By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Let’s continue from my last blog. 

If it’s all about the client experience, and it is (just ask your clients), then how do you create a memorable and enjoyable client experience? Remember that it has to be a “real” experience because clients can spot fakes and phonies from a mile away. Therefore your team must internalize your business personality – it must become the natural way that they interact with clients and teammates as well as how they represent your brand and your service.

Step one in creating a happy client experience; inject soul into your business by finding your personality. Don’t be another ‘Me too’ business – find out what type of personality you want to portray to your clients. It doesn’t have to be fun and zany, although fun and zany may very well suit your company. Consider personality styles like classy, funky, professional, happy, colourful…the list is endless. However, you can’t fake a personality. It has to be real, genuine, and sincere. Your company has to be you. Brainstorm with your team. What is your personality? Only then can you know it, live it and be it.

Once you know what your business personality is, you have the foundation to design your business premises, uniforms, marketing and in fact anything that represents your company right down to the font you choose to use to reflect this personality. By doing this your team will by way of nature automatically begin to internalize your business personality. This strategy is evident in companies like Disney, Virgin, Starbucks – companies we recognize as having that special something we have come to know, love, and even better still…talk about!

Once you have discovered and created your own special and unique personality it will be easier to understand and therefore create the type of experience you wish your clients to experience.

Disney created the happiest place on earth and in doing so created a magical experience. Starbucks simply created “The Starbucks Experience.” They knew through business by design what nature of experience they wanted to create for their clients. Who would have thought that a coffee shop could create such an internationally recognized and sought after brand just by offering an experience? Well there is a little bit more to it than that, but for those millions of Starbucks fans around the world, me included, we go to Starbucks for our own particular flavour and size of coffee and because we have come to rely on the customer service standard we know will be consistent no matter where we might be in the world. When you know what you aim to achieve, you know how to achieve it. Therefore, there is no way we can create a happy client experience if that is not part of your business model.

Yes, even without business by design clients may commend you for the wonderful experience they have just had. Sadly, this praise is likely not consistent if service is not consistent across your team and client base – other team members could be letting your whole team (and company) down. And every time this happens it diminishes your brand and well as your reputation more and more.

Step two therefore is to design the style and feel of the client experience you wish to deliver –  ‘that special something’ when they step inside your business, see your brand and connect with your team. That special something that you just can’t seem to put your finger on, yet you know it’s there. Disney refers to it as “Feeling the Perfection.”

By understanding what your company personality is you are then in a position to align the client experience with your personality. For example if you had a personality that portrayed funk and panache, then to create a customer experience of  ”good old fashioned values” just wouldn’t coalesce. Design the experience you wish to create. It could be perfection, happy, memorable, gratifying, delightful, magical whatever the experience, once selected a method in which to deliver it needs to be developed…and that’s a whole new article.

Remember, to protect your brand and create repeat and referral clients you have to make things happen and not let things happen. Don’t become just another ‘Me2’ business. Design your business with purpose to have personality, soul and a consistent level of client service whereby the whole team is working to the same standards with the same level of enthusiasm and pulse.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

How do we know what service experience we want our clients to feel if we don’t know what that experience is ourselves? We don’t, so it’s no wonder our industry is mostly confused when it comes to delivering the best client experience.

Have you ever experienced that feeling when you walk into a particular business and feel a culture, energy, or vibe that makes you feel good – appreciated and respected – yet you just can’t put your finger on why you feel that way? I have on many occasions. It’s what I refer to as business with soul and personality – businesses that seem to know who they are and what they are there for. It’s all about business by design. Knowing what your purpose is and what experience you want to create for your clients.

Disney® knows that their purpose is to create happiness and they create a magical experience for their guests. It doesn’t matter whether their guests are visiting the parks, staying at one of their resorts, or attending a Disney® movie. If it has the name Disney® attached to it, you are assured of a magical experience.

And then there is Virgin. The Virgin Group, no matter which branch of the company you are dealing with, are all about fun and laughter and crazy pranks. Every client knows that whether they are flying with Virgin, subscribing to their telephone service, or using any one of their multitudes of products and services they are guaranteed to have a fun, happy and slightly zany experience. This is what I describe as a business with personality.

It’s ok to have personality – in fact it’s wonderful to have a business with personality. It is my belief and my humble opinion that our industry sadly lacks personality. Is it because we get swept up in day-to-day tasks and forget to put our head up from time to time and have some fun? Is it because we have no direction and no purpose? Or is it because our industry is built on so many ‘me too’ businesses? Have we been so busy looking over our shoulders copying what our competitors are doing that we have become clones of our competitors, thus lacking any personality of our own?

Personally, I think it is a combination of all of the above, but mostly I think it is because we are clones. We keep looking over our shoulder at our competitors and because we copy we look, feel, act, and interact just like them. In essence we become them, with no individuality whatsoever.

How many airlines are there in the world and how many airlines were already in operation when Richard Branson launched Virgin? Hundreds! And do you think Richard Branson looked around and thought ‘wow, these guys are all so serious, we better conform and be just like them?’ Somehow I really don’t think so. Virgin’s crazy antics, silly in-flight announcements and slightly zany team just wouldn’t seem quite right on a Qantas flight. Virgin created their own personality and very strategically injected that into everything Virgin does. Everyone who works for Virgin lives and breathes that same personality.

In my next post we will review how you can evaluate and inject your business with soul and personality, enabling you to create your own unique client experience. And remember, it is all about the experience.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

In my last entry, we discussed how it was possible in this great country of ours that a burglar could sue a property owner for injuries he sustained while robbing that same property owner.  In my next entry, we will discuss
why it is in the fine state of California that a tenant can sue his landlord for injuries sustained on the property which are inflicted by criminals.  But in this entry, I will get a little more practical:  we will discuss just what your responsibility is to your tenants regarding the liveability of the unit.

Just what do you – the property owner – have to provide to your residential tenant to remain in compliance with the law?  Well most of this is just common sense.  If people are going to live in the premises, if you do not provide the following, not only are you not being nice, but you are breaking the law:

• A weatherproof environment.  The unit has to have a roof and walls as well as doors and windows that are unbroken (more on this next entry!)
• Electricity.  It may come as a surprise to you that most will not want to rent your unit if they cannot plug in a TV and refridgerator.  Or it may not.
• Plumbing.  It may also come as a surprise to you that not only would most tenants enjoy a good shower and functioning toilet, but the law generally requires it.
• Gas and heating.  People don’t like to be cold and they don’t like to eat only cold food.
• Trash cans.  You have to provide your tenants with someplace to put their trash.
• Rat and vermin free.  The unit has to be free from debris and not be infested by rodents and vermin.
• Working floors and stairs.  There cannot be holes in your floors or stairs that do not function as such.  Your tenant should not have difficulty walking around the unit because of structural problems.

There are other requirements, as well: the bathtub and/or shower has to work; all living spaces (not closets) should have natural light via a window or skylight; there should be fire exits that perform that function; and the locks should work.  If you have a multi-unit complex, you are required to provide smoke detectors and keep the common areas clean and free from debris.

Without a doubt, readers of All Things Property Management will not be surprised to learn the law requires rental units to be liveable.  They will have the common sense and decency to provide these basic life amenities in their rental units.

And if their tenant happens to be Colin McCarthy, they would also have the good sense to go ahead and provide him with a Roku XDS in every room, have the unit wireless internet ready, and give him a cloud subscription in perpituity for unlimited storage of multimedia.  All at no extra cost.

This blog submission is only for purposes of disseminating information.  It does not constitute legal advice.  The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients.  No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto.  If you need legal advice, please hire licensed attorney in your state.

By Salvatore J. Friscia, San Diego Premier Property Management, San Diego, CA

Every property owner should require tenants to issue a refundable security deposit which is held on file to insure against non-performance of the lease agreement. Non-performance may be, but is not limited to, anything from damages occurring during occupancy to expenses accrued due to the tenants conduct or failure to pay rent.

The confusion begins with the property owner not knowing how much to require the tenant to issue for the security deposit. It is important to understand that security deposits for residential properties are controlled by statute and call for nondiscriminatory  and equal treatment. It is a prohibited discriminatory practice to charge a family a different amount then an applicant without children. It is also prohibited by law to require an excessive amount for the security deposit. In addition to collection of one month’s advanced rent, the maximum security deposit allowed (at least in the state of California) for an unfurnished unit is two months rent and three months rent for furnished properties. [California Civil Code 1950.5(c)] Check your local area laws for similar guidelines in your area.

Many owners will ask for the first and last months rent along with the security deposit. This is allowed; unfortunately most renters are unable to afford twice the rent plus the security deposit upfront. Some owners will offer their property with a reduced security deposit. The owner will advertise the rental property at $1,000 monthly requiring a security deposit of $500, half the monthly rent.
Now, initially this looks like a good idea, an incentive for the prospective tenant to take occupancy without having to pay a large amount upfront. This security deposit structure is common with larger apartment complexes. Most individual property owners don’t realize that large apartment complexes typically have a higher rent roll and more funds on reserve to draw from in the event of unexpected non-performance that exceeds the security deposit funds on file.

Now let’s look at why most professional residential property management companies would advise property owners to require the tenant’s security deposit to be at least equal to the initial rental rate. First, it weeds out the financially challenged tenants or prospective tenants that may be stretching their finances to reside in your property. If a prospective tenant is unable to pay the full security deposit upfront, this could be a sign of financial instability. Second, it provides an emergency buffer that can be used if the tenant defaults on their rent. Third, some tenants will vacate the property unannounced (without giving notice) thinking the security deposit can be used as the last months rent regardless of what the rental lease agreement states. When this occurs the property is usually in need of repairs and you are left without the last months rent and an insufficient security deposit to cover the cost associated with preparing the property for another tenant.

If this occurs you can serve a 3-day notice to pay rent or vacate — upon expiration  you can file an unlawful detainer action against the tenant. This will allow you to use the security deposit to make the necessary repairs and apply the remainder, if any, towards unpaid rent. If there is a remaining amount due, the owner could place a demand on the tenant for that amount and if unpaid pursue them in small claims court.

Depending on your property location and the local market conditions, when given the choice of having more or less security deposit funds on file, having more only makes sense. Stay consistent and within the law when requesting a security deposit and require your tenants to issue a deposit at least equal to the monthly rental rate.

By Peter Lamandre, Better by Design Realty, Scranton, PA

What to do when a tenant doesn’t pay or skips? I don’t mean hop-scotch, I mean what do you do when the tenant leaves the rental prior to the termination of his or her lease? The process can vary and depends upon the terms of the lease (if there is one). This post will provide some pointers on how to handle this less than ideal situation.

I’ve always tried to be human with my tenants and recognize that sometimes good people fall on hard times. The most important thing to remember is not to make this too personal – it is business and whereas you can empathize with the situation you can’t allow that empathy to blind you to the fact that the non-payment hurts your business. Have a specific policy set for dealing with the delinquent accounts. Here is an example action plan for collection, which based on location and local laws may need to be modified (but I think you will get the idea).

20th of the month – statements go out for next month
1st of the month – rent is due
5th of the month – late fees begin
7th of the month – collection calls/letters begin
10th of the month – eviction notices are posted
13th of the month – eviction filing begins

The big picture here is you need to have a plan and follow it. But what do you do if the tenant wants to make payments? Again it is all about having a plan in place. Some things to keep in mind when setting these policies…

What will you do if the tenant contacts you prior to the rent due date to alert you to a upcoming problem? This shows a certain degree of responsibility and an ownership of the problem. Will you be more willing to work with them? Over what period of time are you willing to spread out the payments? Do you want 100% of the balance in the next week or in the next 30 days? Are you willing to spread the payments over the next 3 months, etc? At what point does the risk that the tenant will default outweigh the demand for a vacant unit? Are you dealing with high demand and low vacancies resulting in a fast turnover or have units been sitting vacant making it cheaper to work something out rather then face the cost of a turnover? If they could not pay the rent what has changed that will allow them to pay the next month’s rent in addition to their outstanding balance? A good practice would be to basically “re-screen” the tenant based on the new payment. Here is an example:

The tenant owed rent of $1,000 and made a partial payment – she now owes $400 spread out over 3 months. This means the tenant would pay $1,133.33 per month using your normal approval method (it’s common to require income to be 2.5-3x rent). Do they make enough money to pay this debt back or are you only postponing the inevitable? Assuming you believe they can make the payments make sure you get the agreed upon payments in writing and have the tenant sign the document. That way if they fail to make the payments as agreed and you end up in court you can show you attempted to reconcile the problem. If you decide it is not in the best interests of the property for the tenant to remain in the unit, hold to your dates, and follow through with an eviction.

There are times when the tenant will leave without being evicted, more often than not when the tenant who owes you money can’t or won’t pay and leaves without telling you. I have even (rarely) had tenants pay the rent on the 1st of the month, clean the apartment, turn in the keys, and leave.

If the tenant has left and owes you money how do you find them? You typically need to find them to have them served with court papers – it’s rare that someone that owes you money lets you know where they are going so that you will have the chance to track them down. Good records will help here, especially place of employment and emergency contact information. If all else fails here is a great tip – once they have left the unit, wait a few days until the mail stops arriving, then mail the tenant a letter – any letter really but on the envelope place the words “RETURN SERVICE REQUESTED.” Visit the USPS.gov website to learn where the service statement needs to be. Then just wait… if the tenant is having their mail forwarded the post office will return your letter to you and provide you with the tenant’s new address. Once you have their new address you can have them served at their new residence and begin collection.

A large portion of our success as property managers is based on creating plans and following through with them – and dealing with missed or late tenant payments is no exception.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Business by design. This is a term I conceived several years ago when I realized that the agencies I was consulting for seemed to run their business operations by default. There seemed to be no real planning and they were mostly reliant on things just happening. The vast majority operated through reactive management rather than proactive management in their business approach. A recipe for disaster!

As the saying goes, “If you fail to plan, then you plan to fail.”

Business by default has caused a systemic problem negatively impacting the service and reputation of agencies offering leasing and management services. Think about it, if you already have a property management department did you design the business of your choice or did it just happen? Did you decide that you would offer leasing and management services and set about hiring an “experienced” property manager? In hiring an “experienced” property manager did you assume they would know enough to build the business up and create “systems” as they go? Did you decide that you would operate on minimal resources until there was enough money in the kitty to invest in further resources?

Due to the fact that many agencies are focused on sales first and then property management as an afterthought or a service that “should” be offered because it adds to the selling pool, there has, in most instances, been little or no planning. Hiring “experienced” property managers has led to a vicious cycle of trusting that you have the “right” property manager now and the last so called “experienced” property manager was just a “dud”. And so every time another property manager is lost or replaced a Pandora’s box of unresolved issues, disputes, and liability seems to be discovered. Somehow, the business owners console themselves that this time they found the right property manager and they will never have the problem that the last property manager caused.

And, how many business owners are guilty of hanging onto the property manager because they fear losing them will mean loss of business? It’s like a loaded gun constantly being held to your temple.

Oh and this one totally perplexes me. How many times when a new property manager has been employed have the agency systems and software been changed? I have even seen businesses going to the expense of changing their property management software on the advice of the property manager. Please understand that property managers advise that the software they are recommending is the best, because 99% of the time, it’s the only software or system they know. They feel lost and inadequate when they are working for an agency with unfamiliar software. This whole concept of changing software is quite ludicrous. Can you imagine retailers, banks, stockbrokers, travel or insurance agents, or in fact any business changing their software when the new employee recommends something else? Can you imagine what would happen if McDonalds’ franchise owners changed their software and systems on the advice and recommendation of a cashier level team member? They simply don’t do it, but for some reason the property management industry does.

Please remember to be aware and cautious of taking recommendations from the property manager about systems and software changes. A thorough due diligence is always recommended. I will go into this in more detail in later blogs.

Yes it’s a vicious circle and one that I’m sure many readers will relate to and I hope acknowledge.

So to understand the phrase “Business by Design” or “Business by Default” the first step to change is to plan your business of choice. By knowing this you are then in a position to develop the business that suits your market and offers a level of service to attract your local demographic.

It’s time to make your business happen and don’t just let it happen. Start planning and designing your business of choice.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Property management… just mentioning those two words usually sets off a plethora of comments, memories and grunts. Most of them are bad memories and grunts of frustration, annoyance and mild to wild anger. Yep, this sector of the real estate industry has grown up to be like the delinquent teenage child who is hell bent on causing pain and humility, rebellious in every sense of the word. You only have to ask around to discover that this is a problem the world over… yes, that’s right, the world over.

Why?

There are many reasons why, but the good news is there is no need to be seen as the delinquent and rebellious child anymore. Property management is set to become the golden child of every real estate business. For those agencies that don’t provide leasing and management services it’s time to sit up and listen. It’s time to feel confident in knowing that as a business owner you can design and deliver the leasing and management service of your choice.

It’s important to truly understand what we mean when we say the world is changing and so is the industry. Real estate businesses can no longer rely on commission from property sales alone. The last few years have highlighted the vulnerability each and every real estate business faces. First there was the Global Financial Crisis (GFC). The GFC should have been the wake up call to every real estate business owner needing to understand that they cannot rely on sales alone any longer.

The GFC led to 2011, the year, it seems, of catastrophic natural disasters that are impacting communities in Biblical proportions. My own State of Queensland, that has for many years suffered drought, was 91% flood impacted this past year. The floods were major and destroyed whole communities, even damaging central business districts including the main capital city of Brisbane. There have been earthquakes and continuing shakes in Christchurch, New Zealand, destroying whole communities. The earthquake, tsunami, and nuclear meltdown in Japan, also destroyed whole communities. The tornados touching down across the USA yet again destroyed whole communities in a matter of minutes… and the list go on.

Now I’m not saying it’s the end of the world, but it could certainly be the end of business for real estate brokerages in these areas. With whole communities wiped out and having to be rebuilt, there is little chance of sales for many years to come. There will be no properties to sell, as rebuilding is taking place, but it will also be many years for consumer confidence to return and for the memories to be softened before people start being drawn to these communities again. Real estate sales businesses will close down… however, there are still people who need somewhere to live in these areas, as they will still have ties to the community. The communities need to be rebuilt, businesses need to reopen, community centers, facilities and schools will begin to operate once agin. People will still live there and most will need temporary to long-term accommodation. For those real estate businesses that provide leasing and management services, they will survive, as they will still have a regular monthly income and asset value through their rental services.

Over my coming blogs, I will take you down a path of what has gone wrong in this industry along with how we can make it right. The solutions are available now. The systems, resources, and training are all available.

It’s time for change, a mindset change. Change comes through empowerment. I hope you enjoy my blogs as I aim to empower, educate, and inspire real estate agency owners and teams into being passionate about the leasing and management industry and their ‘chosen’ profession. It’s time to design the business of your choice, design the service of your choice, design the team of your choice, and become a service by choice in your community.

I’m excited and I would love to welcome you along this journey.

By Salvatore J. Friscia, San Diego Premier Property Management, San Diego, CA

If you own multi-family rental property in the southwestern United States you should know about RUBS (Ratio Utility Billing System). A large majority of multi-family rental properties in California, Arizona, Nevada, and New Mexico are individually metered for electric but have what’s called a “master” meter for water. The electric usage of the tenant is paid for by the tenant and the water and sewer usage for the entire complex is typically at the owner’s expense. This expense can be rather costly and eats into the NOI (net operating Income) of the property producing a negative effect on the value of the asset. Most industry experts foresee prolonged price increases for water consumption as the areas mentioned above are currently dealing with drought and long-term water conservation concerns. To mitigate this expense savvy investors have typically reduced water consumption by the installation of low flow toilets, low flow shower heads, and landscaping of indigenous plants or desert landscaping in common areas. While this helps reduce cost it doesn’t eliminate it and the owner is still burdened with an expense that continues to outpace reduction methods. Some owners have gone as far as installing sub-metering on each individual unit if the property’s current piping system allows it. This would seem to be the best solution but once again this is only feasible if the properties current piping system will allow you to make these changes. All of these methods are helpful and will curb water consumption and the cost associated with it but unfortunately all of these methods also require an initial capital investment by the owner to implement. Depending on the size of your property, this initial capital expense could be significant — sub-meters can cost anywhere from $200-$400 per unit not including installation fees.

The RUBS (Ratio Utility Billing System) uses an allocation formula that divides a property’s water bill among its residents based on square footage, number of occupants, or some other quantitative measure. It allows the owner to recover a substantial portion of the water and sewer cost by proportionately allocating the costs amongst the tenants. To implement RUBS it is recommended that an owner give monthly notices for at least 6 months to all tenants about the new program. This will give adequate time for the tenants to absorb the changes and understand the new cost associated with the billing. Studies have shown that the loss of tenants will be minimal and the cost associated with the savings from the program will outweigh any short-term vacancy bumps.

The owner then takes a percentage (typically 10% to 20%) from the total water bill for common area usage and allocates the remaining amount to the tenants. Some owners gradually increase the percentage for which tenants are responsible to ease tenants into the program over a yearly time frame. The RUBS program is a useful tool that eliminates the outlay of capital and the high cost associated with sub-metering. When implemented correctly the program will reduce operating expenses and increase the overall value of your property.