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Landscaping Resources for Property Managers

Rob Maday — Fri, 03 Feb 2012 01:19:17 +0000

Out of the countless ways a conventional landscape can become more “green” and sustainable, we’ve compiled a list of 3 suggestions with the best ROI for property managers.

1. Install a Smart Irrigation Controller (Rebates available in most municipalities)

At a time when cutting edge technology is so prevalent in our daily lives, it makes no sense that your irrigation controller is from the Stone Age. At a minimum, your irrigation controller should be connected to a rain sensor that will shut down any programming if a set amount of precipitation collects in a small basin. Also, your controller should have a “seasonal adjust” feature that allows you to quickly reduce your set watering times by a percentage, making adjustments to your program quick and painless. If you have a larger property, upgrading to a smart controller that accesses weather data, ETo, soil moisture, and other conditions will no doubt save you water, money, and keep your plants healthier.

2. Conduct Quarterly Irrigation System Check-Ups

Odds are if sprinklers pop up or start dripping in the early morning hours, you and your landscape maintenance crew rarely see the system in action. If anything, you see evidence the system ran as you drive past and see the sidewalk and driveway wet. So take 20-30 minutes during daylight to turn on each sprinkler valve to check each head and emitter for proper functioning and alignment. There should be little to no overspray onto pavement, no geysers erupting from drip tubing, and absolutely no puddling. If you see puddling, you are applying too much water too quickly. To remedy, reduce watering times to cycle-soak intervals, replace sprinkler heads with rotary nozzles, and/or install a thick layer of tree trimmings to absorb and retain the moisture. Conduct these irrigation check-ups on quarterly intervals as a poorly maintained irrigation system will eliminate the savings of even the most state-of-the-art irrigation controller.

3. Minimize the Size and Impact of Lawn

As discussed in greater depth by others, the conventional lawn is a remnant of Landscaping 1.0. We are now well into Landscaping 2.0 and the notion that lawns should continue to be front-and-center of our properties is baseless. The percentage of time a maintenance team spends maintaining lawn is disproportionate to the value it provides. And needless to say, the time spent maintaining a lawn is not cheap. The water cost alone in warm climates is enough to make you reconsider its place in the landscape. For a quick illustration on the cost of water for a lawn compared to a drought-tolerant landscape, see the Water Usage Calculator at Landscape Resource.

However, if your lawn is to remain in its current form for practical reasons, consider implementing the following practices for increased health and reduced maintenance costs:

Grasscycling: Leave your grass clippings in place to reduce the amount of fertilizers needed to keep your lawn green.
Aeration: Using an aerator (mechanical or manual), plug holes throughout your lawn 2”-4” on center. This will alleviate soil compaction and allow moisture and nutrients to be more successfully absorbed into the root zone.
Reduce watering times: Statistics show that over 50% of people overwater their lawns by a factor of 1.5-2 times the amount needed. Try cutting back watering times by 3-5 minute increments. If you notice your lawn browning after a few reductions, bump the time up a bit and you’ve found a more accurate schedule and saved some water.
Mow High: For most lawns, you can set your sharp mower blade higher. This encourages a stronger, healthier grass that is less dependent on outside inputs.

About the Author
Rob Maday, ASLA, is a California-based registered landscape architect with over 10 years of experience designing responsible and unique landscapes. His professional practice, RMLA, focuses on residential, commercial, and industrial projects along the Central Coast. In 2010, he launched LandscapeResource.com, a free, community-based resource that provides inspiration and information for sustainable landscaping.

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Investors Favor City Apartments Over Suburban Communities

Bryan Ives — Thu, 19 Jan 2012 20:03:24 +0000

Apartment building sales continue to remain strong, but in some areas investors are opting to invest in properties in cities rather than the suburbs. Two deals in the Boston area serve as a prime example.

According to Simon Butler, an executive director at Cushman & Wakefield, a 1,020- unit apartment complex with over 90% occupancy in the suburb Framingham, Mass. sold for $128 million, just below what it sold for in 2007 at $130 million. Charleston, S.C.-based Greystar Real Estate Partners acquired the property from JPI of Irving, Texas.

On the other hand, a 232-unit Cambridge, Mass., apartment property recently sold for $64.9 million, above the $55.8 million price it traded for back in 2006, according to Real Capital Analytics.

“You get stronger pricing in the city because there’s a perception that there will be stronger rent growth,” says Butler. Butler represented sellers in both transactions and the sellers renovated both properties. According to Dan Fasulo, managing director at Real Capital, some of the higher prices are found in urban areas while property value recovery in suburbs continue to experience slower growth.

Source: http://online.wsj.com/article/SB10001424052970203436904577153191559355760.html

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Tom Brady’s Green Mansion Nears Completion

Bryan Ives — Thu, 22 Dec 2011 00:38:02 +0000

Tom Brady’s green dream mansion in Los Angeles is nearly completed, and should be quite the touchdown pass to environmentalists. The 22,000 square foot house of luxury includes a six-car garage, eight bedrooms, a weight room, a wine cellar, and a lagoon shaped swimming pool, reports the Boston Herald. The home also comes with a covered bridge connecting two wings of the home, a gallery, an elevator, and a nursery for his son Benjamin.

The home cost more than $20 million not to mention an additional $11 million for the 3.75 acres of land in Brentwood, Ca. The wife of Mr. Brady, Giselle Bundchen, happens to be a United Nations environmental ambassador with an implied duty to build an environmentally conscious residence. According to the Herald, the Brazilian supermodel had the home built with energy-saving lighting, rainwater recovery systems, waste reduction and recycling programs, energy efficient appliances, sustainable building materials, and solar energy integrated throughout the home.

According to Forbes magazine, Tom and Giselle can certainly afford the energy saving add-ons due to the fact they are the world’s highest-paid celebrity couple with annual earnings reaching $76 million.

Check out this video of the home!

Source: http://www.thepostgame.com/blog/dish/201112/nfl-stars-environmentally-friendly-palace

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How to Select a Property Manager

Marc Courtenay — Mon, 21 Nov 2011 19:49:35 +0000

Yes, I’m aware that this is an unusual title for an article on this website. A recent set of circumstances helped me to realize that property managers might want to know how owners and investors go about selecting a manager for their property.

A close personal acquaintance called me last week and said, “I just purchased a residential property that is far from where I live. Can you give me some suggestions and criteria concerning how to find a really competent property manager? After referring them to this web site (www.propertymanager.com) I discovered another organizational website specifically tailored to the needs of landlords. Take a look at http://www.landlordassociation.org/management.html. Take special note of the information and section titles as well as the origin of this organization. Landlord Association.Org is an online company developed by property investors and landlords who want to extend information and services to others who are involved in real estate investing throughout the United States. Their self-expressed primary objective is “… to become your best single point of entry for information, ideas, knowledge, and resources which can help you make or save thousands of dollars each year. Landlord Association believes the “tricks of the trade” can often best be taught by business peers.”

They navigated me to an article titled “How to Choose a Property Manager” which is publicly available at http://www.rentalprop.com/prop-mgmt/property-manager.htm. This was the first time in awhile that I’d considered this topic from the point of view of those who are looking for competent property management. They say the best way to understand what your residents, clients and owners need is to “put yourself in their shoes”, or to “walk a mile in their moccasins”.

Well, it happens to be good advice, and this article helped me see what potential clients of yours are looking for. In fact, it was one of the articles that I sent to the above-mentioned acquaintance who was asking me for my help as they began their search. The first thing that caught my attention were the six questions that were posed by an individual who was thinking of turning his house into a rental and needed to find a good property manager:

What are my responsibilities as the property owner?

What are the responsibilities as the property manager?

Approximately how much would it cost to have the property managed and maintained by a property manager?

What kinds of questions do I need to ask when trying to choose a property manager?

What expenses would be tax deductible? Is the interest paid on the mortgage (or any part thereof) still deductible?

If you can provide me with a list of available resources that can help me answer these questions and the many others that I have, I would greatly appreciate it.
If we keep in mind what clients and residents are looking for when it comes to property management, we could be the answer and the solution. Be prepared and you’ll be just that!

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Renting vs. Owning: The Rent Ratio

Marc Courtenay — Thu, 03 Nov 2011 18:01:28 +0000

The buy-versus-rent question is particularly relevant right now as we see home prices continuing to decline and interest rates on new mortgages also going down to the lowest levels in 60 years.
Back in April of 2010 The New York Times did an impressive job of explaining the ratio that helps define whether it is economically more sensible for residents to buy or rent their housing. Part of the purpose of the article was to help those looking for housing to decide. http://www.nytimes.com/interactive/2010/04/20/business/20100420-rent-ratios-table.html

The Times analysis is based on comparing the costs of buying and renting a similar home, using data from Moody’s Economy.com, a research firm, and from real estate agents. This kind of comparison can never tell someone for sure what the best financial move will be. However, it does show whether a buyer will need a big jump in future prices to cover all the costs of owning — including the down payment, closing costs, property taxes, mortgage interest, repairs and co-op fees.

A simple way to do the comparison is to look at something called the rent ratio: the purchase price of a house divided by the annual cost of renting a similar one. The number 20 provides a useful rule of thumb. When you do the math, you discover that a ratio above 20 means you should at least consider renting, especially if you may move again in the next five years or so. When the ratio is well below 20, the case for buying becomes a lot stronger.

In many large metropolitan areas, including New York, Los Angeles, Chicago, Houston, Dallas, Atlanta and South Florida, the average ratio is now 16 or lower. It was more than 25 in several of these places at the peak of the bubble, about five years ago. Recently The Times asked Mark Zandi the chief economist at Moody’s Analytics about the chances of yet another housing crash happening and his current analysis of “The Rent Ratio”. His answers are revealing:

Q. I’m struck by how much higher the rent ratio still is in many places, relative to its average from 1990 to 2010. It’s about 18 in Washington (relative to a 1990-2010 average of 13), about 17 in Boston (relative to 15) and 15 across all metropolitan areas (relative to 11). Is there any reason to think the ratio should remain higher in the future than it was in the not-too-distant past? Or should we expect the ratio to continue falling in coming years, either through further house-price declines or through rent increases?

Mr. Zandi: I expect the house-price-to-rent ratio to continue falling at least through the remainder of this year and next. National house prices are set to decline by 5 percent this year, and apartment rents are on track to rise by about 5 percent. I do expect home prices to stabilize in 2012, but rents will continue to rise strongly. Supporting the strong rent growth is declining apartment vacancy rates. Apartment demand is healthy given the better job market and accelerating household formation, particularly among younger households that generally rent, and the ongoing foreclosure crisis which is forcing families from home ownership into renting. Apartment construction is also especially low by historical standards. If this script roughly holds, the house-price-to-rent ratio will be back close to its long-run average in most areas of the country by 2013.

Q. When we were talking earlier, you mentioned that a straight comparison of rents and home prices argues for renting in most places — but that once you consider other factors, the issue becomes a closer call. Can you explain what you meant?

Mr. Zandi: A literal interpretation of the current house-price-to-rent ratio argues that it is still better for most households to rent rather than buy. This suggests that a prospective home buyer might want to wait until house prices fall even more before buying, but there are several important things to consider. Most of the coming house price declines will be for distressed properties — foreclosures and short sales. And timing the precise bottom of house prices is an intrepid affair, and may not the best strategy if the homeowner plans to live in their home for more than a couple of years, as most homeowners do. It is also important to keep in mind that mortgage rates are extraordinarily low, with the rate on a 30-year fixed rate mortgage currently well below 5 percent. Rates could go lower, but it is unlikely. As the economy continues to gain traction and the Federal Reserve ends its zero interest rate policy, mortgage rates will move higher. Indeed, in a well-functioning economy fixed mortgage rates will be closer to 6 percent.

The entire interview can be found at http://economix.blogs.nytimes.com/2011/05/11/is-another-housing-crash-coming/?scp=6&sq=rent%20ratio&st=Search The still high price-to-rent ratio means that home buyers shouldn’t be in a rush to buy a home, but owning is quickly looking more attractive, and it won’t be long before owning is once again more financially attractive than renting.

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Media Mogul John Malone is the Largest Land Owner in U.S.

Nora Betz — Thu, 13 Oct 2011 21:03:32 +0000

With Ted Turner a close runner up, John Malone is be the largest land owner in the United States. John Malone lives in Colorado and is chairman of Liberty Media which owns shares in the cable channel QVC, Expedia.com, Sirius XM satellite radio, and the Atlanta Braves baseball team. John told The Land Report that he was able to make major real estate purchases this year due to the drop in land prices and the inexpensive borrowing that he was able to qualify for.

John owns a total of 2,200,000 acres in U.S. including land in New Mexico, Colorado, and Wyoming where he raises horses and cattle. His largest purchase of land was almost 1 million acres of timberland in Maine and New Hampshire. In this area he intends to continue to supply wood to local paper mills. “John Cashwell, a consultant in Maine who is helping with the transaction, said the land came with a long-term wood-supply contract with Verso paper mills.”

Environmentalists are optimistic that John will manage the property responsibly by keeping it protected and open to the public for recreation. The land is made up of rolling hills with green spruce and fir trees, as well as maple and birch trees. “It is bisected by salmon rivers and dotted with lakes filled with brook trout and smallmouth bass and is home to moose, bears and lynx.”

Source: http://realestate.aol.com/blog/2011/10/13/john-malone-media-mogul-now-largest-landowner-in-america/
http://www.nytimes.com/2011/01/29/us/29land.html

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Let Your Owners Know You’re a Source for Real Estate News

Marc Courtenay — Mon, 03 Oct 2011 21:47:00 +0000

Rental property owners want managers who are keeping up with the latest trends and keeping their eyes peeled for ways to help their clients prosper. One of the ways you can impress them is by being the “conduit” of news about lucrative opportunities in today’s fast-changing economy. You can call them about the latest industry news. Give them some ideas on how they can take advantage of today’s real estate and financial trends. Impress them with your creativity and business acumen.

Many property managers are using emails and online “newsletters” to highlight what’s happening in the rental property market and the latest trends in interest rates and financing. Mortgage Rates are Falling and Mortgage Default Rates are Rising: “Carpe Diem!” Fixed mortgage rates fell to the lowest level in six decades for the second straight week. But few Americans can take advantage of the historically low rates because they are unable to qualify for new loans or refinanced mortgages. Freddie Mac said on Thursday September 15th that the average rate on the 30-year fixed mortgage fell to 4.09 percent this week, down from 4.12 percent. That’s the lowest rate seen in 60 years, going all the way back to 1951. The average rate on the 15-year mortgage, a popular refinancing option, fell to 3.30 percent from 3.33 percent. Economists say it is likely the lowest rate on the 15-year ever. Mortgage rates tend to track the yield on the 10-year Treasury note. Worries over Europe’s debt crisis are pushing investors to shift money into safe Treasuries, forcing the yield lower.

Let your clients and any qualified residential rental property investors that now is the best time ever to find new financing on homes to buy. If they have existing mortgage loans that are at higher rates or loans that are about to expire, recommend some eager lenders in your area who will help them take advantage of these record low interest rates. Some lenders are very motivated to offer financing in areas where the number of people needing affordable rental housing meets or exceeds the current supply. Many of these lenders are lowering and even waiving the loan charges and origination fees.

Today we learned that default notices sent to delinquent U.S. homeowners surged 33 percent in August from the previous month. Why is that important? Because it’s a sign that lenders are speeding up the foreclosure process after almost a year of delays, said RealtyTrac Inc. (http://www.realtytrac.com/trendcenter/trend.html).

California, Florida and Michigan were leading the nation in foreclosure activity as of the end of August. Nationwide 1 out of every 570 housing units received a foreclosure filing in August 2011. So the number of dislocated, former homeowners continues to increase. Their income may still be adequate though, and they’ll be looking for affordable rental housing.

Lenders seized 64,813 properties in August, a 4 percent decline from the previous month and a 32 percent slump from a year earlier, according to RealtyTrac. However some industry analysts are predicting that the jump in default notices means repossessions will probably increase in coming months as more foreclosures are processed. Some incredibly good “deals” on houses and duplexes appear to be growing in number around the nation.

Let your owners know this is “the best of both worlds”—low buy-in prices and record low interest rates with many motivated lenders. That’s a “perfect storm” for increasing your client’s rental unit inventory, and increasing your income. Meantime you’re owner-clients will realize you’re the “heads up” property manager who’s looking for ways to keep them prosperous and their rental income expanding.

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Is It Time to Invest in Rental Property?

Nora Betz — Mon, 12 Sep 2011 22:06:45 +0000

Now might be the perfect time to put invest in rental property. “As with many investments, the best time to get in is when most others are sitting on the sidelines,” reports CNN Money online. There are several reasons why now may be the best time to invest in rental property. Mortgage rates are at a 40 year low and home prices are almost rock bottom which will better enable you to enter the market. Recently, there has also been an increase in rent prices so landlords have been able to charge more for rent and the demand for rentals has risen in over 500 cities.

You may have to hold onto this property for a number of years to insure that the real estate market has enough time to recover and your investment to mature. The typical investor today plans on holding on to their property for 10 years according to a NAR survey.

If you are looking for a good deal, check with a local real estate agent who knows the area well and can educate you on your potential rental market. To make sure that you are going to charge a fair price for rent, you can check Craigslist for comparisons in the area. Once you have crunched the numbers, you can weigh your investment options and look for a property that fits your budget.

Source: http://money.cnn.com/2011/08/30/real_estate/rental_property_investing.moneymag/index.htm

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Protect and Grow Your Owner-Client Relationships

Marc Courtenay — Thu, 08 Sep 2011 00:15:59 +0000

In the world of property management the most important relationship a manager has (besides the relationship they have with themselves and their family) is with the person who hires them to manage their property.

It’s not easy to acquire a new owner-client, but once they’ve hired you it can be tempting to take that relationship for granted or to assume that your clients will always be loyal to you. Here are some suggestions and ideas that I’ve gleaned from my own personal experience and from interviewing a number of property managers on this critically important topic.

Build trust and then reinforce it. Your happiest clients are those who trust you and believe you’re looking after their best interests. These clients are also your best sources for referrals and recommendations. So be sure to regularly let your clients know how trustworthy you truly are. Whenever you save them money or go out of your way to serve their needs find a subtle way to let them know, even if it’s a quick phone call or a brief email message.

Use a quarterly or semi-annual mailing with a personal cover letter to remind your client-owners of how hard you’re working for them. Let them know about how you’re providing “exceptional service and results” on their behalf. Tell them you appreciate them and invite their feedback and questions. Keep them up-to-date on your ongoing efforts to employ the latest methods and technologies that help you keep their rental properties filled with satisfied, quality residents. Give specific examples of your expertise, your above-and-beyond management style, and any conferences, classes or association meetings you’ve attended on their behalf.

Know your owner-clients well and know what’s important to them. Remember their birthdays, anniversaries and the names of their children and grandchildren. In other words, make them feel as important to you and they really are. This coincides with the “Rule #1 for Protecting Your Owner-Client Relationship”; never, ever take that relationship for granted. Know enough about their wants, needs and feelings so you can effectively let them know on a regular basis that you value your relationship with them and that you care about them.

Study how your competition takes care of and manages relationships with their owner-clients. If your competition is as successful as or more successful than you, find out specifically what they are doing and how they are doing “it” in order to achieve and sustain that level of success.

Network with the “gatekeepers” in your community and area. Join local business networks and community service organizations so you can meet others who can spread the word about you and your property management business. Meet some of the most reputable accountants, attorneys, and financial professionals in your locale. Ask them what you can do to direct more clients their direction, and perhaps they’ll return the favor. Develop a reputation for being an ethical, helpful and competent property manager and your reputation will both precede you and follow you. Eventually word will get back to your current clients that they are fortunate to have retained your services.

Little things mean a lot in the property management business. Maintaining a strong rapport with your owner-clients derives from focusing on those “little things” and attending to the details that forge lasting loyalty and satisfied clients.

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Financial Management Plan

Mary Girsch-Bock — Thu, 01 Sep 2011 20:41:03 +0000

If you’re actively seeking new clients (and who isn’t) writing a solid management plan can go a long way towards signing that management contract. Multi-unit managers in particular have to show owners that they can do more than simply collect the rent and evict non-paying tenants. A good management plan shows owners a broad picture on exactly where you plan to take the property, and requires a high level of detailed information on everything from optimum rents to yearly operating costs.

When creating a new management plan, the following areas need to be as accurate as possible:
Optimum Rents – Keep in mind that most properties never rent all of their units at optimum levels. There are varying reasons for this; everything from a lack of popular amenities such as a swimming pool to the age of the property. Even market conditions can dictate the amount of rent that can be charged for a property.

Total Anticipated Revenue – While all property managers would love to be able to collect 100% of the revenue owed, realistically, you must account for rental losses that can occur. These losses reflect everything from unanticipated vacancies to tenant skips. It’s important to reflect this in the management plan, or owners will have an unrealistic expectation of revenue that will be hard to explain later.

Operating Costs – Be realistic when estimating expenses such as staff salaries, office supplies, minor repairs, insurance, taxes, and administrative and management costs. Better to be under budget than over.

Reserve Funds – If drafting a management plan for a large building, it’s vital that reserve funds be allocated and expensed in the management plan. A good estimate is between 10 – 15% of the total cost of all maintenance and repair expense for the previous year.

Five-Year Forecast – While a five year forecast is considerably more difficult to prepare, the level of information provided to potential clients can reassure them that you are the best choice to manage their building. A five-year forecast provides owners with a long-term projection of the income potential of the property, taking things such as annual rent increases, vacancy and rental losses, and expenses and adjusting the annual totals by a realistic percentage.

Preparing a realistic management plan is never an easy thing to do. Managers constantly stress about under or over-estimating revenues and costs, but if you let the market and your experience guide you, you’ll be signing more management contracts every day.

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