As our last blog post, 10 Signs Your Property Management Company is a Success shows, there are many indicators other than profits that are useful in gauging the health of your property management company. These links will look at a few of these indicators, providing advice on improving each of these important aspects of property management.

• #1. Your vacancy rates are low. Keeping vacancy rates in check is arguably the single most important task for any property manager. This article provides some tips on keeping those units filled!
• #4. Your tenants stay put. If your tenants are staying put on their own, that’s a great sign that you are doing a good job. That being said, every tenant could use a push in the right direction to renew their lease. Lease renewal incentives can go a long way to this end.
• #6. Associations and other professional organizations invite you to speak at events. Getting connected in the multi-family industry is one of the best ways to secure speaking gigs. A little networking allows you to get your name out there and showcase your expertise.
• #10. You like coming to work everyday. If you like coming to work everyday, chances are your property management business is already doing well. And if you like what you are doing, you will likely do a better job. Check out this article for some tips on keeping your property management company’s staff motivated and happy.

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While profitability is one great sign of success, there are also many other less tangible indicators that your property management business is doing well. Following is  a list of ten signs you’re running a good property management shop. How many items on this list apply to your business?

1. Your vacancy rates are low.
Low vacancy rates can mean any one (and often a combination of) several good things: 1) that you’re doing a good job marketing your property to new tenants; 2) that you’re maintaining existing tenants; and 3) that your units are generally sought-after.

2. You receive new property management clients from referrals.
In business, referrals are the sincerest form of flattery. When existing clientele are referring potential clients your way, it is a sure sign you’re doing things right.

3. You receive new tenants from referrals.
Chances are tenants who are displeased with your property aren’t going to recommend your property to their friends. As with client referrals, tenant referrals speak kindly of your work and may also indicate that you’ve successfully instated a good tenant referral program.

4. Your tenants stay put.
They like you, they really like you! As with all business, it costs far less to keep existing tenants than it does to find new ones. If your tenants tend to remain in your units for multiple lease periods, chances are you’re pricing your units right and making tenants feel well cared for.

5. Other property managers contact you for advice.
While it’s nice to keep some secrets to your success as your own proprietary information, you should feel good about what you do every time another property manager seeks out your advice. Being viewed as an authority in the field speaks well of your skill set.

6. Associations and other professional organizations invite you to speak at events.
This is a no-brainer, but if professional industry organizations are asking you to speak at events, it’s a sure sign you are viewed as an industry expert.

7. You have an online marketing strategy.
The size of your online presence doesn’t matter as much as the fact that it exists in the first place. Maybe your company has a robust web site or perhaps you limit your online activity to posting available units on Craigslist. Alternatively, maybe you favor social networking sites like Facebook or Twitter for marketing purposes. The main goal is that you have some sort of online presence, large or small.

8. Rental agents approach you.
In some areas, clients use real estate agents not only to assist them in purchasing a home, but also in renting one. Because these agents are paid to know rental properties, no one has a better overview of what’s out there. If these rental agents are approaching you to inquire about availability, chances are it means your properties stack up against the competition well.

9. Potential tenants approach you even when you’re not actively advertising vacant units.
This means your name and/or reputation has made a big enough impact that you’re a known commodity, available listings or not. Credit this to great marketing, great properties, or great customer service skills (or a combination of all three!).

10. You like coming to work every day.
If you enjoy what you do, you’re probably good at it. In property management, you deal with so many people: property owners, tenants, and vendors. Contentment in the workplace tends to translate to better relationships all around … and this means everybody wins.

How do you gauge your property management success? Let us and your fellow property managers know by posting a comment below.

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Targeting specialized properties, such as luxury or waterfront properties, can give your property management company a major competitive advantage by associating your company with a particular niche. That being said, property specialization can come with a variety of risks. These links will help you decide if specialization is a sound business decision for your company.

• This blog article provides some great tips on investing in waterfront properties — these concerns should not be overlooked during the course of due diligence.
• This e-book provides advice on profiting through another type of specialized property — student housing. If you own units close to a college or university campus, chances are finding tenants should be a breeze.
• If you operate in the area of a college or university but have not focused on student housing, you may want to check out our previous blog article to find out if renting to students is for you.
• Finding your own unique niche in the property management market can really help in a down economy. This article speaks to the importance of finding your own niche, and may help you identify just where that opportunity lies.

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There’s definitely much to be said for setting oneself apart from the pack in business. In fact, particularly when it comes to business, establishing a reputation that sets you apart from the pack in a certain niche or area of expertise can be invaluable. This allows you to be the go-to source when a client is seeking out specific information, thus distinguishing your company from the competition. Of course, there’s also a risk involved in all of this: When dabbling in specialties, you need to make sure there is ample clientele out there for that specialty to keep your business profitable. These considerations should come into play for property managers that are considering investing in unique or specialized properties, such as waterfront or luxury properties.

Following is a brief listing of essential pros and cons you should consider when determining whether or not adding more specialized properties to your portfolio is the right business decision for your company.

Pros

• Brand building. Specialized properties can assist in building your brand. For example, realtors in your area with clients looking to rent a luxury apartment will learn to go directly to you, setting your business apart from competitors.

• Market stability. It goes without saying that the economy and rental market are out of your control. However, certain sectors of the market are more stable than others—if you can identify one of those sectors and cater to it, this will go a long way toward insuring your business thrives even in difficult times. Look for niches to cater to in your own area. For example, if there is a high-profile hospital in your town that has historically weathered economic downturns well, investing in a nearby luxury building for this highly-paid sector may be a savvy investment.

Cons

• The Pigeon-Hole Effect. This pertains to those property managers who are only dabbling in specialized properties. If you manage a couple of high-profile luxury properties, but also have some more bread and butter mid-range properties under your care, local clients could come to associate you only with the more upscale housing – making it more difficult to appeal to those looking for more standard property choices.

• Market instability. While identifying a stable market and catering to it can work for you, it can also work against you. Let’s say, for example, you have invested in water-front properties, but live in an area that is prone to hurricanes or other unpredictable weather-related events. Potential damage aside, in the wake of such an event you may find that potential tenants are less willing to occupy such properties, thus harming your business potential.

When determining whether specialized properties are for you, take a long, careful look at what your reputation already is, how you want it to evolve, and how much effort that evolution will take. Before making an investment, also make sure you have carefully researched long-term trends and are both confident about sector stability and well aware of any potential hurdles you may encounter along the line.

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With vacancy rates much more indicative of a strong economy than a recession, it’s fair to say that the rental market in Boston is not a renters’ market. An influx of college students to Boston’s 50+ colleges and universities has led the way — apartments are increasingly hard to come by and prices are beginning to rise. These links can help you more effectively navigate Boston’s rental market.

• Craigslist is one of the most commonly used sites for rental marketing. It allows you to search for no-fee only apartments — rentals that are in demand in the Boston area due to many renters’ lack of liquidity in this economy.
• In addition to our article here on the Buildium blog, this article provides some good advice on renting to college students — a huge source of tenants in the Boston area.
• The Boston Real Estate Blog is a great source of information pertinent to landlords and property managers in the Greater Boston area.
• Did you like our post on the Boston rental market? Check out our analysis of the rental markets in San Diego and St. Louis.

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The Boston rental market has long been a diverse landscape, offering a potential renter a wide array of unique neighborhoods and price options to choose from. Despite the recession, one theme has lingered over Greater Boston’s rental market in 2010 — whether you are looking at a multi-family in Southie, student housing in Allston, or a swanky Cambridge loft, this is not a renters’ market. Tight credit and an uncertain housing market have kept many renters from becoming homeowners, resulting in fewer available apartments and rental costs beginning to rise.

Painting a Picture of the Market, by the Numbers
According to REIS Inc, a New York based company that tracks metropolitan real estate markets focused on buildings of 40 or more units, home values in the Greater Boston area have fallen 16% since their peak in 2005. The change in the rental market has been much less severe — rental rates have fallen only 3.7% since their peak in 2008. With college enrollment surging as a result of the recession, Boston has seen a major influx of students to its more than 50 colleges and universities. These students require housing, and have been a driving force in lowering Greater Boston’s vacancy rates  to 6.2% in the second quarter of 2010, the lowest rate in the past 18 months. This low rate, described as “extraordinary” by Barry Bluestone, Northeastern University’s Dean of Public Policy and Urban Affairs, is consistent with rates found in a strong economy.

So What Can I Expect To Pay?
According to REIS, Boston represents the fourth most expensive rental market in the country behind New York City, San Francisco, and Fairfield, Connecticut. Average rents increased for the first time since 2008, rising 1.2% in the second quarter of 2010 — a fact that leaves many potential renters apprehensive. So what can you expect to pay? The following rates, according to Bostonrentalexchange.com, represent what you can expect to pay in the Somerville/Cambridge areas — areas with a good variety of lower, middle, and higher end apartments.

Studios:        $1000-$1400 per month
1-bedrooms: $1200-$1600 per month
2-bedrooms: $1500-$2000 per month
3-bedrooms: $1800-$2500 per month
4-bedrooms: $2500-$3200 per month

Where do the Opportunities Lie?
With high prices and few deals available, the rental market in Boston does not provide a whole lot of opportunity for potential renters. Our best advice is if you find a rental unit that you like, jump on it — this is not a market conducive to “shopping it out.” If you are a landlord or property management professional, opportunities are abundant. Many property managers are already beginning to repeal many of the incentive programs that they implemented in the past few years in an effort to attract more tenants. Landlords are increasingly renting their units themselves, as no-fee apartments are in particularly high demand due to many renters’ lack of liquidity. But for landlords and property managers alike, the student housing market offers a significant opportunity to buy low and rent high. If you have never considered renting to college students, now may be the time to tap into this potentially lucrative market.

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Following years in which St. Louis was winning awards for urban renewal, the combination of a high unemployment rate and out-migration has created a rental market that can be described as “somewhat soft.” An overabundance of available units, coupled with additional units still under construction, has made it very difficult for property management and real estate companies to keep their units occupied. Now is a great time to be a tenant, as you will likely be able to “shop around” and get a relatively low monthly rent payment.

• When vacancy rates are high, you simply cannot afford to be losing the tenants that you already have. You may want to consider lease renewal incentives to help keep your current tenants.
• This article is extremely current and will give you a better sense of where unemployment rates seem to be heading in the St. Louis area.
• Providing fantastic customer service by promptly responding to maintenance requests can be paramount to keeping tenants in your buildings. It also has the added bonus of keeping your boss happy.
• This website is a fantastic resource for news and information on the St. Louis real estate market.

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This week, we’re shifting our focus eastward of San Diego, CA to take a look at St. Louis, MO. Prior to the economic slump, St. Louis was making great strides—in fact, in 2006 St. Louis received the World Leadership Award for urban renewal. Additionally, the city houses eight Fortune 500 Companies, is a hot-spot for medical and biotech companies, and serves as the headquarters for several national companies, including Anheuser-Busch (acquired by a Belgian beer company in 2008), Enterprise Rent-A-Car, Energizer, Boeing Integrated Defense Systems, Wells Fargo Advisors, and Purina.

A September 1, 2010 article on STLToday.com describes the area’s current rental market as “somewhat soft.” Also according to the article, which is based on recent reports by Reis Inc. and the HUD’s most recent Housing Market Conditions Report, this market is due to St. Louis’ economy, which has suffered considerable job losses (as of September 1, the unemployment rate stood at 9.5%) and out-migration. The vacancy rate currently stands at 8.8%, with an average monthly apartment rent of $726. With these units already going unfilled, approximately 900 additional rental units are currently under construction in the region.

In other words, there is about to be even more competition for renters in an already-soft market. Happily, employment appears to be edging forward with 7,800 new jobs created in August 2010. Clearly, there’s competition for these jobs—according to job search engine Juju.com, there are 13 candidates for every available job in St. Louis.

All of this means that, like so many other places, St. Louis is beginning to edge forward in fits and starts. Long-term, the outlook is good. However, landlords in the St. Louis area still have to contend with an overabundance of housing for an area that is experiencing low employment rates and a migrating population. With more people re-entering the job market, potential tenants are out there—you just may have to work harder to attract them than in previous years. Also, with new housing options and competitors looking to fill their own vacancies, it’s essential to remain competitive and retain those tenants you already do have to the greatest extent possible.

A few tips with these thoughts in mind:

Be flexible. If a current or potential tenant expresses interest in another property that has slightly lower rent or includes paid heat, etc., sit down and really look at your budget. Can you consider matching such offers? Sure, it’s not an ideal scenario, but when faced with the alternative of an empty unit to fill, you may be better off with a slight rental rate cut.

Be on your A-game. Of course, you should always be on your landlord A-game, but in conditions like this it’s particularly important. Keep the tenants you do have and generate good word-of-mouth and referrals by taking extra care to stay on top of things. Handle maintenance requests as quickly as possible, get back to tenants quickly, and keep everything on your property in tip-top condition.

Stay on top of the market. Remember, other landlords in your area are in the same precarious position. Stay abreast of the tactics others are using by perusing rental sites, staying connected to online industry resources, and attending available meetings with local associations and professional groups. This will ensure that you stay up-to-date in the fluctuating market and generate your own ideas on which strategies are working for others in your profession.

For more tips and strategies that may be applicable to your own situation, be sure to check out last week’s blog post, Rental Market Focus: San Diego.

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