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the official publication of the american apartment owners association
Editor in Chief Robbie Cronrod
Staff Editor Nancy Abrams
Marketing Manager Alexandra Alvarado
Designer Vera Gavrilova Advertising Kit Baker-Carr
Protect Your Property and Heirs with a Proper Estate Plan
Contributors Alexandra Alvarado Barry Bruce Belicia Hernandez Bradley Barth, Esq.
5 Reasons Why Community- Wide Wifi Is a Must-Have for Apartments and Condos
Catrina Linhard David Spooner Kathelene Williams, Esq. Lauren Lieb Matthew Sloley Nancy Abrams Richard D. Gann, JD Stacy Conkey Steve White The Dataline Technologies Team The Rentometer Team
What Your Dryer Vents Want You to Know
Emotional Support Animals and The Fair Housing Act
Rent Changes in Major Metros: June 2020 vs 2021
Celebrities on the Move
Lasting Impact of COVID-19 on the Rental Housing Market
Contents Continue on Page 4 >
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You've made it to Summer 2021! It's been a complicated year with many stressful days and difficult conversations, but we are looking forward to a bright future as we transition out of the pandemic. Investment opportunities are on the rise and leasing volume is back to normal. The pandemic has accelerated the rental industry's much needed adoption of technology to make our lives easier. And we have learned how to help one another in the midst of chaos. This issue covers what's next for rental property owners or managers like you. So take a breather, and look on the bright side. You got this!
Modern Laundry Rooms for Today's Tenants
Understanding Post- Pandemic Apartment Cap Rates
How to Increase Profitability With An Elevated Resident Experience
Freddie Mac and Fannie Mae Back Out to Play
Property Insurance: How to Cover your Property – Properly!
LLCs: A Solid Asset Protection Plan or Just Swiss Cheese
Managing Your Property Manager
don't be a victim: 8 frequent tenant scams
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Estate planning is not only for the “uber wealthy.” Every one of us has some sort of an estate that needs to be handled properly. This is certainly true for anyone with property. I see far too many families end up having to fire-sale property during the probate process due to unforeseen taxes and fees. Protect Your Property & Heirs with a Proper Estate Plan If you own real estate, you want to make sure to have a proper estate plan in place. Without one, you are subjecting your family and your assets to the probate process. Probate is when the courts step in to make important decisions about your personal and business affairs because you did not create a living trust. Just having a will does not avoid probate. Probate can be a years-long process and very expensive.
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Your properly prepared estate plan can help you:
property. It’s here where I want to mention asset protection. Asset protection and estate planning complement each other. If you own property you need to understand where liability comes from and how to protect yourself. Setting up the proper legal structure for your property is extremely important. Certain types of asset protection trusts can also help to guard you and your family from liability. Whatever tools you may use to guard your assets, they should properly integrate with your estate plan.
Avoid probate Leave behind your property for the next generation Give to charity Keep Uncle Sam away Appoint trusted people to handle your medical and financial affairs should something happen to you Appoint trusted people to care for your children if you become sick or injured Life can throw any of us a curveball when it comes to unforeseen events. The event could be an injury, illness or a liability related to your investment
Let’s take a look at what makes up your estate plan:
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#1 Living Trust Having a trustee allows you to transfer your assets privately to avoid probate. You can decide what happens to your property if you get sick or injured and need help. #2 Pour-Over Will Goes along with your living trust and states that anything that was not put into your living trust during your lifetime is “poured” into the trust and distributed to the beneficiaries. I see people forget to add a property to the living trust and this is where your pour-over will comes into play. #3 Medical Power of Attorney This is when you give someone you pick permission to make medical decisions for
you if you become incapacitated. This could be your spouse, but maybe you are single. It doesn’t have to be your spouse even if you are married; it can be anyone. #4 Durable Power of Attorney Who is going to pay the bills when life deals you a curveball? A durable power of attorney lets you designate someone to manage your financial affairs. They can sell property, pay rent, and ensure your business remains in order. #5 HIPAA This allows the person(s) named within the document to access your medical records. Doctors and hospitals will ask for this form, it’s a serious deal. #6 Beneficiary Designations Part of your estate plan is choosing beneficiaries and making sure your different accounts list the beneficiaries correctly. Accounts such as life insurance policies and retirement accounts pass by contract so make sure the beneficiaries on these types of accounts match your wishes.
ESTATE PLANNNG I S FOR ALL OF US . I F YOU DON ' T HANDLE IT , THE COURTS WI LL DEC I DE FOR YOU .
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What Does Your Trustee Do? Serving as a professional trustee when clients need it, I understand the importance of choosing the right trustee for your estate plan. Your trustee will have an immense responsibility. You may have a family member who is the best option and it’s important to understand what the trustee will be handling. Your trustee will be responsible for deciding how money and other assets flow in and out of the trust. While the trust is being settled, a beneficiary may ask for an immediate disbursement, for example, and the trustee will have to make a decision. Your trustee has the duty of making sure that all beneficiaries understand what exactly is in the trust and disbursing the assets to each beneficiary. There are many issues that can pop up here. What if there are outstanding loans that were made to a beneficiary that need to be paid back? The trustee will need to make sure the accounting is done right and may need to hire a CPA to help. Maybe there are outstanding debts, such as a mortgage or credit cards, that need to be paid off before assets are distributed. The trustee must step in to figure this out too. Lawyers, real estate professionals and tax experts may need to be hired depending on the circumstances. If there are multiple properties involved in an estate settlement, the trustee may need some help figuring out all the tax implications. Allows you to transfer your assets privately to avoid probate. You can decide what happens to your property if you get sick or injured and need help.
The Big Takeaway Estate planning is for all of us and if you don’t handle it, the courts will step in and make decisions for you. It’s also not only about transferring assets at death, but also about taking control of your situation right now. There may be estate planning strategies you want to take advantage of right now. Keep in mind that the winds of change are blowing in Washington. There are massive new tax proposals being debated in Congress right now with tax increases we have not seen in forty years. There is talk of taking away important planning tools that property owners have utilized for many years to help transfer assets to the next generation. Now is the time to get a fresh look at your planning to ensure you and your family and your assets are protected.
Bradley Barth, Esq. Partner BarthCalderon, LLP (714) 704-4828 ext. 114 email@example.com
Bradley Barth is a partner and Supervising Attorney of the firm’s Transactional and Estate Planning Department encompassing business formations and transactional matters, estate planning, domestic and offshore asset protection, probate, trust administration, tax and real estate law. He views his role as a trusted and long-term advocate of asset protection planning in helping his clients achieve and protect their financial goals and lifetime accomplishments.
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5 REASONS WHY COMMUN ITY- WI DE WI F I I S A MUST-HAVE FOR APARTMENTS AND CONDOS Today’s tech-savvy tenants are looking for amenities beyond microwaves and refrigerators. They want to live in a place that provides seamless access to the internet everywhere. As a result, community-wide WiFi has emerged as one of the most sought- after services in the rental market.
According to the National Multifamily Housing Council (NMHC), a high percentage of renters are placing a premium on internet connectivity in their apartments and condos.
As a property owner or landlord, it’s useful to understand why tenants are looking for property- wide internet connectivity. This perspective can help you better position your apartments and condos for higher revenue and long-term tenancy.
Tenants can use the property-wide WiFi connection to set up their power, gas, and water. Removing the internet- connectivity hurdle will make your apartments and condos more desirable and you will attract great tenants faster.
97.1% of renters consider it important or very important
1. New Renters Appreciate the Convenience
2. Tenants Get Better Quality Internet
As an owner of multi- dwelling units (MDUs), you are in a better position to negotiate with ISPs, allowing you to provide faster, higher bandwidth internet. Also, a managed WiFi service means better reliability, security, and customer service for the tenants.
New renters don’t have to worry about dealing with Internet Service Providers (ISPs). As soon as they move into the apartment, they can enjoy an instant connection to the internet. It removes one more obstacle to renting a new place.
74.8% of renters consider it important or very important
69.3% of renters consider it important or very important
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With property-wide WiFi coverage, residents can watch Netflix and YouTube while enjoying the sun in the swimming pool or working out in the gym. They don’t have to rely on their mobile carriers to roam around the building. 4. Helps Renters Who Are Working from Home Covid-19 has changed the concept of work. Even as things go back to normal, there are speculations that 25-30% of the workforce will be working from home. Even people who have internet services are looking for apartments with community-wide WiFi. It ensures that they have a backup internet service in case something goes wrong with their primary connection.
The work-from-home crowd is a lucrative market. Generally, they work in high-end professions. It means you can rent your apartments at higher prices to working professionals who consider internet connectivity an essential service. 5. IoT-Enabled Smart Apartments Are Cutting-Edge In the last few years, Internet-of-Things (IoT) devices like smart thermostats, smart lightings, and smart locks have penetrated consumer consciousness. These technologies give your rental property an edge. Smart buildings feel modern and they attract more renters.
You should talk with your community-wide WiFi service provider to figure out if you want to incorporate the cost as part of the regular rent or if you want to set it up as a separate line item. Either way, you have an opportunity to increase the revenue from your rental properties. 3. Tenants Have More Freedom of Movement Tenants have restricted connectivity with personal internet service. If you offer luxury amenities like common lobbies, work areas, swimming pools, and gyms, it makes sense to add community-wide WiFi so residents can move around without having to worry about connectivity.
But you need property- wide WiFi to take
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advantage of IoT technologies. Also, you can deploy IoT devices to make your property more eco-friendly. For example, you can use WiFi-connected monitors to improve the efficiency of power and water usage in common areas which can save you money. The Right Property-Wide WiFi Partner Can Make a Huge Difference Property-wide WiFi is a great way to attract new tenants and keep your current tenants happy. But the initial setup and installation require some planning and expertise whether you own a single building or multiple rental properties so you need to get help from a service provider who understands the requirements. A property-wide WiFi system will attract higher-paying renters and retain your best tenants.
This article was contributed by the Data Line Technologies Team. (866) 260-7992 Learn More "We provide WiFi for apartment complexes. Our experts can figure out your needs, whether you own a single building or multiple rental properties."
SMART BU I LD I NGS
FEEL MODERN AND ATTRACT MORE RENTERS .
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WHAT YOUR DRYER VENTS WANT YOU TO KNOW Most Americans are unaware of the dangers and risks of not taking preventive care of dryers and dryer vents. Dryer vent safety often gets overlooked even though there are many reasons why landlords, property owners or their maintenance teams should keep an eye on the condition of their dryer vents.
Good Vs. Bad Vents There are multiple types of dryer vents, including those with screens and louvers that substantially increase the risk of a dryer fire and enable birds and rodents to build a home in your ducts. What thousands, if not millions, of people don’t realize is that dryer fires make up about $233 million in property loss each year. As many as 13,820 dryer fires are reported annually, resulting in multiple deaths and injuries. When choosing a dryer vent for new construction or a replacement vent, pick a cover that doesn’t have screens, grids, or louvers. It should be designed for maximum airflow and be tightly sealed to keep out pests and drafts. Understand Safety Code Requirements When your dryer is installed or replaced, it's a good idea to be aware of all fire safety codes to ensure compliance. The dryer vent should have a diameter of at least 4 inches
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and be as large as the dryer outlet. The shorter the dryer exhaust duct, the lower the risk of fire. The vent should also empty outdoors and be secure enough to keep the exhaust from getting back into the home. For example, New York City's exhaust installation code 504.4 clearly states that “screens shall not be installed at the duct termination…”. Regardless if your city has specific code requirements these guidelines should be followed to prevent dryer fires and reduce your liability. Schedule Regular Dryer Vent Cleaning Your dryer vent requires regular cleaning to remove any blockages that may develop. As lint builds up in the duct inside your wall, it reduces airflow which can cause overheating and a fire. Professional dryer duct cleaning is an affordable and effective way to keep your dryer working efficiently while dramatically reducing your risk of a house fire.
Build-up of lint on the lint trap Top of the dryer is too hot to touch while running Clothes take longer than one cycle to dry Tenants’ clothes coming out hotter than usual Dryer stopping repeatedly during a cycle Indicators to keep an eye out for: As noted, a dryer that is not working properly can increase the risk of fire. Have your maintenance team look for signs that the dryer is not working correctly and for any potential increased risk of fire. will encourage home and property owners to exchange an old screened or louvered vent with a vent that is designed for maximum airflow. It should also be tightly sealed to prevent drafts and pest entry. Clear Signs Your Dryer Needs Attention
Do not forget to clean the heat vents on the back of
Dryer vent cleaners also install new dryer vents and
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your dryer. Lint likes to accumulate, and if it gets too hot, it can quickly start a house fire. Let's Recap There are many types of dryer vents that any fire safety professional would advise not to use, including those with screens, grids, and louvers. They’ll tell you to take them down immediately and replace them with a dryer vent that is made for home safety and pest entry prevention. Once a year, have your dryer vents and ducts cleaned out, as lint can accumulate and cause a home hazard. For your and your tenants’ safety, follow codes and requirements and purchase the safest, most efficient vent on the market.
Belicia Hernandez Marketing Director
P-Tec Products (616) 772-0659 firstname.lastname@example.org
"I push industry boundaries powered by my passion to empower businesses to succeed. I love learning new programs, selling brands, and creating social media content. I have a degree in advertising and I could not be more thrilled to put what I learned in college and in real world experience to such good use at P- Tec Products."
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Emotional support animals can come in all shapes and sizes, making it difficult to know how to properly handle accommodation requests and avoid possible fair housing complaints. It is imperative that rental property owners follow the proper verification process for emotional support animals based on the Fair Housing Act and know how to manage some common situations that may arise. EMOTI ONAL SUPPORT AN IMALS AND THE FA I R HOUS I NG ACT
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Emotional Support Animals (ESA) - Proper Verification How do you handle an applicant that states they have an emotional support animal and presents you with an ESA letter? This can be tricky as many of these letters can be obtained from the internet without much of a professional relationship between the resident and the verifier.
To help with these situations, you should have a verification process in place based on the Fair Housing Act that includes the following:
Ask the Resident:
Ask the Verifier:
Did you contact the verifier for the sole purpose of obtaining an ESA letter? Have you had more than one or two brief contacts with the verifier for the purpose of providing a verification? Does the verifier have personal knowledge of your disability and need for an animal? Has the verifier provided you with medical or mental health services?
Did the resident contact you for the purpose of obtaining a verification? Do you have an ongoing professional relationship with the resident by providing medical or mental health services beyond providing a verification? Do you have adequate personal knowledge of the resident to be able to make a diagnosis of a disability? Please note: we are not requesting that you provide the diagnosis.
As you can see, the above questions will establish whether the resident has an ongoing relationship with the verifier and meets the criteria of having a disability that requires the aid of the animal.
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animals. Further investigation shows that the pets were not disclosed on their rental application. The resident states that they are
CAN YOU RESTR I CT AN ESA ON BREED OR S IZE?
all emotional support animals. What now?
Whether it’s one or multiple animals, you need to follow the same verification procedures. The only difference here is that each animal would have to provide a different service. If each animal can be verified, then accommodations need to be made. In conclusion, a verification process, along with fair housing training, will ensure everyone’s needs and rights are met.
THE SHORT ANSWER I S NO .
Breed and Size Restrictions Can you restrict an ESA based on breed or size? The short answer is no. If the need for the animal has been verified, the Fair Housing Act states that accommodations must be made. Your job is to now welcome Muffy the hundred-pound Rottweiler or Wilbur the pot-bellied pig to the family. Undisclosed or Multiple Emotional Support Animals
Kathelene Williams President The Fair Housing Institute Click here to watch Fair Housing Educational Videos
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maintenance staff member that a resident has multiple
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RENT CHANGES IN MAJOR METROS:
Price changes in your local rental marketplaces - some positive, some negative. You analyze and decide.
Since the start of the global pandemic, rent prices have changed across the U.S. To quantify the impact, we’ve inspected rent changes in ten metros where AAOA members reside. On the next page we present a summary analysis of our findings for these metros, comparing two- bedroom rents from June of last year with their current levels in 2021. Based on our analysis, year-over-year rents in these metros have fluctuated - some up and some down.
Our City Analysis uses a twelve- month “LookBack” to establish an average baseline rent. The twelve-month LookBack considers rent data twelve months back ending June 1, 2020 and twelve months back ending June 1, 2021.
As always, there are various factors that can influence local rental markets and it is important to do your research and consult multiple sources before making rental decisions.
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JUNE 2020 VS JUNE 2021
As the table shows, two-bedroom rents for New York City decreased most amongst the compared metros down 17% from their pre-pandemic rate. At the same time, two- bedroom rents for Las Vegas, NV increased the most to 6% higher than pre-pandemic rates.
This article was contributed by the Rentometer Team. For questions, please contact email@example.com or visit Rentometer.com Rentometer uses proprietary technology and data to provide a thorough rent comparison analysis in seconds.
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wHO ' S bUYING . . .
ADELE English Grammy -winning singer Adele has purchased a 5,500-square-foot home in the Beverly Crest area of Beverly Hills from her next door neighbors, Nicole Richie and Joel Madden, at a cost of $10 million. The gated neighborhood is popular with celebrities. Adele’s neighbors include Rihanna and Doja Cat who each bought properties there in 2021.
CHRISTOPHER MELONI Christopher Meloni will be combining three separate condos in the 22-story Memphis Downtown in New York’s West Village into one full-floor luxury home. With a selling price of $5.35 million, the Charles Street residence will offer the “Law and Order” star dramatic views and a short walk to Hudson River Park.
TOMMY HILFIGER After selling their Greenwich, CT, home earlier this year, Hilfiger and his wife, handbag designer Dee Ocleppo, spent $30 million for two properties in Palm Beach. They will be living in the newly built house for which they paid $9 million while they remodel the $21 million waterfront mansion that will be their permanent residence.
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wHO ' S SELL ING . . .
SUGAR RAY LEONARD After calling Pacific Palisades home for 20 years, Sugar Ray Leonard is currently asking $46.5 million for his 16,773 square foot estate. He had previously put the residence on the market in 2019 for $52 million. Set on 1.7 acres, the gated property boasts seven bedrooms and a two-story guest house. The home was designed by Richard Landry, the “King of Megamansions.”
ROBERT REDFORD Located in Heber City, Utah, Robert Redford’s Horse Whisperer Ranch is on the market for $4.9 million. The one- story, two-bedroom, two-bath house, built in 1914, sits on 30.37 acres. In addition to a two-car garage, the property offers stables, a recreational vehicle garage and views of a lake, a river and mountains.
Michael Douglas and Catherine Zeta Jones have listed their Upper West Side apartment for $21.5 million. Set in the Kenilworth, the home was designed by Thierry Despont and includes four bedrooms and five and one-half baths as well as stunning Central Park views. The 1908 structure was built by Townsend, Steinle & Haskell to look like the 12th century castle that shares its name. MICHAEL DOUGLAS & CATHERINE ZETA JONES
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THE LASTI NG IMPACT OF COVI D-19 ON THE RENTAL HOUS I NG MARKET By looking back on what landlords and tenants have experienced, we can get a better understanding of what may come.
For 18 months, COVID-19 radically disrupted our lives. Here in the US, the risk of the virus has diminished; however, its impact, in large part, has not. In fact, that impact continues to evolve in unforeseen ways, perhaps most acutely in the rental housing market. Over the course of the last year and a half, prognosticators have been
behaviors, rental concessions, and all the adaptations landlords have adopted to survive an incredibly challenging year. Eviction Flood? Although the future of the moratorium is uncertain, we do know that eviction numbers are down more than two thirds over the last year. This makes sense, of course, as the main driver of evictions – failure to pay rent – has been taken off the table in most cases. According to Princeton Eviction Lab, a typical year sees about a million evictions. This year, that number is down to 312,372. Does this suggest there will be a flood of evictions if the moratorium expires on July 31st? According to our survey, 18.2% of
all over the board in predicting what the
market will look like even just a few months into the future. We’ve collected surveys, internal data sets, and external sources to provide insight into the impact of COVID-19 on the rental housing market now and
into the future. In the following article, we’ll cover changing technologies and
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landlords have said that they plan to evict at least one tenant. The most recent pulse survey of tenants by the U.S. Census Bureau mirrors this with 14.7% of tenants responding that eviction is very likely in the next two months, and 26.5% saying it’s somewhat likely. This would represent a stark increase in the likelihood of eviction compared to the pre-COVID rate, which is about two to three percent.
It’s true that some of these tenants who have been saved from eviction would have failed to pay rent in a typical year and are now living on as delinquent beneficiaries of the moratorium. In other cases, though, eviction might not help landlords as much as they think. Eviction is an arduous and costly process, and its profitability as a strategy hinges on replacing the existing tenants who cannot pay rent with those who can pay. If a lot of people are having trouble making payments, it follows that it will be harder than usual to find suitable new tenants. Our data on rental velocity support this idea. The pandemic is not, fundamentally, a liquidity shock or a test of economic faith, even though it does affect landlords in both ways. More largely, the pandemic is a scourge, whose deleterious effects are then reflected in the economy, which will recover as the world recovers and no faster. Essentially, this means that if tenants were current before the pandemic, it stands to reason they will be more likely to recover as the country returns to normal. This idea ties into why communication and screening are so important—it allows you to make an informed decision on your tenants’ employment stability and their efforts to pay rent with regard to a possible eviction. COVID Concessions: A Difference of Opinion There is discrepancy in perception
18 . 2% OF LANDLORDS SAY THEY PLAN TO EVI CT AT LEAST ONE TENANT.
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But a tenant that owes thousands of dollars of back rent might be too overwhelmed to see it as such.
Another concession landlords have been making is by not
increasing rent. Typical rent increases we see are 3-5% per year but rent prices in our system went down to 1% from February 2020 to February 2021. Again, this concession may be invisible to tenants, especially if they signed a lease within the last year. The discrepancy in perception highlights the importance of communication. Renters may not see all the
between landlords and tenants as to what this financial strain actually looks like. For example, our survey reports that 39.9% of landlords are receiving late payments more frequently, while only 23.4% of tenants report submitting late payments more frequently. On top of that, although 40.5% of landlords surveyed have reported
granting rent concessions, only 16.4% of renters reported having received rent concessions. Ultimately, landlords had to make tough decisions to survive, employing tactics rarely used otherwise, such as accepting partial payments or moving due dates. These concessions may not be apparent to a tenant for a number of reasons. To begin with, most tenants don’t read their lease thoroughly. If your tenant is used to being current on rent, they may not know what kind of late fees you charge and so may not realize you’ve waived them. If your rent is usually due on the first of the month and you move the due date to the fifth, that is a concession.
What is a Rent Concession?
A rent concession is any allowance you make for your tenant that deviates from the agreed upon terms of their lease. This of course includes forgiving rent, but also waiving late fees, pushing back due dates, and allowing tenants to dip into their security deposit.
THERE HAS BEEN A 20% I NCREASE I N WA IVED LATE
FEES S I NCE THE START OFTHE PANDEMI C .
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concessions that landlords are making, but the data also shows that renters fear eviction at a greater rate than landlords are planning to evict. Our advice for landlords is to let their tenants know they are providing these concessions and that they are working with them to get through the hardships together. Engendering empathy to and from your tenant can go a long way in ensuring things go smoothly after the moratorium is lifted. Portfolio Impact Perhaps the most telling indicator of landlord financial hardship is that 5.5% of landlords in our survey reported having to sell a property as a result of the financial ramifications of COVID, while the National Rental Home Council Survey reports 11%.
We think our forced-to- sell numbers are lower than national averages because residential portfolios, which make up a large part of our survey sample, were less affected by COVID. But we also think it’s because landlords who use rental management software like ours find themselves better equipped to make the adjustments necessary to stay afloat How does has this distress affect rental property investment? 26.1% of landlords have seen their portfolio growth negatively impacted. 14.1% of landlords have backed out of a deal because of COVID. Almost 14% of landlords have seen their portfolio growth positively impacted.
The reason for this split depends largely on an investor’s available capital, tolerance for risk, and their capability to find decent deals in an inflated market.
F I ND I NG A DEAL MAY TAKE SOME DUE D I L I GENCE , BUT THE
DEALS ARE OUT THERE .
With interest rates low, this is a good opportunity to buy. But we are seeing a corresponding increase in demand for rental property investment, which has in turn led to higher prices. Although market prices are inflated overall, there are more distressed landlords than in a typical year.
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Overall, leasing velocity is down, meaning that it takes more time to fill a unit than it did before the pandemic. Despite an increase in leads per unit and applications per unit, showings per unit are slightly down, suggesting that tenants and landlords are being more selective about meeting face to face.
whether for pre-screening, rental applications themselves, or online showings. We think these measures have improved tenant retention and kept the rental velocity from tanking further.
CBRE also projects that total rental property investment will grow 33% in 2021. These projections show an end in sight and present the pandemic as a storm that can be weathered. Online Adaptations Because personal safety during the pandemic has depended on minimizing in-person interaction, both tenants and landlords have shown an increased preference for doing business online.
How many landlords had to sell because of COVID?
6% of residential 16% of student housing 12% of commercial According to CBRE, real estate investment reflects this trend:
During the pandemic
45% of landlords report spending longer to fill a unit while prior to the pandemic. 75% of units were filled within a month whereas during the epidemic, this number was about 50%.
50% went towards residential 10% went towards student housing 40% went towards commercial
We’ve seen a massive shift toward online interaction,
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VI RTUAL SHOWI NGS
WENT UP BY 74% I N 2020 . ONL I NE RENT PAYMENTS WENT UP BY 105%
According to our survey, 77% of tenants prefer to pay rent using online forms of payment. Also in our data, the number of documents signed online has gone up a whopping 360%. The number of tenants paying online has increased by 105%, and the total number of dollars collected online by landlords has grown 117%. These figures also demonstrate a clear trend toward online business, which makes perfect sense given the personal limitations of the pandemic. Online rental management services further this preference by offering automation in addition to no-contact business. Adjusting rent,
accepting partial payments, forgiving late fees, and contracting maintenance are services that can all be scaled and automated using property management software. Interestingly, these preferences for online features extend beyond financial services. There was a 74% increase in first- time virtual showings in 2020, an Entrata survey shows, with landlords increasingly willing to show a property using only a phone or computer. Even though landlords must still put in the effort to make the space ready for eyes, virtual showings save everyone the hassle of agreeing on a time to
meet in person, which can delay proceedings even outside of a pandemic, especially for out-of-state renters. Given the difficulty of evicting tenants during the pandemic, landlords have adapted by becoming more rigorous with tenant screening. Those who didn’t screen tenants prior to the pandemic have more reason to now, and those who do screen have tightened their standards. 34% of landlords in our survey reported that they have made their screening standards more rigorous. The National Rental Home Council, also shows that about a third of landlords P A G E 3 1 |
increased focus on screening tenants, the automations and optimizations that rental management software provides, the increased security of online document signing, and the ease of online rental payments and virtual tours were all solid practices before the pandemic began. Though the virus has caused their popularity to increase, there is reason to believe that this popularity will continue even after the country and the rental property market recover. 87% of property managers believe digital communication is here to stay as the primary method of communication, according to the National Apartment Association. It’s also worth keeping in mind that the pandemic isn’t based in panic. The housing crisis of last decade was rooted in a gross misevaluation of subprime mortgages. The crunch that landlords have felt has hurt, but the industry isn’t fundamentally flawed. The effects that the market
87% OF PROPERTY MANAGERS
BEL I EVE D I G ITAL COMMUN I CATI ON I S HERE TO STAY. . .
have increased screening standards since the start of the pandemic. Simply put if you aren’t screening, you’ve cost yourself money, especially during the pandemic. Per our data, despite the adoption or tightening of screening standards, there hasn’t been a noticeable increase in screenings per unit. This suggests that the adoption of screening practices may have made landlords savvier in pre- screening as well, resulting not in more candidates but in higher quality candidates. Lasting Impact Although we all hope the coronavirus goes away as soon as possible, some of the adaptations that landlords have made may become new norms. The
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feels from COVID are side effects rather than symptoms of a more fundamental problem. That is to say, the underlying value that got you into the business is there, and the market will recover. In the meantime, take advantage of the online tools at your disposal, be on the lookout for bargains, and understand the importance of keeping communication open with your tenants. Effective tenant communication can help you survive in not just this but any market.
View the full Innago Survey
David Spooner Co-Founder Innago Property Management Software (513) 964-0172 firstname.lastname@example.org
Dave Spooner is a co-founder of Innago, a property management software designed to simplify life for small to mid-sized landlords. He has been involved in the real estate technology space since 2013, working to enhance the way landlords and tenants communicate. In addition to his expertise in content marketing, Dave utilizes his experience with management and entrepreneurship to help landlords achieve sustained success.
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Today, we’d like to share a story about WPD Management, a property management company that partnered with All Chicago during the pandemic to give back to their community through housing. Their unconventional strategy has improved their vacancy rates and profits while helping hundreds of people facing housing instability. From the very beginning of capitalism, business owners, including landlords, have been urged to protect their bottom line at all costs. But what if there were a way to make more profit and promote the public good? What if helping others were actually a part of your strategic plan? F I LL I NG RENTAL VACANC I ES WITH PURPOSE
How did they manage to do both?
Alexandra Alvarado, AAOA’s Director of Marketing and Education, interviewed Devon Rose, WPD’s Leasing Director, to find out.
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Based in the heart of Chicago’s South Side, WPD Management manages about 3,300
reduce and prevent homelessness in Chicago with the help of corporations, donors, volunteers, and most importantly, residential property owners. They’ve partnered with over 150 housing providers, including WPD, to fill vacant apartments with tenants who receive up to 100% rental assistance. Non-profit programs like All Chicago have popped up around the country in response to the affordable housing crisis in effect well before the pandemic. Their biggest challenge hasn’t been finding donors, but
rather housing providers willing to accommodate those most at risk of homelessness.
rental units. Recognizing the increasing housing affordability issues in the city, they embarked on a journey to help tenants in need while also increasing their leasing volume and rental income.
Shortly before the pandemic, WPD Management began
speaking with volunteers at All Chicago to create a way to fill vacancies with
tenants in need of affordable housing.
All Chicago is a non-profit organization that helps
All Chicago interviewed Devon and members of his team to truly understand how to improve their program for other rental housing providers. When the pandemic hit, WPD sealed the deal with
Devon Rose Leasing Director WPD Management
"When I took over [in 2019], I started envisioning the direction that we wanted to go as we were looking to expand and grow. A big part of that was partnering with non-profits like All Chicago and thinking outside the box.”
Pictured Above: All Chicago's CEO Carolyn Ross (left) with a $72M Homelessness Assistance Check provided by HUD. Photo appears courtesy of All Chicago.
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Pictured Left: Members of the Continuum of Care for Chicago (All Chicago) meet to prevent homelessness in Chicago. Photo appears courtesy of All Chicago.
All Chicago and began filling vacancies with tenants participating in the All Chicago program. At a time when many landlords and property management companies were struggling to collect rental income and find tenants, WPD Management was filling vacancies quickly with tenants who came with guaranteed rent. Devon notes, “Since All Chicago is a subsidized program, it alleviated a lot of those concerns about rent payments. It gives you a safety net because if a resident is unable to make their rent payment, they’re part of the program and they’ve covered.” All Chicago isn’t just for large housing providers, they’ve been proactively reaching out to mom-and-
pop landlords who can also benefit from their program. Devon points out that delinquencies affected mom-and-pop property owners much more, stating, “You can’t squeeze blood from a stone, and that doesn’t leave you with many options other than mediation or having the occupant willingly break their lease.” Devon says many of the tenants that come through All Chicago have not been able to secure housing because of their finances or they may be facing a hurdle with a background, employment, or credit history issue. Devon mentioned, “For smaller landlords, the ones who have been a little bit more hesitant to engage in subsidized
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Pictured Left: Video of WPD Management's buildings, some of which now house 200 All Chicago program participants.
housing, programs like these are in my opinion, one of the best alternatives. They have an established timeline. They have an established support system. Financially, they cover the rent, and that gives people the best chance to
program for rehabilitation or unemployment, or people with difficult backgrounds, it helps to have the direct involvement of a caseworker you can coordinate with through the program when needed.” WPD’s partnership with All Chicago and similar organizations have been so successful, they launched a WPD Cares page on their site and have given back to their community in other ways through toy drives for residents, a city block cleanup, and rent relief for
transition into more traditional housing.”
To date, WPD has housed 200 All Chicago tenants and they are adding another 45 units soon. Many of these tenants come from missions or shelters or they are
transient with no permanent home.
existing tenants who desperately needed it.
When asked if there have been any challenges with the new residents that have moved in, Devon responded, “Overall [it’s been] fairly positive. When dealing with a population that is coming from a second chance
Devon recalls how the pandemic “gave us the time to really look at how we want to grow and how we can really come out of it stronger, better, smarter. One of the big
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things was really establishing our core, our mission, our vision, and who we wanted to be as a company.”
non-profit in your area, being more open to subsidized housing applicants, or even hiring tenants in exchange for discounted rent. Whatever your strategy is, incorporating care for others into your business plan can have a measurable, positive impact in your life and the lives of others. This article was contributed by the AAOA Team. If you have any comments or questions please email email@example.com.
Their company mission says it all - “Above All Else, Care”.
Whether you own or manage a few or a few hundred units, WPD’s story shows there are ways to give back without jeopardizing your bottom line. In some cases that could mean partnering with a
Pictured Below: Stacey, one of more than 100 organizations and individuals who work to prevent and end homelessness in Chicago.
THE I R COMPANY MI SS I ON SAYS IT ALL - "ABOVE ALL ELSE , CARE . "
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MODERN LAUNDRY ROOMS FOR TODAY’ S TENANTS How to use cashless payment for better tenant satisfaction, lower operational cost, and improved reliability.
Tenant laundry is supported by offering vended washers and dryers in a shared or common laundry room. Until recently, this meant the machines were coin operated and needed periodic collection of quarters from the machines. But dealing with quarters can be a hassle for you and your tenants. While credit card systems for laundry machines have been around for decades, they usually cost several
hundred dollars per machine, require a
constant data connection for processing, and come with very high transaction fees. But advancements in technology have made new mobile payment technologies much more affordable; plus, the COVID-19 pandemic has skyrocketed demand for cashless options. For these reasons and more, now is a good time to take a fresh look at how your tenants pay for laundry.
Accepting Mobile Payments Solves These Concerns:
Increased tenant satisfaction (no one likes carrying quarters)
Reduced theft and vandalism
Increased reliability (no more jammed coin slides)
More precise machine usage monitoring
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Shifting Consumer Preference and Habits Around Payments
Consider this, the first coin operated washing machine was patented in...
The COVID-19 pandemic worked like an accelerant for cashless mobile payments, advancing user adoption by years.
When was the last time you handed someone cash or coins in person for a product or service?
This was before credit cards had been invented and the economy functioned almost entirely with cash. When coin operated machines first appeared, coins where plentiful and using them for payment was convenient.
of all point-of-sale payments in North America were cash payments in 2020.
of credit card transactions are less than $25 80% 51% According to a MasterCard poll released in April 2020, have used some form of contactless payment. of Americans
Even traditional credit card payments are becoming rarer as they are replaced by alternate payment technologies. What's Next?
(A sector previously dominated by cash.)
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