by Heather Blume | shared post from www.PropertyManagementInsider.com

Professional Development. I’m willing to bet that at some point in the last few months, you’ve heard those words from your boss or even your local apartment association.

Maybe you’re lucky enough to work for a company that has an entire department at the corporate office devoted to it. Companies spend thousands of dollars a year on professional development programs, providing everything from internal mentoring match-ups, to online and in-person training classes, to leadership retreats, to paying for memberships in their local associations that give employees access to networking and education opportunities within their industry.

So why are so many CEOs and companies reporting that their workforce is experiencing a significant “skills gap” with the demands of their current positions and the skills needed to “compete effectively in the coming years?”

Technology Outpacing Property Management Employee Skill Sets

According to Accenture’s 2013 research, nearly half of the companies surveyed (46%) share this skill gap fear for the future. Accenture postulates that one cause behind this gap is quick changes in both the marketplace and in technology, a situation that property management professionals know all too well. If I told you seven years ago that you needed to look into hiring someone to specialize in Facebook and Pinterest postings, you’d have looked at me like I was crazy; and yet today, there are entire teams working for multifamily housing companies that are devoted to social media management.

Critical Thinking Tops the Skills Gap

It’s not just the hard skills that are missing, like accounting, capital development planning, and NOI management; what’s really coming up on the light end of the scales are the soft skills. According to the Society for Human Resource Management, the four skills that top the gap are critical thought, professionalism, written communication, and leadership. This could stem from a combination of generational influences and the myth that these abilities are “talents” that people are born with, not a skill set that can be effectively taught, but whatever the cause, we are running out of people who can captain the ship, so to speak. And, as Accenture points out, there are definite ramifications to the persistence of these skill gaps among an employee base.

Those surveyed are preparing for a potential increase in operational costs due to a drop off of critical skills–66% of them think they will lose business to a competing company, and almost two-thirds of them – 64% – are anticipating negative effects on their income and business growth goals. Most alarmingly though, will be the possible effects on employee performance and productivity. Accenture discovered that 87% of respondents “believe that a skills gap increases stress on existing employees, who need to cope with new challenges while lacking the appropriate tool set of skills.”

Closing the Gap with Employee Training

The Accenture report emphasizes education as one of the main ways to combat this growing problem. The good news is that it seems a majority of companies are willing to embrace this resolution. When it comes to education dollars in 2014, 51% of the companies surveyed are expecting to increase the amount of money they’re investing in their training departments this year.

This is positive news. Since the recession, training has topped the list of budget cuts for many companies. Of these companies, 43% aren’t planning to increase their budget for training, but they do anticipate their amount of investment to keep true to current levels.

Do you believe that the skill levels of your employees and coworkers are sufficient enough to compete effectively in the coming years? What does your training budget look like? Are you experiencing a skill-set gap in your workplace, especially when it comes to social media?

Leading rental listing service Apartments.com recently asked more than 1,500 renters to describe why they would or would not move in 2014.

The results reveals both shifting trends in renter behavior, and a more lighthearted look at celebrity neighbor preferences.

Affordability, neighborhood and apartment size topped the list of reasons people said they are moving; close to half (46 percent) of former homeowners said they prefer renting; and internet listing services and word of mouth were named as the top two resources for renters during their apartment search.

“This year, both economic and lifestyle factors seem to be on the minds of most renters planning to move,” said Dick Burke, president of Apartments.com. “Many helpful online tools, like Apartments.com, are available to help renters make informed and responsible decisions with highly personalized searches, online video walk-throughs, the ability to post and read reviews and apps for iPhone and Android.”

Why are people moving in 2014? And, why aren’t they?

This year, moving decisions were heavily steered by economic factors. Shopping for a less expensive apartment topped the list of reasons renters are planning to move, while affordability topped the list for why renters are staying put. Other popular responses rounding out the top five reasons for whether or not to move included renter preferences, personal tastes, job security and family issues.

Apartments.com details the top five reasons survey respondents said they are moving in 2014:

Shopping for a less expensive apartment: 24.6%
Wanting to live in a different neighborhood: 13.6%
Looking for a bigger apartment: 12%
Change in marital status: 11.6%
Looking for a smaller apartment, or to live alone: 10%

When asked to check all that apply, the top five reasons that renters said they aren’t moving in 2014:

Can’t afford to move elsewhere: 47.3%
Like the neighborhood they live in: 40.8%
Like the apartment building they live in: 40.8%
Have job security: 22.5%
Like their neighbors: 12.4%

The 2014 Moving Trends Survey also shows that winning the lottery, a job loss or promotion, relationship changes, and noisy or annoying neighbors are the top reasons that would cause settled tenants to change their minds and move. Only 13% believed they could find something more affordable.

Why are previous homeowners choosing to rent in 2014?

Supporting a rapidly growing trend, close to half of all renters (44.1 percent) previously owned a home, up from 35.1 percent in 2013 and 33.6 percent in 2012. Interestingly, homeownership preferences are split right down the middle in 2014:

54 percent of former homeowners wish they still owned a home
46 percent of former homeowners prefer renting
51.2 percent of renters (who have never owned a home) prefer renting
48.8 percent of renters (who have never owned a home) would like to own a home right now

When asked to check all that apply, the majority of survey respondents see the following as benefits of renting vs. owning:

No unexpected repairs (leaky toilet, clogged sink, etc.): 59.9%
No or low maintenance (don’t need to shovel a driveway, cut grass, etc.): 51.4%
Flexibility to move: 51.3%

There was a sizable increase this year in previous homeowners who indicated that they are choosing to rent mainly because they cannot afford homeownership anymore, while the flexibility renting offers in choosing where to live remained as the number two reason for the third year in a row. Apartments.com provides the top five reasons former homeowners are choosing to rent in 2014, and compares these results to its 2013 survey. The statistics indicate the economy continues to be a driving factor for this group of renters:

Can’t afford homeownership anymore: 21.5% (up from 14.2% in 2013)
Flexibility renting offers in choosing where to live: 15% (down slightly from 15.7% in 2013)
Lost home due to foreclosure or divorce: 13% (up from 11.2% in 2013)
To relocate for employment: 12.4% (down from 13.3% in 2013)
Because renting is more affordable: 10.4% (down significantly from 22.2% in 2013)
Who will renters share their apartments with in 2014?

One area that seems to be a constant is renter living arrangements, which have remained nearly identical for the past three years:

Husband/wife/significant other and/or kids: 47.6%
Living alone: 42.6%
Roommate(s): 9.8%

Celebrity Preferences

Only 12 percent of renters planning to stay put in 2014 would change their minds (and move out) if Miley Cyrus moved in as their neighbor. “Apparently, most renters wouldn’t mind if guests at Miley’s parties have their hands in the air like they don’t care!” said Tammy Kotula, public relations and promotions manager, Apartments.com.

More renters would prefer Dakota Fanning (23.4 percent) as their celebrity renter neighbor than Ashley Greene (12.9 percent). Also, Chris Noth (15.1 percent) would be preferred as a celebrity renter neighbor over Nick Jonas (8.2 percent).

Source: Apartments.com

With rising water rates, persistent drought conditions, and a growing U.S. population, water conservation is becoming more important every day. Water and sewerage costs have doubled in one of every four municipalities over the last 12 years, which can hurt property managers today and in the future.

Did you know that March 2013 was the 5^th driest year nationally since 1895? According to the National Oceanic and Atmospheric Administration (NOAA), 50 percent of the U.S. continues to fight drought conditions. While conditions are improving, about seven percent of the contiguous U.S. was experiencing severe to extreme drought as of the end of September 2013. At the same time, other utility costs have increased faster than inflation, creating a need for conservation and improving efficiencies.

The time is right for apartment communities to begin—or improve on their existing—water conservation plans.

While implementing water conservation practices may sound like a very involved process, it doesn’t have to be. Typically, a few modifications with existing fixtures and systems will yield significant savings. A wealth of products and new technologies designed to reduce water consumption are readily available on the market today, helping properties save money while reducing their environmental impact.

Here are four easy water conservation tips to help you get started:

Tip 1: Go Low-Flow to Save Water

A number of plumbing products on the market today use less water but still get the job of rinsing, cleansing, and flushing done. The result is a large water savings which trickles down to a better bottom line.

Here are some smart solutions to save water in an apartment that are fast and easy replacements for your maintenance teams:

• Replacing a standard 2.5 gallon per minute (GPM) kitchen faucet aerator with a 1.5 GPM saves 40 percent
• Screwing in a 1.0 GPM aerator onto a 2.2 GPM bathroom faucet saves 54 percent and they are often $1 each or less
• Installing low-flow showerheads (2.0 GPM or lower) and low-flush toilets (1.28 gallons per flush or lower) save up to 50 percent in water consumption and your residents won’t notice a difference

Tip 2: Adjust Water Volume in Older Toilets

Older toilets that still function can be retrofitted with a dual flush system that reduces the amount of water used for liquids and it is less expensive than replacing the whole toilet. Dual flush systems work best with 1.6- to 3.5 gallon per flush (GFP) toilets but can also be used on 1.28 GPF.

Tip 3: Smart Landscaping Conserves Water

By installing smart controllers, those that detect moisture and track local weather then change watering patterns, will keep landscapes looking good while reducing consumption.

Commercial Evapotranspiration Technology (ET)-based controllers are basically a thermostat for an apartment property’s sprinkler system. ET systems tell the water source when to turn on and off based on current conditions so that overwatering in minimized or even eliminated.

The beauty of installing smart controllers is that they are typically an even swap for the old controller. No additional upgrade of the irrigation system is necessary, and the change-out can be done rather quickly.

Tip 4: Look for WaterSense-Certified Products

Water conservation products certified by WaterSense®, a partnership program administered by the Environmental Protection Agency (EPA), are readily available and are certified to use less water while not affecting efficacy.

The WaterSense program was launched to provide businesses and consumers with easy ways to save water, as both a label for products and a resource to people. To get a better idea of what the impact of upgrading to WaterSense products could be for your property, check out the WaterSense Water Savings Calculator. After filling in a couple of fields, the calculator will determine how much water, electricity, greenhouse gas emissions, and money can be saved by replacing your current fixtures with WaterSense certified fixtures.

Apartment communities have a great opportunity to conserve water by making a few small tweaks in their buying by seeking out water conservation products. Properties will not only save on their utility bills but will leave more water for future generations. It’s a win-win!

Elizabeth Whited | Company Website | LinkedIn Connect | Elizabeth is the Operations Coordinator at the Rent Rite Directory. She has written educational articles for multifamily magazines and Real Estate websites to help Property Managers and Owners improve their properties, and reduce crime in their communities.

After reports surfaced that the U.S. Department of Veterans Affairs was having logistical problems processing claims due to the literal piles of paperwork they had accumulated, it became apparent to the rest of the world who hadn’t begun the process of going paperless, that it was time to get serious.

For those in the multifamily industry, the idea of going paperless not only means a chance to reduce overall expenses, but once established, can mean both time saved and a boost in the overall quality of work produced.

From clearing of the office clutter to the fact that going paperless can be a great marketing message, we have some great tips for promoting a paper-free zone in your work-zone.

Why should management companies eliminate paper leases?

When it comes to the business of leasing, going paperless can present a whole new series of benefits. One of the foremost benefits is the ability to execute leases anywhere in the field. Since you’re digitally transmitting everything, only a wireless internet connection and connectable device are needed to present, sign, and distribute those documents to the tenants email and a virtual office file that your staff shares access to.

Agents will spend less time and money traveling and even less energy consuming detailed audits of all the properties in your portfolio when all the documents are electronically accessible.

Industry professionals estimate that up to 40% of the time in leasing offices is spent dealing with paper to make copies, set up files, to send faxes, or simply just searching through existing files to find need documents.

In the long run, it’s time that could be spent being proactive and accomplishing tasks that affect the bottom-line.

How can management companies get e-signatures on their leases when they are paperless?

If you’re just looking to store and share documents online with your users/agents, then Google Docs is a simple, no-cost solution. If you need to take it a step further, Adobe EchoSign is a free e-signature app that allows you to both sign documents digitally and send those documents via email or Google Docs/Drive.

If you are looking to have that same power of Drive/Docs while also adding the ability to capture actual legal signatures on your leasing documents in an all-in-one environment, however, then you’ll need to enlist the services of a company like DocuSign, Lease Runner, SyndicIT Services, or On-Site.

DocuSign has been endorsed by NAR as their official electronic signature provider and boasts that over 115,000 real estate professionals are currently using the program to manage everything from residential and commercial real estate, property management, mortgage, escrow and more

LeaseRunner, like On-Site, is a 100% paperless, time saving application that maintains editable lease documents that comply with all 50 states and a variety of property types. The documents have the ability to capture electronic signatures and store everything digitally.

What do the statistics say about companies who go paperless?

When you look at the sheer impact the paper and ink industry has on the environment, paper consumption in America has generated approximately 85 million tons of paper waste. The pulp and paper industry in the United States is actually the 2nd largest consumer of energy.

According to the statistics gathered by GoPaperless.com, the average office worker prints around 10,000 pages per year. That’s equivalent to two-and-a-half fully grown trees and 56 gallons of oil per office worker, per year.

By going paperless, the study shows that the average multifamily real estate office can see benefits that extend into not only a reduction in the business costs associated with paper, printers, and ink and toner cartridges, but a reduction in physical filing cabinets and the time it takes associates to search for and retrieve documents.

Going paperless can also mean that a business can begin to employ services in a mobile environment that will promote a professional image and a more customer service oriented way of conducting day-to-day business.

The protocols set in place by a paperless office management system have been shown to have the added benefits of providing the company a secure way of backing up all documents, granting better access to real time updates and document delivery, as well as creating a marketing message that lets the business promote the fact that it is environmentally friendly.

As far as managing statements and paying bills goes, the more you do online the less time and energy you’ll spend managing this part of your business. When it comes to going paperless, it’s a trend that is not going away and one that makes the kind of good “sense” that can be seen in your bottom-line.

Justin Alanis | Company Website | LinkedIn Connect |Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

How often are residents thanked for the choice to live at a property?

Most choices for housing involve long term commitments, buying a house or a condo, mortgage etc. Individuals who rent can make a change in an instant, granted breaking a lease has financial consequences, but an unsatisfied resident has the ability to mmake a change right now.

Taking the time to acknowledge the length of time a resident has lived at a property, thanking them for their continued loyalty, asking if any service or assistance is needed, can reinforce that commitment.

Over the top efforts demonstrating customer service secure publicity and industry comparisons, but simple acts of appreciation, offered with sincerity hold more value than crazy promotions.

Generally speaking, the staff at a property doesn’t have much contact with a resident after the move in..lease renewal, late rent notices and requests for maintenance. Taking the time to insure every contact ends on a positive note will build a stronger relationship with a resident.

Offering the comment, “Thank you for choosing our property for your home,” can go a long way in building this relationship.

Staff at property often has anecdotal stories about demanding residents, or individuals that inflict substantial damage discovered at the time of move out. For most locations, the 80/20 rule typifies our residents, 20% of the residents use 80% of the staff resources. The remaining 80%, the individuals who pay their rent on time, renew without negotiating, take great care of their apartment home, and generally abide by the community policy and procedures; are largely ignored for their compliance.

Offering appreciation when the opportunity presents itself, or creating resident appreciation events can build a customer service atmosphere at a property.

Just as many receipts or monthly statements, include the phrase, we appreciate your business, how could this be incorporated into daily business practice?

Include this phrase:
-on rent receipts
-service request notification
-train staff to acknowledge resident tenancy during conversations, and communicaitons, such as lease renewals.

Residents often believe they are nothing more than an apartment number, or an account on a ledger. Insuring residents the staff is aware of the individual choice and ongoing commitment will have an influence on renewal decisions, or building the attitude where a resident wants to encourage friends and family to consider your property when looking for an apartment home.

Lori Hammond | Company Website | LinkedIn Connect | Lori has 30+ years’ experience in the Property Management Industry, working with both market rate and affordable housing.  Lori has been privileged to work with some tremendous industry leaders during employment tenures with Oxford Management, NHP Management, AIMCO, Alliance Residential, Boston Capital, The Sterling Group, P.K. Housing and currently Management Resources Development.

by Alexis Hammond on February 12, 2014 in Property Management Software

In December we held a contest that asked you how you would be appealing to Millennial renters in 2014. Since announcing the winners in December, we’ve had a chance to go through all of your responses, and we definitely noticed a trend. An overwhelming number of you made it clear what you thought would attract Millennial renters: “Get social, be mobile, provide more online services and targeted amenities!”

It’s no surprise that Gen-Y renters are tech-savvy individuals who are active on social media and love their mobile devices. Many of you recognized the importance of increasing your social media presence and providing services to renters online. Here were some of our favorite responses:

Get Social

“To start with, we have recently begun a campaign for boosting our social media presence, with an emphasis on education rather than sales. Helping the new generation understand what questions they should ask, and what to expect, paints us as the experts in our area. Who would you rather work with? Someone who’s forcing a property into your Twitter feed or someone who wants to help you find the property that’s best suited for your needs?”-David L, FL

Be Mobile

“Recognizing that Millennials tend to utilize smartphones for all tasks (be it research, communication, or photos) we have started the process to optimize our websites to be more mobile friendly. Making it easier to view photos, fill out an application, or schedule an appointment right from their phone.”-David L., FL

More Online Services

“Everything from looking for a place to rent, to applying, to signing the lease, to submitting maintenance requests—are ALL online!”-Palisades Property Management, OR

“I know millennial renters want to utilize the web and so do I. We want almost all resident and owner communication to be done through our software, whether it be work orders, rental payments, lease renewals, owner deposits, vendor payments, etc.”-Lisa T., OH

“Continue to use technology to grow and reach them. We now have online applications and ability to pay almost all fees online. We use all forms of electronic media to communicate, and we are continually updating our website with the freshest images and up to date availability.”-Anna G., TX

Targeted Amenities

“Work-life balance is important to the newest generation of professionals, who want to maintain a healthy balance between their working and professional lives. Amenities are a huge appeal factor for renters. Larger, open common rooms are popular. Many developers have added fitness centers and outdoor areas, including yoga and Pilates studios to appeal to renters. Outdoor spaces such as patios, decks and pools are a lure for renters who want to host friends and family. Other amenities include dog runs, garden plots and bike storage.”-Frank F., NY

“We are building new apartments with smaller floor plans, high ceilings so they feel bigger and have lots of light, and with lots of storage built in.  We are adding bike storage locks directly on to the walls and ceilings —so they can hang their bike in the apartment.  We are also including common area outdoor BBQs for socializing.”-Keegan M., CA

… And if all else fails, some of you weren’t afraid to think outside the box:

“To appeal to Millennial renters I’m going to hand out candy.”-Dan B., CT

“I will wear a banana costume and wave a sign in downtown Minneapolis … ”-Blake L., MN

We really enjoyed reading through all of your insightful, and sometimes humorous, responses. Thanks to all who participated in our contest!

Appfolio | Company Website | LinkedIn Connect | AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money.  Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.

Property owners in Colorado are facing unexpected fallout from the state’s recent pot legalization rules: explosions.

There have been a number of recent reports of explosions caused by residents attempting to extract hash oil from marijuana plants. This process requires the use of butane and other volatile chemicals.

The problem has become so pronounced that it prompted the Colorado Information Analysis Center to post a bulletin to first responders warning of the increasingly widespread practice of butane hash oil extraction. According to CIAC, the recent trend of explosions has resulted in fires, burns, broken windows, and damaged walls.

Signs of hash oil extraction can be subtle, and include metal, glass, or PVC piping that is capped. These materials look like pipe bombs. Explosions from hash oil production are often mistaken for meth lab explosions. CIAC warns that in states like Colorado with legalized marijuana use, these incidents appear to be increasing.

Colorado is the only state that regulates the production of hash oil but enforcement is spotty, and explosions persist, according to the CIAC.

Butane gas is the most common chemical used for extraction, but hash oil can also be created by boiling the cannabis in a solvent, which then evaporates leaving behind the oil. Other common solvents include hexane, isopropyl alcohol, ethanol, and dry ice.

The problems result from the use of these flammable solvents, typically without proper ventilation. Resulting vapors stay low to the floor, and can ignite pilot lights, outlets or any open flame.

Rental property owners can protect their properties from such practices by taking care when screening tenants, staying clear of “cash-only” applicants, those with poor credit, and tenants with criminal backgrounds. Restricting marijuana in rental properties is another avenue that can provide legal recourse for landlords. Use a lease that is tough on crime. Frequent inspections of the rental also can lower the likelihood of problems.

American Apartment Owners Association | Company Website | Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing.

Rental property renovations open the doors for financial rewards through potential rental or selling price increases. However, deciding which renovations to undertake that will ultimately reap the most benefits can be complex. Interestingly, there’s a lot of advice offered by real estate professionals about which renovations are most worthwhile for investors, and these experts know what improvements renters really want.

Even more interesting – they know how to get the most bang for your buck when it comes to making wise property renovations, understanding the correlation between curb appeal and rental rates, how to choose remodeling projects that preserve equity and the integrity of the property.

Still Turning and Burning your Property? Don’t Get Burned Yourself

More property investors are realizing the benefits of treating their rental homes more like “their home” as opposed to another “unit.” Even scaled down renovations and remodeling projects can help increase equity and help you maintain a top-notch resident base. Investing in major projects is just that – major – so keep in mind that even minor improvements can make a tremendous long-term difference for both renters and owners.

However, some major projects cannot be ignored, and this is when treating it as a home comes into play for investors. One major roofing failure can spell disaster, put residents out of their home, and you temporarily out of income – facing a huge repair bill. Itemize your “to do” list according to importance, putting preserving the integrity of your dwelling on top of the list. Everything else you should evaluate by cost, the improvement’s potential lifespan, and consider any applicable tax credits and return on investment.

Cleaning, Cleaning, Cleaning – The #1 Return on Investment for Rental Properties

That’s right – a clean home is a desirable home. Those appliances don’t have to be top condition or modern, just clean! Carpets and flooring don’t need to be replaced when a good shampooing or deep cleaning may make them look brand new again.

Consider that the lifespan of carpeting averages about 11 years, according Old House Web’s experts, but wood flooring and many types of tile can last a lifetime. If replacement is imminent, consider upgrading to resilient and lovely Terrazzo tile or a natural, eco-friendly wood. If there are only a few flaws, chips, scratches, or imperfections that can be resolved with spot replacements or partial refinishing, then the cost-effective solution is clear!

Interior and Exterior Painting

Curb appeal extends to the interiors in the eyes of a renter; after all, they have to see those walls every day. If you’ve rented to a smoker or the same resident for many years, you’re likely justified in going with a complete overhaul with interior paint. However, you might be able to get away with a few walls here and again, but it’s such an inexpensive renovation, it’s best to refresh everything for your new charge.

Kitchens and Bathrooms – To Renovate or Resurface?

These two improvements are known for their tremendous return on investment; however, they are also known for their high initial investment. Contractor and remodeling experts are promoting the benefits of resurfacing over replacements. Resurfacing bathtubs, showers, and cabinetry are far more cost efficient projects than replacing them, particularly if they are in decent condition. The pros at Old House Web estimate that acrylic baths have a 15-year lifespan, so estimate “how much life” your major fixtures and appliances have left before considering costly replacements.

Final Considerations in Remodeling Rental Properties

Your budget, how much time you have, and the condition of your property certainly play a role in your remodeling decisions; however, as a wise investor you have to know when to “turn and burn” and when to take your time and renovate units as though you were living there. You’ll see happier residents and may even get some recommendations through your efforts of being a responsible and caring landlord.

Appfolio | Company Website | LinkedIn Connect | AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money.  Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.

Another report – this time the Securitization Weekly Overview from Bank of America-Merrill Lynch (BAC) – is forecasting a shift away from single-family home purchases to a rental market.

Granted, this is not the first time a report predicting multifamily growth has hit in the past few months, but it does reiterate a common theme – investors are betting on multifamily more often.

Just last week, HousingWire reported that more younger Americans are expected to pile into the multifamily market after spending years in their parents houses or sharing apartments with roommates.

But this younger crowd, while keen on homeownership, apparently lacks the momentum, due to job constraints and a general inability to obtain a mortgage.

It’s something Chris Flanagan, MBS/ABS Strategist with Bank of America-Merrill Lynch and MBS Strategist Justin Borst also recognized in their newly published research.

“The December housing starts report provided some confirmation of the theme we discussed last week, which was that it appears as if a structural shift away from getting a mortgage and buying a single-family home to just being a renter is underway,” the pair said.

Such a transition is expected to subdue the possibility of dramatic changes in the single-family mortgage-backed securities market.

Flanagan and Borst note that “this shift should work to keep supply of single-family MBS at what may be surprisingly low levels well into the future. We also noted that we think this shift gives the Fed ample cover to taper its MBS purchases without much impact to mortgage rates, since gross supply of MBS may be shrinking more quickly than the Fed plans to taper.”

When comparing multifamily production today to the pre-housing crisis era, it is clear a major shift is taking place. BofA-Merrill Lynch notes that pre-crisis, the multifamily share of housing production hovered at roughly 20%, or one in five home starts.

Jump years ahead to today, and the latest multifamily share of production is up 33% and accounts for one in three homes.

The same analysts concede that with this higher multifamily share trend remaining for years now, a new “equilibrium” has apparently been reached.

The trend prompted Resource Real Estate, a firm led by CEO Alan Feldman, to announce last year that it will continue to try and serve the income-bracket stretching from $30,000 to $70,000 a year by refurbishing older apartment complexes for this growing segment.

“We touch real estate two main ways, we put equity capital towards investing, and we lend across a number of asset classes,” Feldman told HousingWire last summer.

By December, his firm was still employing this strategy, noting the forgotten middle-class is trending even more towards renting.

It’s a common theme that the numbers from BofA-Merrill Lynch seem to confirm for now.

Kerri Ann Panchuk

Picture this – you have a large project on the horizon and you know you will need third-party assistance in order to complete it.   How do you determine who your vendor partners will be to ensure a successful project?

First, it is important to understand your short and long term goals and basic scope of work so you can best communicate to those that will be supplying you a proposal.  Next, create an RFP (request for proposal).  Remember, it does not have to be fancy or extremely elaborate. The goal is to ensure all vendors are bidding on the same scope of work.  Apple to apple comparisons related to pricing, timing, value and potential warranty included.

You can always ask for suggestions or examples of work in the RFP.  This will allow your potential vendors to share their expertise and creative ideas that may elevate your project and potentially exceed your expectations.  Once you receive the RFP responses – look to see who responded on-time, who took the time to follow your specific instructions for submission, and who went above and beyond in their response.  These simple checkpoints will tell a lot about who may be the best match for your project.  There are excellent vendor options out there and there is no reason to settle.  Always follow your company guidelines on insurance requirements, reference checking and best practices to protect your asset when choosing such vendors.

Once you have narrowed down your choice, invite your chosen vendor to the site for a walk-through and a deeper discussion related to the scope of work and goals for the project.  This will let you know if your communication style and personality is a good match.  Now it is time to award the assignment.  Do this immediately upon the selection process and notify those that will not be participating, and thank them for their time.  If you are sincere, let them know you will consider them for future projects.  Proceed to contract and begin the project.

Communication is key throughout the process, be sure you are available for any potential questions and set the tone and expectations so everyone remains on the same page.   If your selected vendor meets or exceeds your expectations be sure to tell them and thank them for a job well done, and pay them according to your agreed contract.  Celebrate your successful project!

MultifamilyZone.com | Company Website | The mission at MultifamilyZone is to assist multifamily professionals in finding the products and services to help them achieve top competitive positioning.  Through an engaging and interactive website, we will provide current information on a wide-range of qualified, pre-screened vendor partners.  As wll, we spotlight industry news and trends to become a primary resource for all things property management.