Socialism Finds It's Way to Los Angeles

Socialism Finds It’s Way to Los Angeles
By: Nicholas A. Dunlap, CPM


Aside from the unfortunate circumstances many property owners are facing, now, the owners of multifamily properties in Los Angeles city are facing what could be a moratorium on the dismal increase of 3 to 5% they were once allowed by the city on rent controlled buildings. Citing that many of the residents of these rent controlled apartments had been effected by the economic downturn, Alarcon stated that it was not right for the apartment owners to raise their rent by 3%. So, let’s get this straight: the residents were negatively affected, but the apartment owners who have seen rents decline, expenses increase and elevated vacancy rates over the past 3 years, have emerged from the battlegrounds unwounded? Au contrare, Mr. Alarcon.

The appropriate solution to this issue is not at the expense of the apartment owner. Drive through Hollywood, Mid-Wilshire, Koreatown or Arlington Heights and experience first hand the compromise of someone’s financial return on their investment. Beautiful and historically significant apartment houses, reminiscent of the many stories that Old Hollywood has to tell, and yet you see dilapidated buildings that look bombed out and not maintained. So again, I ask: Why at the expense of the apartment owner? Frustrated over the inability to raise their rents to anywhere near market level and typically resigned to a whopping 5% annual increase, many of these apartment owners avoid improvement projects and maintenance that could make the property more appealing. This does us all a disservice, polluting the hardscape of our city with rundown, brick and mortar ruins.

Using the logic of Mr. Alarcon and other rent control proponents, doesn’t it make equally good sense to approach the residents’ employer and mandate a wage increase so that they can afford to pay higher rent, or, maybe we should approach oil companies and ask them to drop their prices per barrel so that gasoline would be cheaper and maybe, just maybe with those few extra bucks, residents could pay their rent. No, I’ve got it: we demand that restaurants and grocery stores drop their prices on food so that people can eat whatever they want, whenever they want and not worry about what is being spent on food and be able to pay rent? Or maybe DIRECTV will cut their rates or provide discounted cable so that people can still get the Extra Innings MLB package and afford to pay increased rent? See how ridiculous it seems to suggest that a third party pay part of someone’s rent? The apartment business is a for-profit industry, not a social service that subsidizes one of life’s luxuries.

The way our country and California is heading, I should avoid such suggestions. Hopefully Antonio Villaraigosa will be able to talk some sense into him or simply dismiss his notion.

Building Your E-Curb Appeal

Building Your E-Curb Appeal
By: Nicholas A. Dunlap, CPM


The apartment industry has become increasingly reliant on technology. With owners accessing financial information and records from abroad, managers logging details on property inspections and operation from the field and residents scouring the web for move-in specials on their I-Phone and Blackberry devices, it’s safe to say that our performance based, financially driven industry has the tech bug, bad. While there are different levels of sophistication in terms of technological infrastructure, at the bare minimum there are minimal steps you can take to emerge from the darkness and embrace the technological advancement that has, well, dare we say, made our jobs easier? Find these tips and suggestions below.

The Property Portal

If you choose to avoid all other technological advancement in the apartment industry, you should at the very least embrace the property portal. Talk about leveraging your time and effort, a portal is essentially an online look at and into the property that includes specific information on the site and location, professional photos, current rates, leasing information, specials, contact information and forms, maintenance request forms, payment options, etc. The portal serves both current and prospective residents and functions as a retention and marketing tool.

Search engines like it when you include “apartments” in your website name, so, if you own a building named “Palm Villas”, try “PalmVillasApartments.com”. You will rank higher in searches and be picked up by more search engines. In plain English, this means your property is more likely to show up when someone types in “apartments” in a Google search.

E-Analytics

Just like you monitor the ads you place in the newspaper or classifieds, track the overall effectiveness of your online presence by subscribing to services like Google Analytic. Google Analytic will tell you everything you could possibly want to know about the people who access your website, including: location, time spent on site, how they accessed your site (directly or from a link), what they typed into the search engine, etc. Knowing what your viewers input to access your site can help you maximize your marketing dollars by increasing keywords and code in one area and adding less emphasis to the other. Reports can be easily configured so that they can be emailed daily, weekly or monthly depending on the number of websites and advertising campaigns that are active.

Financial Reporting...Reloaded

Let’s face it: money never sleeps! Why not have access to it whenever, wherever you are? Whether it’s an iphone, blackberry or a laptop with web access from out of the office, programs such as Yardi, Quick Books and other Property Management programs are now equipped with modules that allow them to be easily accessed, securely and online. Financial management is the fun part of the business, why not do it at your leisure in your preferred location: yacht, motor home, cafe, plane, you get the picture.

In closing, I should add that I hope to soon be utilizing an Ipad to neatly and efficiently log notes, photos and other details on weekly property walks. More on that, soon.

Wall Street on Contrarians & Commercial Real Estate

Wall Street on Contrarians and Commercial Real Estate
By: Nicholas A. Dunlap, CPM

The Real Estate section of yesterday's Wall Street Journal boasted an interesting headline that fitly described the current real estate investment climate. “Beaten down and bid up” it proclaimed, in reference to the Commercial Real Estate market and specifically the Real Estate Investment Trusts who have been acquiring Commercial assets. Occupancy rates and gross income are down, however, investor demand for these assets typically generates multiple offers and quick sales. As a firm we share this contrarian approach to real estate investment, that is, to buy or invest when no one else is buying.

With interest rates remaining low and capitalization rates on the rise, if you plan to purchase for cash flow and can acquire an asset with cash flow sufficient to your standards, right now is the time to buy. If you are considering an asset that requires a significant increase in gross income to generate your desired cash flow, hold off on the acquisition; true sellers will eventually adjust their expectations.

Read the article in its entirety by clicking here: http://online.wsj.com/article/SB10001424052702304604204575182341492138752.html?mod=WSJ_Commercial_LEFTTopNews

3 Steps to Better Resident Screening

3 Steps to Better Resident Screening
By: Nicholas A. Dunlap, CPM


As a landlord, there are few things worse than preparing a unit for rent, marketing it and ultimately renting it to what turns out to be a problem tenant. However, thanks in part to technology and comprehensive criminal record, credit bureau and other such databases, landlords can take simple steps to protect themselves and their investments, before problems arise. Although no screening procedure is 100% fool proof, meaning that even the strongest applicant can become the worst tenant (unfortunately, I have seen this happen on several occasions) take the following 3 steps to ensure you are making the best effort to protect yourself up front.

1. Do not process incomplete applications. Every one of our resident managers knows that an application lacking previous addresses, account numbers, yes/no answers will be returned to them, or will be denied for being incomplete. The reason? When someone shows you who they are the first time, believe it! If you do not follow simple directions such as “fill out the following application in its entirety leaving no blank spaces or sections unacknowledged”, how will you react when we have to post a notice to perform or quit regarding conditions of the lease agreement. NEXT!

2. Conduct a comprehensive background check that includes credit, rental history, bad check and criminal background details. More importantly, develop a policy that allows you to screen effectively and appropriately in accordance with these background checks. As it reads in our rental criteria, we will not rent to those with a history of crimes against persons, property or involving drugs.

3. Equality and consistency are your best friends. Do not stray from your screening requirements and standards. Refrain from making exceptions. Remember, if you do something for Applicant A, you must do the same for Applicant B. Avoid the personal feelings that can sometimes cloud your thought process. Yes, that means you should not rent to someone simply because “they seem like nice people”. Ted Bundy and Jeffrey Dahmer seemed like nice people at one point or another, I’m sure.

All in all, effective resident screening means having a thorough process in place, complete with pre-established criteria. Local associations such as the Apartment Association of Orange County (http://www.aaoc.com/) can assist with conducting a thorough, comprehensive background check. Be sure that you and your staff are consistent in your business practices and you will be fine. If you have any questions or concerns, there are a number of local law firms to contact, including Landlord/Tenant experts Kimball, Tirey & St. John (http://www.kts-law.com).