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March 2013

COLORADO

DENVER METRO • COLORADO SPRINGS • BOULDER

Vol. 5 Issue 3

MONTHLY CIRCULATION TO MORE THAN 7,000 APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL

Apartment Industry and Residents Contributed $1.1 Trillion to the Economy

Housing Starts Down on Typical Multifamily Volatility; Permits Hit Four-Year High

“The Trillion Dollar Apartment Industry” report examines the industry’s total economic contribution

Due to a double-digit dip on the typically volatile multifamily side, nationwide housing starts declined 8.5 percent to a seasonally adjusted annual rate of 890,000 units in January, according to newly released data from HUD and the U.S. Census Bureau. Meanwhile, issuance of permits for newhome construction rose 1.8 percent to 925,000 units – the quickest pace since mid-2008. “Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product,” noted Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “We expect this progress to continue through the spring buying season and beyond, with credit availability and poor appraisals being the primary limiting factors.” “Today’s report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multifamily units,” noted NAHB Chief Economist David Crowe. “Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-anddown swings that are often associated with that sector.” In January, single-family housing starts were virtually unchanged from an improved pace in the previous month, registering a 0.8 percent gain to 613,000 units. This was the strongest pace of single-family housing production since July 2008. Meanwhile, multifamily housing starts, which tend to display significant month-to-month volatility, declined 24.1 percent to 277,000 units. Regionally, combined single- and multifamily housing production gained 4.1 percent in the South and 16.7 percent in the West, but fell 35.3 percent in the Northeast and 50 percent in the Midwest in January. Permit issuance, which can be an indicator of future building activity, rose 1.9 percent on the single-family side to a seasonally adjusted, annual pace of 584,000 units and rose 1.5 percent on the multifamily side to a 341,000-unit pace in January. Both were the strongest permit numbers seen since mid-2008. Permitting activity rose in three out of four regions in January, with a 10.1 percent gain registered in the Northeast, a 1.4 percent gain registered in the Midwest and a 1.1 percent gain registered in the South. The West posted virtually no change in permitting activity, with a 0.5 percent decline. www.nahb.org

Despite the worst economy in a generation, apartments and their residents contributed $1.1 trillion to the national economy in 2011, supporting 25.4 million jobs, according to a new report released recently by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA). The report, along with an interactive map and economic impact calculator, is available on the new website www.WeAreApartments.org. Based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis, the report covers the economic contribution of apartment construction, operations and resident spending on a national level plus all 50 states. In addition, construction and operations data is available for 12 Continued on page 3

6 Questions with Katie Poole-Hussa The Landlord Times recently caught up with Portland Oregon based property manager, landlord educator and Smart Property Management partner Katie Poole-Hussa. See what she has to say about motivation, inspiration and fundamentals in her life as a property management professionals. The Landlord Times: What’s your story? What is your background and how did you get into the property management industry? Katie Poole-Hussa: I had been a receptionist in the lumber industry for 6 years., and was attending college classes, as I was able, in an attempt to discover what I wanted to be when I grew up. Through the mandatory “Career And Life Planning” class that the college required of me, I was forced Professional Publishing, Inc PO Box 30327 Portland, OR 97294-3327

to explore my professional strengths & weaknesses. Test, after test, after test repeatedly concluded that property management was where I was supposed to be. So, I listened. Right away I haphazardly submitted my two weeks notice, applied to every property management company that was hiring in the area, and crossed my fingers that the phone would ring. Thankfully it did. The local rental housing association president, and instructor of the property management certification program quickly hired me. What luck! I currently am a licensed property manager in the state of Oregon, an eviction specialist in the Portland area, and a continuing education provider for other licensees. I feel very appreciative that I discovered my niche so early on in life. I made the leap of faith seven years ago and I’ve never looked back.

Current Resident or

TLT: What is it about this industry that has kept you motivated and interested? KPH: My motivation to continue managing properties, providing eviction services, and educating other landlords is to help landlords be better landlords. Education is key in this industry. Most often, the mistakes that I see landlords make are simply because they don’t know the laws. Well unfortunately that is not a legally recognized defense. Teaching other property managers and rental owners about laws and common business practices is thrilling to me and I don’t see an end to it anytime soon. As landlords, we must realize that we’re in an ever changing industry. Landlords should approach managing their rentals just like any other business. Do your research, attend workshops, join landlord associations, etc. The opportunities are out there if landlords are willing to make the time and spend a little money. It’s my opinion that you can’t afford not to.

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veryone in the property management business knows certain times of the month are exceptionally busy. Even managers and leasing people who are experts at scheduling will occasionally get “double booked” or swamped with “drop in” visitors. Being able to handle more than one thing at a time and to do so graciously, is just part of the job description in this industry. Here is a question that came up at a leasing seminar:

Q: When I am really busy at the end of the month I occasionally have two or three people show up at the same time to see an apartment. If no one called ahead to make an appointment, is it okay to give them all a group tour?

A: This is a dilemma that every-

one will eventually face if they are in the business of renting apartments. However, keep in mind that it’s a positive thing when people are “flocking in” to see your apartments. It means your telephone skills, advertising and/or curb appeal are all working to draw prospective renters into your community. On the other hand, assisting more than one person at a time presents a special challenge, as no two people have the same needs. Also, there will be times when your prospects are moving for reasons they wish to keep private. These and other factors like “who arrived first” and “who needs to move the soonest,” must be taken into account before deciding if a group tour is in order.

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I would encourage you to imagine that your busy office is the emergency room of a hospital. Stay calm, confident and in control as you do “triage” to assess the basic needs of your prospects and establish priority. Remember: Not everyone is in a “life threatening” situation, and some people can wait. Hold onto your sense of humor as you explain that you want to assist everyone, but there is only one of you and three of them so you will need their help. Ask each party to fill out a guest card with their contact information, along with the size apartment they need and desired move date. Collect the cards and quickly determine which prospect(s) can and cannot wait. For example, if one of your visitors does not need an apartment for two months, then you can encourage that person to join in on a group tour or make an appointment to come back at a later date. If another prospect needs an apartment size that you do not have available, you can phone a sister community and then direct that individual to one of your colleagues who can offer immediate assistance.

If you do find yourself on a tour with two or more parties, you must be courteous and give each person or group “equal time,” even if one seems more interested or more desirable as a prospective resident. Think of yourself as the “host” of a party: Your goal is to make sure each one of your guests feels welcome and special so they will want to come back; or in this case rent. Oh, and one last thing: Remember to introduce your “guests” to each other. - This shows that you have good manners! If you have a question or concern that you would like to see addressed next month or if you would like to inquire about leasing training, please ASK THE SECRET SHOPPER by making contact via e-mail or fax. Your questions, comments and suggestions are ALWAYS welcome! ASK THE SECRET SHOPPER Provided by: SHOPTALK SERVICE EVALUATIONS Phone: 425-424-8870 E-mail: joyce@shoptalkservice.com Web site: www.shoptalkservice.com Copyright © Shoptalk Service Evaluations

The Landlord Times - Colorado • March 2013

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Apartment ...continued from front page

apartment buildings with five or more units are major sources of economic activity, jobs and personal earnings,” said Fuller. “In addition, the residents of apartment buildings constitute an important source of local, state and Highlights from the report include: • The apartment industry spent $14.8 national economic activity as their billion on construction in 2011, and spending for goods and services is this was a year with one of the low- recycled through the economy. Like est multifamily completions on re- the operating outlays for apartment cord, just 130,000 new units. The buildings, the spending by renters reaverage pre-recession was around curs annually thereby supporting local economies on an ongoing basis.” 270,000 completions. In conjunction with the study’s • The industry spent $67.9 billion in 2011 to operate and improve the release, the new website www. country’s 19.3 million apartments— WeAreApartments.org breaks down more than four times the amount the data by each state and the 12 metro spent on construction—creating a areas through an interactive map. Vis$182.6 billion economic contribution itors can also use ACE, the Apartment Community Estimator, a new tool supporting 2.3 million total jobs. • The country’s 35 million apart- that allows users to enter the number ment residents spent $421.5 billion of apartment homes of an existing or on goods and services in 2011—70 proposed community to determine percent of which stayed within the the potential economic impact within local economy. The spending cre- a particular state. “For the first time we’re able to ated a total economic impact of $885.2 billion supporting 22.8 mil- quantify the tremendous economic impact of apartment residents across lion jobs nationwide. • The combined contribution of apart- the country, in addition to the powerful contributions from apartment conment construction, operations and VALLEY, METRO, ARIZONA resident spending equals $1.1 tril- struction and operations,” said NAA lion, or more than $3 billion every Chairman of the Board Alexandra Jackiw, CPM, CAPS. “It truly shows a day. comprehensive view of the industry’s “Although attention is usually critical role not just in housing, but to focused on homebuilding and the the economy at large.” Feb,the Apr, Jun, Oct, Dec “Even in one of the worst economic single-family sector, annual con-Aug, struction and operating outlays for climates we’ve ever seen, the mulmetro areas: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, New York City, Philadelphia, Seattle and Washington, D.C.

tifamily industry and its 35 million residents contributed more than $1 trillion to the economy,” said NMHC Chairman Thomas S. Bozzuto, CEO, The Bozzuto Group. “With up to seven million new renter households forming this decade—almost half of all new households—the dollars and jobs we add to the economy will only grow in magnitude.” For more information or to download the report “The Trillion Dollar Apartment Industry”, visit www. WeAreApartments.org. q For more than 20 years, the National Apartment Association (NAA) and the National Multi Housing Council

(NMHC) have partnered on behalf of America’s apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of 170 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. One-third of Americans rent their housing and 35 million people live in an apartment home. For more information, contact: NMHC at (202) 974-2300 or info@nmhc.org or www.nmhc.org. NAA at (703) 797-0616 or carole@naahq.org or www.naahq.org/governmentaffairs.

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6 Questions

...continued from front page

TLT: Who was the most influential person/mentor in the early part of your career? What did you learn from them? KPH: The most influential person in the early part of my career was actually a tenant. We’ll call her Nikki. Nikki was a tenant who came to our company just like all others, and it wasn’t until I moved her into the simple 1 bedroom downtown apartment was I even influenced by her. We met at the unit to complete the rental agreement. After collecting the prorated rent, confirming the transfer of utilities, and completing the inspection report, it was time I hand over the keys. This simple gesture immediately sent Nikki into what I could equate to an emotional breakdown; she threw her arms around me for a hug, bawled her eyes out with joy, and we sat for the next 20 minutes talking about her rough life history. She was expressing to me the sincere thanks and appreciation she felt towards me for giving her a chance at housing when no one else had. This would be her first apartment since residing at a shelter for battered women. This brief, yet influential, experience with Nikki early on in my career showed me that property management isn’t about just filling and maintaining rental units. My job from that point forward became providing quality housing to real people who want to be heard, respected, and given a chance. Since Nikki, I’ve had many opportunities to fulfill this same dream for others and I am thankful that she changed the way I approach my “job”.

TLT: We’re often reminded about the importance of fundamentals in the things we do. What do you consider the fundamentals for success in this business to be? Why are they so important? KPH: Honesty, integrity, attention to detail, forward thinking, and respect just a few of the fundamentals that I think are key to being a successful property manager. As a property manager, not only do you most likely have a boss to answer to, but you also have to answer to your clients, and to your tenants. All parties involved must be treated with respect and honesty. To me, this is a given. Attention to detail and forward thinking go hand-in-hand. During turnover for example, items such as confirming move out dates & rent amounts with tenants, advertising upcoming vacancy, notifying your client of the vacancy, coordinating cleaning, painting, and carpet cleaning, all while continuing to show the rental to prospects, answer ad calls, and processing applications…whew! Managing time, coordinating the order of events and some “hand-holding” requires managers to be thorough, detailed, and forward thinking because time is money. TLT: Generally speaking, what 2 or 3 pieces of advice would you give to a room full of property managers? KPH: First, and most importantly, using the proper forms. The rental forms you use should be state specific, written by a lawyer, and easy to complete. Rental forms should have minimal blanks or areas to be completed by

the landlord so that the risk of error is far less than if a landlord either creates their own forms or uses a template from the internet. Second to forms is the importance of tenant application screening. I cannot think of an easier, more inexpensive way to potentially steer clear of a major disaster. Invest a small amount of time, make the phone calls and check for any discrepancies within the information the applicant provides. Similar to educating oneself in the business of managing rentals, you cannot afford not to thoroughly screen. Lastly, I find the job easiest when all sides (management, tenants, and client) are in constant communication with one another. Just as landlords have to know the laws, I’m all for tenants knowing what their rights and responsibilities are too. Landlords should send copies of the rental agreement and addendums to tenant after completion. We should summarize phone conversations in writing to tenants to help ensure clear expectations. Eyes should be on the property constantly through the help of neighbors, regular interior and exterior inspections by management, and maintenance personnel should be of the understanding that while they’re at the property to make minor repairs, be observant of what they see, smell, hear, etc. The worst thing a landlord can do is to hand over possession to a unit and then never communicate with the tenants until it’s time for them to vacate. Be present and communicate your ideas, intentions, and expectations quickly yet thoroughly.

TLT: How has the use of technology changed our industry? KPH: I remember vividly the days when a call to my classifieds rep at the local paper would take over an hour on the telephone to update all of the vacancy ads for that upcoming weekend’s distribution. Besides the huge amount of time involved in newspaper advertisement, the cost that I had to forward on to my clients was outrageous. Luckily, new technologies have been introduced and landlords now have several media’s in which they can advertise their vacant units for free with just a few clicks of a mouse. Pinterest, Facebook, and Craigslist are just a few of the free social media sites that I utilize in my business. These popular sites are excellent ways to promote your properties. The key aspects for a successful advertising account include being professional, being relevant, having flattering property pictures, and focusing on great products, fun communities. Linking people from these social medias directly to your website is also an effective and free method of creating interest in your available rentals. The technological combination that these sites offer of free and widely reachable has trumped the daily “pulp” we once relied on.

Katie Poole-Hussa, a principle at Smart Property Management, LLC, is a dedicated to professional property management and education. Look for her column "LandLady Katie" debuting in The Landlord Times this Spring. Reach her at katie@smartpm.co. VIsit Smart Property Management at smartpm.com. COLORA

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The Landlord Times - Colorado • March 2013


The Landlord Times - Colorado- March 2013