phones. Will yours come up? If it does, can consumers easily find rental homes, contact you (even text you!), and do everything you want them to do (like they can when you see them in your office or when they are in front of their home computer?)

An app is critical to sealing the relationship with customers. How can they remember you when they are on their mobile phones? Your app (with your company logo) sitting with the rest of the apps they use everyday is a good start. This is a good way to build mindshare and also to make it easy for your customers to contact you and refer you to their friends. Not an apps believer? Apps are set to be a $36B business by 2015- a lot of people use them and will be using them!

Change is hard, but the mobile revolution is not going away. If making a property management company last long term is the goal, mobile websites and apps are now “must-haves”!

Course - How to Increase your Fees through Market Analysis

This is a great end of the year training for the real estate professional right here in Dallas, Texas.  Sign up today so you don't miss this 2011 training opportunity.  Be current on the latest market analysis techniques and be geared with the resources to propel your business in 2012!

How to Increase your Fees through Market Analysis
Start: December 15, 2011
Venue: The Colonnade, 5 Star Conference Center
Phone: 214-638-5525
Address: 15301 Dallas Parkway, Addison, TX, United States, 75001

Price:
Two Day 15 Hour Courses – $185 Member / $200 Non-Member
How to Increase your Fees through Market Analysis – $135 Member / $150 Non-Member
Legal & Ethics – $90 Member / $105 Non-Member

Registration:
PDF Registration Form

Course Information:
Location: The Colonnade, 5 Star Conference Center
MCE Parking Information & Directions

Instructor: Alex Johnson, CCIM

Course Content:
• Why is Market Analysis necessary
• Market Analysis Tools & Resources
• Components of Market Analysis
• Site Selection Case Study
• Tenant Representation Case Study
• BRING YOUR LAPTOP TO CLASS (FREE WI-FI)

3rd Quarter Real Estate Progress & Update

Recovery is progressing at different rates for various sectors despite slow economic growth. Apartments are still doing well, Office vacancies are declining slightly, and Retail vacancies are moored at 20-year highs.

Fears of a second recession have receded somewhat, but all eyes are still on Europe and on some aspects of the domestic economy.

Vacancy forecasts are largely unchanged since early 2010. Expectations have ratcheted downwards, however, for the most bullish rent growth forecasts.

Apartment Market Summary

Third quarter data shows that national vacancies fell by 30 basis points, from 5.9% to 5.6% as seen in the chart to the left. The apartment sector posted positive net absorption of roughly 36,000 units; this is a pullback relative to the first half when net absorption averaged around 43,000 units.

Although both asking and effective rents have increased for seven consecutive quarters, it now seems apparent that the most optimistic 2011 forecasts of between 4 to 5 percent national rent growth will not materialize for the year.

Office Market Summary

We should not deemphasize positive developments that show that the health of the office sector is improving. Completions rose in the third quarter along with rents increasing fairly consistently over the last four quarters.

Vacancies continued to decline, falling by 10 basis points from 17.5% in the second quarter to 17.4% in the third. Occupied space rose by roughly 6 million square feet, with positive leasing activity speeding up relative to the first half of the year.

Retail Market Summary

Retail vacancies remained stubbornly high at 11 percent in the third quarter, moored at a level unseen in two decades. We expect a modest rise in vacancies by the end of the year to 11.1 percent, and the only reason why vacancies haven't risen even more is that completions have essentially dried up.

The pace of deterioration is slowing, even when one examines figures across metro markets. Pockets of recovery continue to manifest showing relatively robust increase in year-over-year growth however; national figures have yet to consistently show heartening results.

Courtesy of REIS Reports

Cap Rates - Trending Downwards

Here is a quick look at the trends on apartment, office and retail.

Investors have been paying premium prices for trophy properties in gateway cities, and this accounts for much of the downward trend reflected through the current pe

riod. The last six quarters, though representing a bit of an upswing relative to the lows of 2009, are certainly still subject to selection bias since transaction volumes are still less than 30 percent of 2007 highs.

The real question is whether the current economic sentiment will lead investors to shy away from commercial real estate properties, or whether it will benefit trophy properties even more as they – much like gold or the Swiss franc – are perceived to carry even greater safety amidst turbulent times.

For more information, go to ReisReports website.

GSA's Reform on Office Leasing

For those who are familiar with the U.S. General Services Administration (GSA) leasing process, you will find GSA is making considerable changes to make it easier on all parties involved.  Please read on...

Looking to bring its leasing procedures more in line with market conditions and correct inconsistencies with market practices, the U.S. General Services Administration just released its final Lease Reform Implementation Report.

According the GSA, the process of offering to lease space to the federal government differs so much from the process in the private commercial real estate sector that it discourages many building owners or developers from offering space in their buildings to the government. In particular, the GSA report identified such problems as:

• The length of time it requires to conclude a lease from end to end;
  
• The high cost to offerors to compete for GSA leases;
  
• Delays and inconsistencies in the requirements development process; and
  
• The detrimental effects that holdovers and extensions have on lessors' abilities to refinance or sell their GSA-occupied buildings.

The report links these issues with a lack of response from the open market, and limited offerings translate into higher rates, the GSA has said.

The reforms are important to the market given the amount of space the GSA leases across the country. At the end of FY 2010, the GSA lease inventory rose to 191.4 million rentable square feet consisting of 9,285 leases in 8,094 buildings.

The largest share of the inventory by lease count - 82% - is vested in smaller leases, up to $500,000 net annual rent (total rent less operating expense rent). These leases account for only 30.2% of total square footage and 24.4% of rent.

Conversely, leases in excess of $1 million net annual rent represent 9% of the lease count but 56% of the square footage and 61% of total annual rent.

GSA's reinvention seeks to "streamline, standardize, and simplify" the process for both large and small leases, and thus the results could signal major beneficial changes for all concerned.

"The final report and the associated Leasing Desk Guide provide the details on the much-anticipated GSA leasing process overhaul that has been underway for the past 18 months or so," said Darian A. LeBlanc, senior managing director, Government Services Group of Cassidy Turley in Washington, DC. "My initial impressions are that the changes are more than superficial and provide some much-needed streamlining to the federal leasing process. The modified process and lease forms will be comfortable and 'user friendly' to those familiar with past GSA practices.

GSA will gradually pilot their new process to the real estate industry over the coming months to identify possible improvements and troubleshoot potential problems.

"The older process will still be used, in parallel, for most lease procurements during this period. Eventually the new process will become the standard," LeBlanc added. "There will be a learning curve, but otherwise I don't see many negatives to the new process. It certainly can't be any worse than the current process."

The GSA hopes to have some of the changes in effect soon. Others, such as those requiring statutory changes, will take longer.

GSA's includes many aspects that are GSA-internal, such as establishing teams and sub-teams for different aspects of review and follow-up, but many of the aspects are directly related to how the private sector will compete for GSA leases. Some of the more interesting proposals include the following.

• The simplified lease model for leases up to the SLAT (Simplified Lease Acquisition Threshold), currently $150,000 net average annual rent;
  
• A petition to increase the SLAT to $500,000;
  
• Applying industry space measurement technology consistently by specifying ABOA (ANSI/BOMA Office Area) as the GSA standard for the area where people and furniture
  are housed;
  
• A "one and done" acquisition plan, no longer a living document that must be revised; and
  
• Adoption of the Master Format standard for costing and pricing tenant improvement construction costs.

Adjusting lease terms is also up for major changes. GSA has traditionally negotiated a 10-year lease term with five years firm, providing the government with termination rights any time after the fifth full year of occupancy. The rest of the market, typically signs 3- to 5-year leases with the right to renew for additional periods at the end.

Under the new plan, GSA is examining the cost impact of termination rights. Among other options the GSA will consider is allowing for longer firm terms beyond five years (6, 7, 8, 9, or 10-plus years, not to exceed 20 years firm). These options would enable lessors to arrange better cash flow for financing, GSA to better manage project workload, and customers to lease space according to true need. If the Simplified Lease Model is used, the standard default for leases with terms of five years or less will be firm, with no termination rights.

CoStar Group http://bit.ly/m4gRkE