rental housing journal on-site may 2016

Text 51WAYS to 44222to receive the FREE e-book

51 Ways to Increase Your Rental Property Cash Flow

(And 10 Ways to Ruin It)

3. Nightly Rentals – The Hottest Investments Right Now?

4. The Increasing Cost of Owning Properties with Onsite Staff

6. Crowdfunding and Peer2Peer Lending for Real Estate Investors – The Disruptors We Want!

17,000 Papers Mailed Monthly To Puget Sound Apartment Owners, Property Managers & Maintenance PersonnelPublished in association with Washington Association, IREM & Washington Multifamily Housing Association

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Rental Housing Journal On-Site May 2016

9. The Solution to Housing Policy - Working Together

11. Dear Maintenance Men – Water Heaters

12. Ask the Secret Shopper – Alive After Five

13. 5 Reasons Why A Multifamily Property Management Career is Awesome!

continued on page 8

continued on page 7continued on page 5

15. Adding Value with Quick and Easy Deck Upgrades

17. US Housing Market Shows Signs of Flattening, According to HomeUnion

18. Dear Maintenance Men – Bonus Article!

Average Rents Break $1,000 in Pierce-Kitsap-Thurston

Seattle - Apartment Insights 1st quarter results show average rents climbed $19 to $1,014 per month and $1.15 per square foot according to Tom Cain, the firm’s principal.

The data are from his Seattle firm’s sta-tistics and trends on 50+ unit properties in Pierce, Kitsap and Thurston counties.

Vacancy: 3.97% The market vacancy for our nonran-

dom survey of conventional, stabilized 50+ unit properties in all three counties is 3.97%, slightly better than fourth quar-ter’s 4.02%. The vacancy rate was 4.37% a year ago.

The rate for all properties including those in lease-up is 4.49%, up from 4.40% last quarter.

Charm Residents with Outdoor Living Spaces

By Scott Matthews, Director, Strategic Accounts, The Home Depot

Transforming outdoor spaces into comfortable, functional extensions of interior living areas is in demand

for multifamily communities. Residents are interested in spending more time outside, and creating an inviting outdoor space for your property will help attract prospective residents and retain cur-rent tenants, especially during the warm months and moving season.

Here are some ideas for outdoor up-grades that will give residents a place to engage with other tenants, family and

9 Out-of-the-Box

Questions and Tactics Multifamily

Investors Should

Consider Using

By Richard Montgomery

Investing in multifamily housing and apartments requires extra investiga-tion, sometimes called due diligence

by attorneys, for investors who want to be certain they do not make a mistake. This extra investigation and these questions are beyond what a real estate investor may do normally for a typical commercial real es-tate investment. As a real estate investor, once you go beyond multifamily rentals such as duplexes or fourplexes, you enter the commercial real estate area. Here are 9 out-of-the-box questions you should be asking, or at least consider asking, before you purchase that multifamily or apart-ment building.

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continued on page 19

Nightly RentalsThe Hottest Investment Right Now?

How to earn 2-5 times the gross profit of traditional rental properties

I am sure by now you have heard of the many nightly rental websites that al-low property owners to advertise their

homes, apartments, and even extra rooms for rent on a nightly basis. There have of course been some controversies over this new industry as it takes revenue away from the hotel industry and thus decreases the amount of taxes that local cities receive from the transient tax. One way or anoth-er, you have likely heard of this industry by now. Have you taken the time to ana-lyze this as a viable investment opportu-nity, though? When you start running the numbers and seeing what others are do-ing, then it starts looking very attractive.

If you take your typical rental that rents for $1200-1500 per month and convert it to a nightly rental, you should see about double the gross income. You will have some additional costs of course, and if you have the right property in the right location that can easily increase to 4x the long term rental income. This all sounds nice, but of course you are naturally won-dering about the additional costs associ-ated with nightly rentals and the added time it takes to manage these properties.

The largest cost is the initial design and furnishing of the unit. You will need to fully furnish these units to make sure they are attractive. Furnishing doesn’t

end with just the beds and living room furniture. You should ultimately have a fully stocked home, so a complete set of dishes, tableware, pots, pans, etc. will be needed. You will also want to pay close attention to the details - keep in mind that you are competing with hotels that have onsite staff. So, go the extra mile and provide some travel toothpaste, tooth-brushes, Q-tips, shampoo, and ultimately anything else that someone could forget to pack. You also want to make sure that all of the walls are decorated. Obviously this starts with a good paint scheme, but

extends to the artwork on the walls and knickknacks on the shelves.

Many of the successful nightly rental homes incorporate some sort of theme in their design. It can be a design that highlights the local area and attractions or something much more unique. When picking out furniture it is good to re-member that you want your guests to feel very comfortable and at home. So you shouldn’t go with furniture that feels “cheap”; with that said you also don’t have to get expensive name brand furniture either. For many nightly rental investors,

the step of picking out furniture or keep-ing an eye out for unique furniture items that they can incorporate is the most ex-citing part of the process.

The other cost is that you will have to have the unit cleaned and turned over af-ter every visitor. If you go with a manage-ment company like IRC Real Estate, then you can typically take advantage of the volume discount they get from their ven-dors. This expense should be in the $50-$150 range depending on size and what

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The Increasing Cost Of Owning Properties With Onsite Staff

By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

Even though the sales of apart-ments are reaching very low CAP rates with expectations of high re-

turns, a number of laws aiming to pro-tect workers have increased the cost of managing apartments.

In Oregon, these laws include state mandated minimum wage increases and sick leave. On the federal level, required health insurance (for full time employees) and potential changes in federal overtime rules keep increasing the costs to staff with onsite management, maintenance and operations.

Sick leaveAs of January 2016, Oregon joined Cal-

ifornia, Connecticut and Massachusetts in requiring employers with more than ten employees to offer 40 hours of paid sick leave. Employers with nine or fewer workers must provide 40 hours of unpaid sick time.

In Portland, the threshold is lower. Em-ployers with six or more workers must provide paid leave while those with five or less must offer unpaid sick time. Lawmak-ers carved out an exception for Portland, which passed it own sick leave ordinance two years earlier, and effectively canceled out Salem’s law, which was due to take ef-fect July 1, 2016 and would have applied to all employers, regardless of size.

The vast majority of Oregon’s work-force (excluding federal employees) is covered by the law, meaning full-time, part-time, temporary and seasonal work-ers will accrue sick time.

Definition of family members ex-panded

The new law allows the use of sick time to care for and/or or help seek diagnosis and treatment (including preventative) of a family member with a mental or physi-

cal illness, injury or health condition. In addition, sick leave may be used to deal with the death of a family member.

As part of this process, the statute and regulations defining a “family mem-ber” have been broadened. The defini-tion now includes an employee’s spouse, same-gender domestic partner, custodial parent, non-custodial parent, adoptive parent, foster parent, biological parent, step-parent, parent-in-law, a parent of an employee’s same-gender domestic part-

ner, an employee’s grandparent or grand-child, a biological, adopted, foster child or stepchild, or the child of an employee’s same-gender domestic partner, and a per-son with whom the employee is or was in a relationship of in loco parentis.

Minimum wage increases in OregonThe state’s minimum wage as of Janu-

ary 2016 was $9.25. Beginning in July of


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gether. Our investment goals are similar; we are each high-income professionals, share similar risk tolerance and see real estate as a long-term investment oppor-tunity. Now, we have identified a 60-unit apartment building we are interested in pursuing. We have the standard list of due diligence items, but wonder if there are some “out-of-the-box” due diligence tactics to make certain we do not make a mistake as investors. Can you help?

Real estate apartment invest-ing is a series of calculated risks for investors

Answer: Buying, owning and selling investment real estate is always a series of calculated risks. “Make certain” are strong words. No matter your methods, you cannot know everything the seller knows. Over and above the standard due diligence list, buyers have ways to discov-er more about a property that either en-courages or discourages them. It is always difficult to understand the motivation of the seller because many sellers do not share their core beliefs, or some may even mislead or miscommunicate their ideas to

create an image of trust. As callous as this statement is, I believe it to be true in many cases. To balance that statement, self-in-terest is to be expected. Choose carefully which tactics to employ. Business ethics is a subject that is not black and white. It involves various shades of gray depending on the person with whom you are talking. Choose carefully which tactics to em-ploy with which transaction. Some sellers might not take kindly to a given tactic, while others may well have done some-thing similar, or further out-of-the-box, themselves. I have never witnessed any one buyer applying all of these tactics on a single property. This is a career compi-lation of tactics I have seen.

No. 1 – The rent roll is not enough:Where do the tenants work? Determine

where the tenants are employed. This data will be on the rental application, but not on the rent roll. If 25 of the tenants are with the same company, and a move to Mexico is announced 30 days after the sale closes, your vacancy rate could skyrocket.

No. 2 – Visit with former tenantsVisit with multiple tenants who have

moved out of the apartments. You can de-termine this by comparing year-to-year rent rolls. Look for patterns in the reason they moved out. Getting closer to work is one thing. But moving away from drug dealers is a different story.

No. 3 – Investors should look for pat-terns in the vacancy swing

Get the financials both annually and monthly. Look for patterns in vacancy swings. If you find one, learn what creates it every year. When you hear the answer, trust it – but verify.

No. 4 - Visit the apartments in the morning- and in case you don’t see them also “good day, good evening and good night”

The quote from the Truman show ap-plies when you want to find out what is re-ally going on with the apartment building. Visit the property unescorted on multiple occasions. Visit in early morning, mid-day, late afternoon and midnight. You will learn something about your potential tenants and how the building functions.

• Do tenants congregate in appropriate places?

• Are there vehicles with stale damage?• Is the parking lot well lit?• Do you feel safe?• It can be surprising what you

learn going unannounced.

No. 5 – Talk with the local police about the apartments

Check with the local police department. Tell them you are considering buying the

building and ask if you could do anything to help them in the neighborhood. You will learn if the building has a reputa-tion. The best thing that can happen on that visit is they will have trouble placing the property.

No. 6 – Research single-family homes near the apartments

Locate the single-family homes closest to the property and canvas them. Go to multiple homes, possibly a half–dozen. Some owners may be timid, while other will talk your ear off. The goal is to learn what the neighborhood thinks of the property and how the building operates.

No. 7 – What is the average occupan-cy per unit?

Determine the turnover rate by unit. Is the average occupancy per unit six months or six years? If it is six months and the building operates on a six-month lease, why are they not renewing? Serial leasing is expensive.

No. 8 – Talk to whoever is actual-ly doing the maintenance for the apartments

Identify the handyman or maintenance person. Take note of the vendors who per-form service for the building. Interview some of these folks. Ask them if there are any situations in the building they would change. It could take a number of calls be-fore you hit the jackpot.

No. 9 – Visit the neighborhood bar near the apartments and introduce yourself to the bartender

That’s right. That is really what I said. Find the closest neighborhood tavern or

9 Out-of-the-Box Questions ...continued from page 1


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continued on page 8

Crowdfunding and Peer2Peer Lending For Real Estate Investors

The Disruptors we want!

If real estate investors weren’t choosing crowdfunding and Peer-2-Peer lend-ing over the alternatives of Wall Street

and Big Banks this article would end right here. But it doesn’t. Crowdfunding and Peer2Peer lending are the future of the independent real estate industry for one very simple reason that Wall Street and Big Banks cannot fathom. It’s what people want.

Here’s a quaint idea that I believed as a freshly minted college graduate, and that some companies like Google or Uber de-liver on a massive scale. The customer is King. Another way of looking at it is if people are flocking to the competition, then that means they don’t like what you have to offer in comparison to your offer-ing. Beyond obvious, yes?

This then begs the question, “What do people want”? When it comes to invest-ing it’s been assumed for decades that people only want higher, safer returns and that’s it. For a while there, it was assumed to be irrelevant how these higher, safer re-turns are delivered, nor was anyone really asking “Is that really what we’re getting”? It’s when we begin to question this system that the bankers and Wall Street scratch their heads and stare at us as if we’re cra-

zy, laugh, and walk off; they cannot com-prehend why we’d be saying something like that.

This was brought home to me in an experience I had taking the ridesharing company, Lyft. I wanted to test it to see what all the ruckus was about and when I

did, it changed my life forever. I had nev-er had been offered, nor taken anything more than, a ride home in a taxi cab. I assume this was another taxi cab. It wasn’t. It was a ride home, at 1/3rd off in a clean, well-maintained minivan with a dental hygienist young mother of two

named Denise. We chatted. I learned about her and this new way of earning ex-tra money for raising her kids and taking care of the family a few hours at a time. In that one ride my satisfaction level with Yellow Cabs service dropped about 95%

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friends and help you stand out against the competition.

Outdoor KitchensGrills are often the gathering point for

many multifamily outdoor areas, so make them as functional and inviting as possi-ble. Explore different options like char-coal, gas and electric grills, or consider installing a combination to give residents a choice. Consider upgrading the grilling area by adding built-in counters to make prep, cooking and entertaining easier. Always ensure the grill is compliant with local regulations, especially regarding fuel type.

One of the newest trends for outdoor spaces is to move beyond simple grills and create full outdoor kitchens. If your community enjoys mingling over meals outside, consider upgrading your area to a kitchen by adding counters, cabinets,

sinks, faucets and maybe even alternative cooking methods like a pizza oven. One of the latest outdoor kitchen trends, piz-za ovens are a great alternative to grill-ing and come in different options such as built-in or cart-mounted, as well as gas- or wood-burning.

Residents will be able to prepare, cook and keep their company entertained all in one place without the hassle of traveling back and forth to their apartments.

Patio FurnitureOne of the keys to comfort outside is

to invest in durable, water-resistant patio furniture like couches, dining tables and chairs. Make your outdoor space full and functional by offering seating for both dining and relaxing. A dining set will al-low for communal seating and a space for residents to eat after making their meal in the kitchen. Add in a conversation

set with comfortable sofas, loveseats and lounge chairs, where entertaining can continue and tenants can relax and un-wind all in one place.

When deciding on furniture, con-sider the construction of the furniture. Wicker, plastic and aluminum are great, lightweight choices. Wood or wrought iron furniture are heavier options, sturdy enough to handle strong winds.

Exterior LightingBrighten up the outdoor space with

high quality exterior lighting. LED light-ing has made big advancements in recent years, giving you a lot of energy-efficient options. Safety is the most important con-sideration, and LED motion lights can cut down on utility costs while still protect-ing the space. Installing solar-powered lighting like post caps and pathway lights will also reduce energy costs, add to the

safety of the space and improve the eve-ning ambiance. Finish the area with dec-orative accents like string lighting, LED lanterns and candles, making the space functional and inviting.

Don’t Neglect MaintenanceIt’s important not to forget the impor-

tance of regular maintenance on the out-door space. Regular upkeep to the lawn and shrubbery is easy to overlook. Up-grade to a drip irrigation system, a water system that allows the right amount of water to plants and shrubbery without losing money in labor and overwatering.

For patios and decks, it’s important to maintain surfaces by regularly using seal-ants and resurfacing products to with-stand foot traffic and weather. Inspect walkways and surrounding pavements for any cracked or uneven surfaces. Repair and seal with concrete sealant and paint for more aesthetical appeal and eliminate any potential risks.

When deciding where to begin, con-sider the most effective updates for the property. Whether it is starting the out-door space by updating the furniture and lighting or upgrading to a full outdoor kitchen, these changes will make the space more inviting and communal for residents, while also setting your property aside from competitors.

By Scott Matthews, Director, Strategic Accounts, The Home DepotScott is responsible for managing national accounts and e-commerce while overseeing business-to-busi-ness relationships. During his 25 years at The Home Depot, he has served in a variety of roles and capacities, including Regional Pro Sales Manager, District Manager and Store Manager.

Charm Residents with Outdoor ...continued from page 1

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Text 51WAYS to 44222to receive our FREE e-book51 Ways to Increase Your

Rental Property Cash Flow8



Crowdfunding and Peer2Peer Lending ...continued from page 6 Average Rent Break $1,000 ...continued from page 1

Pierce: 4.14% The vacancy rate in Pierce County

dropped from 4.22% to 4.14% this quar-ter. It was 4.51% a year ago.

The lowest vacancy rate is 3.21% in Fife, which also showed the greatest im-provement among the seven submarkets. The weakest submarket is Tacoma South, where the vacancy rate increased slightly to 4.78%.

Kitsap: 4.22% Last quarter’s vacancy rate of 3.44% for

Kitsap rose to 4.22%. Up until this quar-ter Kitsap had the lowest vacancy rate for five straight quarters. The vacancy rate was 3.55% a year ago.

Bremerton went from having the low-est vacancy rate of 2.64%, to the highest at 4.53% among the four submarkets in Kitsap. The lowest rate of 2.91% is in the Poulsbo/Bainbridge Island submarket.

Thurston: 3.08% Thurston County improved again this

quarter. The vacancy rate dropped from 3.64% to 3.08%. A year ago it was 4.34%. Tumwater is the strongest submarket with a vacancy rate of 2.66%.

Rental IncentivesPierce $6 per Month (0.6%)Kitsap $0 per Month (0.00%)Thurston $1 per Month (0.10%)

The overall rate for rental incentives for the three-county area is 0.5% versus 0.4% last quarter. Remarkably, Kitsap has had zero percent for two straight quarters. Rental incentives are having a negligible impact in the three-county area.

Nine percent of the properties in the three-county area are offering rental in-centives, down from 12% last quarter.

Rents $1,014 per Unit $1.15 per Square Foot

Rents for the three-county area broke through the $1,000 barrier. Average rents climbed $19 to $1,014 per month and $1.18 per foot, an increase of 1.9%. They increased 10.6% over the past year.

Rents averaged 6.24% per year over the last 3 years.

Pierce $1,008 per Month $1.17 per Square Foot

Kitsap $1,077 per Month $1.26 per Square Foot

Thurston $971 per Month $1.13 per Square Foot

Rents increased $22 in Pierce, $6 in Kit-sap and $15 in Thurston. Submarkets top-ping the list for largest rent increases over the past quarter are Poulsbo/Bainbridge Island and Tacoma South.

New ConstructionThere are 1,456 units under construc-

tion, up about 200 units from the fourth quarter. The majority of these are in Thurston County. There are another 1,319 units that have successfully completed the design review and permitting process.

Featured in the photo the 151-unit Proctor Station opened in the first quar-ter. It is located in North Tacoma and is managed by Edison47.

Observations Last quarter we pointed out that 2015

was the best year for the rental market since the financial crisis in 2008. This quarter rents are up 1.9% with the vacan-cy rate shrinking a bit to 3.97%.

The three-county market has had a very good run over the past three years. As noted above rents increased an average of 6.24% from 2013 to 2015.

The barriers to entry into the home sales market have increased of late. There is a shortage of homes for sale which has helped spur price increases. As of March, annual median prices rose 16.3% in Kit-sap and 8.2% in Pierce.

The tight home sale market and mod-erate level of new apartment construction will help keep pressure on rentals. We expect the market to continue to flourish this year.

and I haven’t taken another cab ride since.The thing is, it was more than a cab

ride. It was not simply the one way deliv-ery of a service to a customer. It was two-way. It was an interaction that made me feel like something more than “fare”. It was a ride home with another human being, who was willing to treat me as if I were a friend; we were both there to help one another, not just give to take. On top of that, the differences like speed of deliv-ery and the personal knowledge I gained from her profile provided me with a con-nection that was unprecedented in the “cab ride” scenario. I knew more about her as a person than I will ever know about any of the previous cab drivers I never knew nor will remember.

When people became aware of Uber they compared that to Yel-low Cab. Yellow Cab declared bank-ruptcy in San Francisco two months ago. Why? Not because they are bad at what they do. They went bankrupt be-cause the new way of getting rides made the old way totally unacceptable, unpleas-ant and costly. I believe this is what we are experiencing in the real estate invest-ing and funding industry.

Crowdfunding and Peer-2-Peer lending give people more of what they want. They want to be treated with respect. They want to be connected. They want the freedom to choose. They want to be knowledge-able. Intelligent. In charge. For this rea-son, people are rejecting being treated as if: all they care about is money, that they are helpless creatures, that they are de-void of the capacity to learn and that they lack sound judgment. That’s what the cur-rent model is telling us.

Technology has opened up avenues of connection and options of communicat-ing never before dreamed of. It is mas-sively disruptive to established, common-ly accepted beliefs, systems and structures that never contemplated the possibility of the level and depth of interaction and communication available to each and ev-ery one of us at almost zero cost!

The technology revolution has already dictated that to stay competitive we must change. We must deliver more of what people want. Much like Lyft has done with the rideshare industry, real estate borrow-ers and lenders are turning to Crowd-funding and Peer-2-Peer lending to de-liver more of what people want. Does the current establishment understand and welcome it with open arms? Of course not. Wildly disruptive? Yes. A threat? Yes... to the old existing order and an exciting alternative for the end users. We, who can stand a little of the uncertainty that comes with the end of one age and the beginning of another are looking at an amazing opportunity.

By Scott Whaley, President REIFADiscover all of the new technologies, strate-gies and ways of investing and getting fund-ing with this new business model that has been sweeping through all industries. Now, it’s our turn. Check out REIFA and #REIFACON at www.reifacon.com or www.reifa.org.

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9Rental Housing Journal On-Site · May 2016

The Solution to Housing Policy Working Together

The apartment industry throughout the state and across the country has been in a sustained growth pe-

riod for several years. As exciting as it has been to recover from the Great Recession and begin to improve property bottom lines, there are certainly growing pains that have resulted from this uptick in the rental market.

Due to changing preferences, changing demographics, and economic conditions, more and more people prefer renting as a housing choice.

Good job growth and high in-migra-tion have resulted in a supply-demand imbalance, which has created an afford-ability challenge that can only be aided by new construction of both market rate and affordable housing units.

There has been a lot of discussion about how to create and preserve affordable housing and how to create smart growth policies. Local governments, however, are offering politically motivated piece-meal legislation which address only parts of the overall equation.

Affordable Housing Week was celebrat-ed during May 16th – 20th. Demand for housing has never been higher than it is now.

More than 38 million individuals live in a rental home across the country, and 42 percent of those that do rent call an apart-ment their home. Apartments provide housing, create jobs and build commu-nity. In all, apartments contribute more than $1.3 trillion to the U.S. economy.

But the demand for affordable hous-ing is even greater. The Washington Multi-Family Housing Association (WMFHA) is committed to creating and preserving affordable housing including low income housing units across the state.

WMFHA works closely with feder-al, state and local governments and in concert with its members to create and preserve affordable housing in large met-ropolitan areas and small communities across Washington State. Together, WM-FHA has:

• Participated in the National Apartment Association’s grassroots advocacy efforts to support reforms to the Section 8 program to further simplify the often burdensome federal program. Some of the reforms include: · Streamlining the inspection

process required at move-in; · Ensuring and continuing the

voluntary nature of the program; · Increasing predictable

funding from Congress and honoring existing contracts.

• Supported and encouraged its members to apply and invest in the Multi-Family Tax Exemption and voluntary incentive zoning programs in Seattle. Support for the MFTE program in Seattle has been resounding. Together with our members, we have created more than 5,700 affordable apartment homes ranging from efficiency studio units to family-size three bedroom homes.

• Supported the creation of a Housing Trust Account through the State Department of Commerce to encourage more landlords across the State to open their rental properties to Section 8 Housing Choice Voucher recipients. The $125,000 fund allows landlords to seek reimbursement for damage caused by a Section 8 tenant and for unpaid rent up to $5,000.

• Supported Senator Maria Cantwell’s push to create more affordable housing by expanding the Low Income Housing Tax Credit program. Nationwide, the program has paid for nearly three million rental homes since 1986, including more than 18,000 in Seattle alone. An expansion of the program by 50 percent would assist in building 4,200 units in Washington over 10 years.

• Created grassroots advocacy in Olympia through our annual Day on the Hill Lobby Day to support State

legislation creating a Preservation Tax Exemption opportunity for existing properties. This proposed legislation sought to create tax incentives to landlords and property owners to preserve affordable units

for up to 15 years and maintain them in a safe and healthy manner.

• Supported provisions of the Housing Affordability and Livability Agenda. WMFHA continues to support the creation of affordable housing in all parts of the City of Seattle while maintaining the open and free ability of our members to conduct business and make well-informed decisions about who is renting in their communities.

The federal government has also taken on the challenge of balancing business interests with public policy innovation. Without leadership and effective policy from lawmakers, the nation will continue to fall short of meeting the growing de-mand for affordable multifamily housing.

This was the key takeaway from re-cent congressional testimony by Clyde Holland, chairman and CEO of Holland Partner Group, on behalf of the National Apartment Association.

Speaking before the House Committee on Financial Services Housing and In-surance Subcommittee, Holland outlined the primary reasons why America faces a growing affordability problem – stagnant


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11



Dear Maintenance Men:I have a hundred gallon water-heat-

er serving seven units. The residents are complaining about a lack of hot water and sand coming out of the faucets and show-er heads. The heater seems to be working normally. What would cause sand to come out of the lines?

Johan

Dear Johan:Your water-heater probably needs the

calcium build-up removed from inside the tank. If your 100-gallon water heat-er is a commercial unit, you should find a clean out port at the bottom of the tank. Determine the tank manufacturer and purchase a new gasket for this port. Most plumbing supply outlets will have these in stock.

• Turn off the gas supply. • Turn off the water supply to the tank.• Drain the water heater completely.• Remove the clean out port. Some

have a series of bolts, others have only one big nut to remove.

Once you gain entry into the interior of the tank, you may see white or yellow sediment on the bottom of the tank. If the tank has not been cleaned out regu-

larly, the build-up may be significant. A hammer and chisel may be necessary to remove the more stubborn areas. This is also a good time to check the anode rod and dip tube (note: if your dip tube is damaged it can prevent the cold in-coming water from reaching the bottom of the tank and being heated.) If either is damaged or eroded, check with your plumbing supply outlet for a replacement. The anode rod can be replaced by un-screwing it from the top of the tank. Af-ter completing the tank clean out, be sure to check all the faucet spout screens and shower heads to remove any acuminated debris. After all the work is completed, reinstall the port opening and always use a new rubber gasket. Your tank should work much more efficiently & cost less money to run while supplying more hot water. This clean out procedure should be done at least once a year.

Dear Maintenance Men:During the recent rains, my building

started leaking. I was surprised, as the roof is less than a year old. The odd thing about the leak is that it is only affecting the downstairs units. What is going on and how do I solve this?

Michael

Dear Michael:Water is a funny thing and tracking

down leaks sometimes takes a bit of de-tective work. The first thing we would check is the roof. As you stated, the roof is new, but sometimes the odd flashing does not get caulked and the water finds its way down the side of a pipe, valley or junction area. Have your roofer, double check all the flashings. Another issue to look at, is water pooling around the foun-dation. If you have cracks in the foun-dation, water will find its way in. Be sure to clear any debris, dirt and leaves from around your building or anything that will cause a water dam effect. Overgrown or old landscaping can contribute to leaks by trapping water or redirecting water to the building instead of away from it. In-spect the building’s stucco for cracks. We have seen small cracks in the stucco suck in large amounts of water. Pay close at-tention to the stucco between floors or on the edge of balconies. Balconies shed a lot of water which may cascade over the edge and flow back into the stucco where a hid-den crack will allow the water to enter.

If you have aluminum windows, check the weep holes that allow water to drain out of the window tracks.

Dear Maintenance Men:Should I check smoke alarm batteries

in my units or is that the residents job? Also, how often should I clean out my water heaters, not to mention A/C filters and so on?

Linda

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SK THE SECRET SHOPPERAlive After Five

Every day at five o’clock, people pour out of the work place, get into their cars and head for home. However,

often times they have to run errands or make other stops after they have already put in a full day. Some people even have to schedule appointments to look at apart-ments when they get off work because their week-ends are packed and they can’t take a long lunch break. Most leas-ing consultants have put in a full day by five o’clock too, but many rental offices are open until 6:00 or later. Do the prospec-tive renters who come through your door after 5:00 get the same level of enthusiasm and quality of service as those who visit your community before noon? See what happens when the Secret Shopper “drops in” to look for a new home at the end of the day.

The bright flags and attractive land-scaping caught my eye so I stopped in. It was about 5:40 when I entered the leasing. I noticed the office hours sign stating, “Open until 6:00.” The leasing consul-tant was alone and I could see she was straightening up and had turned off the lights in the connecting clubhouse. I said I had just gotten off work, and wanted to take a look at an apartment. The employ-ee’s smile faded, as she sighed and practi-cally groaned, “I just locked up the model and show apartment . . .” I apologized for stopping by so late, but explained I was on

my way home from work and there really wasn’t any other time I could look for an apartment because of my schedule. She replied, “That’s okay. It’s not a problem,” but her body language communicated

something entirely different. She asked the size apartment I needed and for when, but did not inquire about my needs or ask for my name. We walked directly to the model, with little conversation. My

efforts at “small talk” were met mostly with silence. The consultant entered the apartment first and turned on the lights. She said, “Go ahead and look around,” and then stood to one side. I walked from room to room, but did not open anything as I felt rushed. I thanked her for show-ing me the apartment and she replied, “No problem.” When we reached the of-fice building, she did not invite me back inside. Instead, she gave me a business card and an application, and dismissed me with, “Let me know what you decide.”

The next evening I visited another com-munity. As I pulled into the parking space for future residents, I observed the leas-ing consultant locking up. When I got out of my car and approached the office, she tried to avoid making eye contact. It was 5:30 and the closing time was posted as 6:00 p.m. I asked if she works there, and if the office was still open, even though I could see everything was dark. The con-sultant unlocked the door and invited me inside. She apologized for closing early and said it had been slow so she decided to lock up a little bit early and go home. The consultant tried to stifle a yawn and said, “Slow days make me sleepy.” She asked what I needed, and then said she could show me a model. However, I felt like I would be “putting her out” and offered to come back the next day. She smiled and


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Most everyone I know has a sim-ilar story of how they got into a multifamily property manage-

ment career. Either they were recruited into a multifamily property management career after their primary job plans fell through, or they had a friend of a friend that already worked in the industry and they wanted to try it out. My question is, how do we turn this from a fallback op-tion to the option that people choose fresh from high school?

5 reasons to pursue a multifamily property management career

After having worked in staffing for multifamily and onsite for multiple years, I have begun to come up with a list of all the amazing things that you can expect

when working for the industry that I so strongly believe in.

Multifamily is a career where you can be successful without college

No college needed! Don’t get me wrong, college is always a great thing but it is not for everyone, and this is a career where you can be successful without it. There are amazing certification (CAM, CAMT, NALP, HVAC and CPO) that are very helpful and also extremely cost effective, no debt required!

Multifamily jobs are steady em-ployment

Job Stability. I worked outside of prop-erty management in the mortgage in-dustry during the collapse. It scared me

to think about going back to that. A lot of industries are a “feast or famine” type. You can make a LOT when the market is strong (or in the case of a lot of mainte-nance jobs during the peak season). But when the season ends or the market col-lapses you are left jobless and scrambling to feed your family. I personally prefer a steady, regular amount of hours with an industry that succeeds even during lean markets.

Steady work and life balance in mul-tifamily jobs

Work/Life Balance. This is in a similar vein to the item above. I know so many maintenance professionals, ESPECIALLY in the HVAC / Construction world, that kill themselves during the busy season

both physically and mentally. There is very little time with family and friends, backbreaking work, and no guarantee what the next week will hold. Wouldn’t you prefer a stable amount of hours with a paycheck you can budget with? This also goes for those in restaurant and retail. Crazy hours, rude people, and I person-ally never felt like the money matched up to the time and hassle. In multifamily you will likely never bring home the pay-check that a 90-100 hour week with time and half will give you, but you will have steady work AND get to see your friends and family. That is what I call a win/win!

5 Reasons Why A Multifamily Property Management Career is Awesome!


14



2016, it will rise steadily each year for the next seven years through at least June of 2023. How much the rate will increase will depend on where an employer is located within the state.

Here is the actual implementation table, with some explanation and footnotes show-ing the rundown of the plan:

Effective Date of Rate Increase

Base State Rate

Exception: Rate within Portland’s Urban

Growth Boundary2

Exception: Rate within Nonurban

Counties3July 1, 2016 $9.75 $9.75 $9.50July 1, 2017 $10.25 $11.25 $10.00July 1, 2018 $10.75 $12.00 $10.50July 1, 2019 $11.25 $12.50 $11.00July 1, 2020 $12.00 $13.25 $11.50July 1, 2021 $12.75 $14.00 $12.00July 1, 2022 $13.50 $14.75 $12.50

After June 30, 2023, the base rate will be adjusted for inflation, with the Portland rate set $1.25 above the base and the nonurban county rate set $1.00 below the base.

The impact of the increase in minimum wage is probably not a problem for apart-ment properties with high rent. The challenge falls to market rate and low income properties, especially if the rents are computed at a market driven 4 – 5% of rental income. Other onsite staff, leasing agents, painters, cleaners, landscapers and main-tenance employees will see their pay increased which may increase the overall cost of operating apartment properties.

Health insurance required for all employees working over 30 hours a weekThe Affordable Care Act was signed into law by President Barack Obama on March

23, 2010 and upheld by the Supreme Court on June 28, 2012. As part of the ACA, also known as Obamacare, large employers are required to offer health insurance to all full-time employees and their dependents. The term ‘full-time employee’ means, with re-spect to any month, an employee who is employed on average at least 30 hours per week, section 1513 of the law reads. (Scroll down to section 4, paragraph A.)

That section, known as the employer mandate, requires any business with 50 or more full-time employees to provide at least the minimum level of government-defined health coverage to those employees.

Businesses must provide insurance for employees working an average of just 30 hours per week, which is 10 hours per week fewer than the traditional 40-hour work week.

If an employer has 50 or more ‘full-time employees’ and does not offer health in-surance, it must pay a penalty per employee for each month it does not offer coverage.

Employees who work at least 30 hours per week or whose service hours equal at least 130 hours a month for more than 120 days in a year, are considered full-time. This added requirements for properties with onsite employees that work more than 30 hours a week, and had a major impact on larger apartment properties that may not already have offered health benefits to onsite employees.

Potential increase in supervisor costs on the horizon for 2016 The Federal Department of Labor (DOL), through the Presidential Memorandum

on Updating and Modernizing Overtime Regulations, is proposing changes to “mod-ernize and streamline” the Fair Labor Standards Act (FLSA) overtime regulations. The following outlines the key impacts of the pending regulations changes.

Significant impact. Most employers covered by the FLSA will need to analyze em-ployee classifications and make other changes by an effective date in late 2016, which will be established in the final rule.

Exemption increase. To be exempt currently, workers must make more than $455/week ($23,660 annually). The proposed rule sets the standard salary level at the 40th

Increasing Cost of Owning Properties with ...continued from page 4


15




Add Value With Quick and Easy Deck Upgrades

By Geoff Case, The Home Depot

There are many renovations or ad-ditions you can make to a home to increase its value. There is a grow-

ing love for outdoor spaces like decks and patios, according to the American In-stitute of Architects. These spaces are an excellent investment, as they establish or increase outdoor living area at a minimal cost per square foot.

The national average for construction costs of a wood deck is less than $35 per square foot, according to the National As-sociation of Home Builders. On average, adding a wooden deck equals an 81 per-cent return on investment when selling a home, according to USNews.com.

If and when a home or property already has deck, look for smart and efficient ways to enhance or upgrade. Decking projects range from simple upgrades like lighting or resurfacing to more advanced jobs like installing new railing systems or swap-ping out deck boards.

Decking materialsWhether you are looking to install a

deck from scratch, repair an old deck or update for a change in appearance, deck-

ing material options are the most import-ant decision to make.

CompositeThis material is becoming more popular

in the decking arena because it requires little maintenance and looks like real wood. Composite decking is made from a mixture of wood and plastic, which makes it both durable easy to maintain. The ma-terial doesn’t splinter or rot, and it doesn’t need to sealed or stained. One example is Veranda’s ArmorGuard decking, which is backed by a 20-year warranty including protection against color fade and stain.

Natural WoodThe beautiful appearance on this

wood makes it a top choice for decks, although natural woods can cost the same as composite and come with more work. Natural wood needs to be regular-ly weatherproofed and stained to keep their appearance. Types of popular natu-ral wood include redwood, ipe, which is a Brazilian hardwood, tigerwood, which

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A chance to move up in your jobThere are NO limits. Sure you might

start out as a groundskeeper or leasing (which are still amazing jobs) but where do you want to go? Property manager, re-gional manager, Maintenance Supervisor, Regional Maintenance Director, VP, As-set manager, Rehab Manager are all with-in your reach if you work hard, get the needed certifications and have a great at-titude. Maybe you don’t want to work on-site anymore or at a corporate office, there is always the vendor side of the industry with tons of sales and management roles. You get to decide where you want to go in this industry, and there is no glass ceiling.

A sense of comradery working in multifamily housing jobs

FUN. Don’t get me wrong, this job is not easy. Some days you might want to leave and never come back! BUT, you always will. Once Multifamily gets in your blood, nothing else can match it! The people you work with become an extended fami-ly, the company you work for becomes a source of pride and bragging rights, and

you realize that regardless of what com-munity you work for or company, that we are all in this crazy industry together. The sense of comradery is unmatched to any place I have ever worked and I bet you ask anyone and they will agree.

These are just my top 5 reasons why a multifamily property management career should be your first choice and not a last resort. What are yours?

Betsy Kirkpatrick has been working in the multi-family industry for many years as a property manager and regional trainer with multiple companies prior to be-coming the Regional Sales Manager for BG Staffing. She is passionate about the industry and the careers available within, and loves serving the industry in any way possible.

Contact her at [email protected] with any thoughts/ questions!

has a rich color with stripes, and cedar, which is rot resistant.

Pressure-Treated WoodIf wanting to stick to a tighter budget,

pressure-treated lumber is a great prod-uct to consider. This wood is affordable and durable. Another option growing in popularity is color-infused wood, which comes in a variety of different color op-tions that don’t fade like or stains or fin-ishes.

Decking enhancements If a deck or patio doesn’t need to be

completely renovated, small changes in appearance or creative add-ons can cre-ate an outdoor space worth spending time and entertaining in.

Resurfacing Revive the deck by first giving it a good

cleaning, then apply BEHR DeckOver. This resurfacing product is durable, mil-dew-resistant finish that is made to last without cracking or pealing.

LightingAdd to the ambiance of the outdoors

by incorporating lighting in the patio or deck. Low-voltage LED lights continue to grow in popularity, especially since they use 80 percent less energy. These are a great option for decks as they can light a path from a patio to the home when in-stalled in walkways, steps and post caps, adding to the atmosphere and safety of the outdoor area. Solar-powered land-scape lights are also a nice option to add energy efficiency to the home’s deck while avoiding the hassle of wires.

Railing systemsCreate an open feel to the deck by in-

stalling cable-railing systems. The bene-fits of this new trend include better sight lines with thin cables, durability that can withstand most weather conditions and minimal maintenance. For a more tradi-tional deck-railing look, consider install-ing pre-built railing systems or sections. This will save you both time and money.

Making major or minor updates to a property’s deck is a great way to make the property more desirable to potential buy-ers or renters. Although prices of renovat-ing a deck vary on factors like locations, size and materials, what you add it is still a cost effective alternative to adding on a room in terms of return on investment.

Property Management Career ...continued from page 13 Quick and Easy Deck Upgrades ...continued from page 15

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HomeUnion, an online real estate investment management firm and data provid-er enabling value investing in residential properties, has released March 2016 data on the flattening U.S. housing market. According to HomeUnion’s re-

search, the median price for owner-occupied homes declined 1.1% to $234,300. Mean-while, the median price for non-owner-occupied homes, or investment homes, rose 8.5% to $192,600.

“We are seeing a degree of volatility in the traditional housing market, especially on a regional level,” says Steve Hovland, director of research for HomeUnion. “We expect price growth for owner-occupied homes to be tempered, even as we enter the typi-cally frenzied spring home-buying season. Housing affordability has pushed beyond incomes in many areas of the country, limiting demand at today’s prices despite low interest rates.

“March home price figures highlight the attractiveness of single-family rental (SFR) investment homes in an uncertain environment,” Hovland notes. “Since last August

when volatility set into the global stock markets, investors have been repositioning their portfolios to hedge against uncertainty and find stable yields. We’re seeing that demand translate into higher investment home prices.

“At this stage in the cycle, purchasing a fully managed investment home or portfolio of homes remotely could prove to be a better long-term investment than purchasing a home to occupy, depending on where that investment home is located,” he adds.

Here are more details on how investment home prices compare to traditional home prices:

Data Year-Over-YearMedian Sales for Price for all housing $223,400 4.3%Owner-Occupied Sales Price $234,300 -1.1%Investment Median Sales Price $192,600 8.5%Investment Home Cap Rate 5.8% -80 basis pointsInvestment Home Cash Price $156,500 5.5%Home Cash Cap Rate 6.4% -120 basis pointsInvestment Home Leveraged Price $224,900 0.2%Leveraged Home Cap Rate 4.8% -50 basis points

Disclaimer: Median sales price is based on transactions of single-family homes available through FHA financing (up to four units). Transactions above $30,000 were considered in the analysis.

About HomeUnion

HomeUnion is an online real estate investment management firm, bringing value investing to the indi-vidual investor in residential properties. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in SFR properties. The company uses a combination of data-driven propri-etary analytics to incorporate over 120M homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 21 locations. HomeUnion’s role spans the lifecycle of the investment transaction: from identifying sound investments; handling all aspects of acquisition; maximizing income; protecting asset value; and selling it when the time comes.

SOURCE HomeUnion

Related Links – http://www.homeunion.com

U.S. Housing Market Shows Signs of

Meanwhile, investment home prices rose 8.5% in March

Flattening, According to HomeUnion

B&W

18



Dear Maintenance Men:I am the property supervisor of a large

apartment community. We have had a very busy few months and want to reward the maintenance department for being real troopers and for making the leasing staff look good to existing and prospec-tive residents. We want to get them a maintenance related gift or tool as a thank you for their hard work. What would you suggest?

Priscilla

Dear Priscilla:That is very thought full of you and

your leasing staff! However, we would steer away from tools or anything mainte-nance related as a thank you gift. Chances are there is nothing you can buy that they might not already have. Maintenance Mechanics collect tools like a sommelier collects wine. The best gift is through the Maintenance Mechanics stomach! And we have just the thing for you. We here at Dear Maintenance Men headquarters like to call it “Lemon Maintenance Cake”. This will be the perfect thank you gift, easy to create by even an inexperienced Kitchen Mechanic, and you and your staff will become the Maintenance De-partment’s favorite people! Here is what you need:

The toolsOne glass baking pan 9” x 14”, juicer,

grate, mixing bowl, spoon, fork and oven.

Material• 16oz box of Betty Crocker White

Super Moist Cake Mix,• 2 lemons,• 4 eggs,• ¾ cup cooking oil, • ¾ cup of water, • 3oz package of lemon flavored Jell-O

Procedure:• Preheat oven to 350 degrees F. • Combine all ingredients and

mix for four minutes.• Pour into a 9” x 14” pan that has

been greased and floured.• Bake for 35 to 40 minutes

in a 350 degree oven.• Remove cake from the oven and

with a fork, punch holes across the surface of the cake. (Poke holes with the fork about half an inch apart.)

• Pour lemon icing over the top of the cake while it is still hot from the oven. Let the icing soak in.

Icing• 2 cups sifted powdered sugar,

• Lemon juice and grated rind of 2 lemons

• 1 table spoon of water.• Combine and stir until well mixed.• Use as directed above.

ServesCut cake into two inch squares and

serve warm or room temperature. Stack on a plate for presentation.

DEAR MAINTENANCE MENBonus Article!

By Jerry L’Ecuyer & Frank Alvarez


B&W

19



Nightly Rentals ...continued from page 3 9 Out-of-the-Box Questions ...continued from page 5

turn over services you require. With the dramatic increase in income you are still much more profitable compared to a long term rental.

When it comes to maximizing your profits though, nothing matters more than location, location, location. With nightly rentals this isn’t just a business cliché, it truly matters. When choosing a property to use as a nightly rental you should always start by searching with-in close proximity to areas that travelers might go. The obvious locations are at-tractions like ski resorts, downtown Port-land, near airports or children’s hospitals, wine country, coastal towns, and city downtowns like Bend & Salem for events and legislative sessions, to name a few. If you have a property in a good location with a good interior design, you can end up with a fully booked home almost year round. Depending on the location, de-sign quality, vacancies, and size you can expect $100-$1000+ per night in revenue.

Keep in mind that this type of invest-ment property is truly a full time job. For a popular property you will have a check in, check out, and turn over to coordinate nearly every week. In addition to this most of these sites are heavily reliant on reviews by your guests and your rating on things like response time to inquiries. So you have to always have your smart phone on you 7 days a week to make sure that you are able to respond within hours.

As you can tell this kind of investment isn’t for everybody given the work it re-quires. This is why the investors that truly view being an investor as their profession hire property management firms like IRC Real Estate. This allows you to focus on finding and buying the properties in the

right locations and possibly handling the remodel and interior design, but then turn it over to the management compa-ny. Some companies like IRC Real Estate even offer in house interior design ser-vices that take care of that work for you.

If you are seriously considering get-ting into the nightly rental industry I am happy to answer any questions you may have and offer some free advice. With my involvement at the board level with orga-nizations like the Portland Area Rental Owners Association, NW Real Estate In-vestors Association, and the Salem Rental Housing Association I am happy to help educate or guide property investors when they run into problems or are simply new to the industry.

Christian Bryant, President of IRC Enterprise / Real [email protected] • www.IRCEnter-prises.com • View all credentials at LinkedIn

bar. Stop in for a drink and introduce yourself to the bartender. You want to talk with a bartender who has been there for years and knows the neighborhood. He or she may have something to say that is beneficial to you.

Investors remember these due dili-gence tips

• Make these visits or calls yourself.• Split them up between the

four investors or partners.• If you do not have the time or

inclination, hire someone who understands the apartment business.

• These tips will undoubtedly add value to your ability to make a good decision.

• Monty’s special tip for investors - Ask the landlord owner why he is selling? Any response should tell you tons.

ConclusionRemember these are the special out-

of-the-box investigation or due diligence questions you want to ask. There are many other standard ones recommended that you should also consider, but these are my special ones from my years and experience in the business. So remember:

• Where do the tenants work?• Talk to former tenants• Review the vacancy swings• Visit morning, evening and night• Talk to the police• Check single-family homes nearby• Study the turnover rate• Talk to the maintenance folks• Visit the local bartender

ResourcesBuying an apartment complex is easier

than you think (http://www.fool.com/investing/general/2014/08/17/buying-an-apartment-complex-is-easier-than-you-thi.aspx)

Keys to getting started in multi-fam-ily apartment investing (www.bigger-pockets.com/renewsblog/2012/01/12/keys-to-getting-started-in-multifami-ly-apartment-investing/)

Investing returns on apartments (nmhc.org/Content.aspx?id=4707)

Dear Monty: No-nonsense real estate advice (dearmonty.com/)

Forget buying a single-family home purchase an apartment complex (finance.yahoo.com/news/forget-buying-sin-gle-family-home-162100725.html)

Are buyers paying too much for apart-ments? (www.forbes.com)

How to buy an apartment building (www.wikihow.com/Buy-an-Apartment-Building)

National Apartment Association (www.naahq.org/about)

About The Author

Richard Montgomery gives no-nonsense real estate advice to readers’ most pressing ques-tions. He is a real estate industry veteran who has championed industry reform for over a quarter century. You can ask him questions at www.DearMonty.com.

B&W

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wages, a supply-demand imbalance and numerous hurdles and regulations in de-veloping new apartments.

At the federal level, Holland noted that Congress must enable new development, preserve subsidy programs that make units available at below-market rates, and rehabilitate existing stock at-risk of loss due to obsolescence and other factors.

The biggest news in the housing indus-try nationally was the recently released HUD ‘Guidance’ on the application of Fair Housing Standards in a prospective tenant’s criminal background screening.

The guidance eliminates blanket ex-clusions on individuals with a criminal record and limits the use of arrest re-cords in making leasing determinations for prospective tenants. This means that any policy which denies tenancy based on any prior conviction, will likely result in a finding of discrimination.

When an allegation of a discriminato-ry policy is made, the investigative agen-cy will look to the landlord to show by specific facts that the policy is in place to achieve a substantial, legitimate and non-discriminatory interest. Once the landlord has shown this, the tenant must show that there are less restrictive means available to achieve the same goal.

General statements will not suffice and a landlord must show facts spe-cific to the prospective tenant and the crime(s) committed by that person as the basis for denial.

One hypothetical example of a situa-tion where denial may be appropriate is a prospective tenant’s prior criminal re-

cord which includes more than one felony conviction (not misdemeanor) for assault or property damage. Unfortunately, the HUD Guidance does not mention sex of-fenders or persons with convictions for terrorism. We can only assume that this was an oversight and that landlords can still reject persons with sex offenses who are required to register as sex offenders under state law.

Arrest History: In addition, HUD pro-vides that any policy based only on an ar-rest and not a conviction is likely to fail and will likely result in a finding of dis-crimination. It can certainly be argued that a landlord can and should properly consider a recent arrest for a serious crime that has a pending trial. An arrest that is several years old and did not result in any still pending charges should not result in a denial.

Prior Drug Convictions. In terms of drug crimes, HUD makes clear that there is a statutory exemption in disparate im-pact allegations from convictions for manufacture and distribution of drugs, as defined in the Federal Controlled Sub-stances Act (which does include marijua-na). This does not automatically extend to convictions for drug possession alone, which are much more closely examined for disparate impact. We recommend caution when considering denial on the basis of prior convictions for drug posses-sion only, especially marijuana.

Recommendations: HUD’s guidance provides recommendations for land-lords when a prospective tenant applies with a criminal record where a land-lord’s screening criteria would other-wise require denial on this basis. HUD strongly encourages you to take a close

look at the circumstances and facts of the conviction including:

1. The nature and severity of the con-viction;

2. The amount of time since the convic-tion; and

3. The age of the person at the time of the conviction.

WMFHA very strongly recommends that you carefully review your screening policies, as they pertain to criminal back-ground checks, and make sure that all blanket exclusion policies are reviewed and updated.

Any policy to deny a person based upon their prior criminal record must be “nec-essary to achieve a substantial, legitimate, nondiscriminatory interest”. This is the legal defense standard applied to a dispa-rate impact claim.

The policy must “accurately distinguish between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not”.

Working together with housing indus-try representatives, state and local juris-dictions can better develop public policy which will create balanced solutions that can work for all.

For more information about the Washington Multi-Fam-ily Housing Association, our educational opportunities, networking events or legislative efforts, or to sign up for membership, go to www.wmfha.org or call us at 425-656-9077.

The Solution to Housing Policy ...continued from page 9

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Ask the Secret Shopper ...continued from page 12 Dear Maintenance Men Bonus Article ...continued from page 18

looked relieved. The consultant handed me a brochure and a business card and said, “Give me a call in the morning. I’ll be here at nine with bells on.” (I won-dered what time she took her “bells” off!)

On my third evening out, I stopped by another community that caught my eye. It was just past 5:30 when I entered the rental office. The leasing consultant greeted me with so much enthusiasm, I was caught off guard. She apologized and said, “I’m sorry. Did I startle you?” She extended her hand and introduced her-self and asked for my name. She offered me a seat and asked how she could help me. I asked if she has that much energy at the end of every day. She replied, “Not always, but I work at it.” She explained how the leasing consultants stagger their start times so the person who opens early, leaves earlier, and the person who comes on shift later locks up.

The consultant said, “On the days I work alone, I take a couple laps around the property around 4:30 for a ‘pick me up’ and that seems to give me the extra energy I need to finish my day.” She was animated and enthusiastic as she spoke and seemed eager to serve. The consultant filled out a guest card for me, determined my needs and then gave me a thorough tour of the community amenities and a vacant apartment. At the end of the tour, we returned to the leasing office where she made several attempts to close the sale. She presented me with a brochure, community newsletter and an applica-tion. She then asked if she could follow up in a couple of days to see if I had reached a decision. When I left, it was 6:15 p.m.

Are you still “alive after five,” with en-thusiasm to burn? If not, what can you do

about it? Can you adjust your lunch hour or your work schedule so you have more energy at the end of the day? What about your attitude? Can you adjust that? If your office is open for business after five, shouldn’t YOU be open for business too? If you cut corners after five and don’t give EVERY prospective renter a “full meal deal,” they are going to go away “hungry” and end up renting somewhere else!

If you are interested in leasing training or have a question or concern you would like to see addressed, please reach out to me via e-mail. Otherwise, please con-tact Jancyn for your employee evaluation needs: www.jancyn.com

ASK THE SECRET SHOPPER Provided by: Joyce (Kirby) Bica Former owner of Shoptalk Service Evalu-ations Consultant to Jancyn Evaluation ShopsE-mail: [email protected] © Joyce (Kirby) Bica

Now your maintenance mechanics will fall in love at first bite and the Lem-on Maintenance Cake will be more than enough of a thank you for a job well done! A word of caution however, should said lemon cake need to go through the man-agement/leasing office before finding its way to the maintenance department, we suggest you make a decoy “Lemon Leas-ing Cake” with the above recipe to ap-pease your hard working leasing staff or the maintenance department may never see the cake! Good luck!

Bio:Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultationFrankie Alvarez at 714 956-8371

Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075Certified Renovation Company www.BuffaloMaintenance.comwww.ContactJLE.comwww.Facebook.com/BuffaloMaintenance

48-HOUR NOTICE OF ENTRYTENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ STATE: __________ ZIP: _________48-HOUR NOTICE OF ENTRYPursuant to RCW 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)______________________________________________________________________________on between the hours of and . (Date) (Time) (Time)The entry will occur for the following purpose:______________________________________________________________________________

______________________________________________________________________________ Landlord Phone

Method of Service: Personal Service: Post and Mail: ** Add one additional day for compliance if served by post and mail.

WA-RTG-40 Washington

©2009 NO PORTION of this form may be reproduced without written permission.

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor IN Out In Out In OutLIVING AREAS KITCHEN BEDROOM 3Walls Walls Walls

Windows Stove/Racks WindowsBlinds/Drapes Refrigerator Blinds/DrapesRods Ice Trays RodsFloor Shelves/Drawer FloorCarpet/Vinyl/Wood Disposal Light FixturesLight Fixtures Dishwasher Doors/WoodworkDoors/Woodwork Counter Tops LocksLocks Cabinets CeilingsCeilings Sink Electric OutletsElectrical Outlets FloorGarbage Cans WindowsTV Antenna/Cable Blinds/Drapes BATH ROOMFireplace

Towel BarsCleanlinessSink & Vanity

ToiletBEDROOM 1 BEDROOM 2 Tub/ShowerWalls Walls Fan (Exhaust)Windows Windows FloorBlinds/Drapes Blinds/Drapes Electric OutletsRods Rods Light FixturesFloor FloorLight Fixtures Light Fixtures Essential ServicesEssential ServicesDoors/Woodwork Doors/Woodwork PlumbingLocks Locks HeatingCeilings Ceilings ElectricityElectrical Outlets Electric Outlets Hot Water

Smoke Detectors

OR-RTG-20 Oregon

PET AGREEMENTTENANT INFORMATION

TENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ STATE: __________ ZIP: _________

DESCRIPTION OF PET(S)

1) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________



Additional Security Deposit Required:$

AGREEMENTTenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives tenant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions:

1) The pet(s) shall be on a leash or otherwise under tenant’s control when it is outside the tenant’s dwelling unit. 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly. 3) Tenant(s) are responsible for the conduct of their pet(s) at all times. 4) Tenant(s) are liable for all damages caused by their pet(s). 5) Tenant(s) shall pay the additional security deposit listed above and/or their rental agreement as a condition to keeping the pet(s) listed above. 6) Tenant(s) shall not allow their pets to cause any sort of disturbance or injury to the other tenants, guests, landlord or any other persons lawfully on the premises. 7) Tenant(s) shall immediately report to landlord any type of damage or injury caused by their pet. 8) This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement shall constitute a material breach of the rental agreement.

_____________________________ ______________________________Landlord Tenant ______________________________ Tenant

nogerO 42-GTR-RO

©2011 NO PORTION of this form may be reproduced without written permission.

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor

Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor







Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor IN Out In Out In OutLIVING AREAS

KITCHENBEDROOM 3

WallsWalls

WallsWindowsStove/Racks

WindowsBlinds/Drapes

RefrigeratorBlinds/Drapes

RodsIce Trays

RodsFloorShelves/Drawer

FloorCarpet/Vinyl/WoodDisposal

Light FixturesLight Fixtures

DishwasherDoors/Woodwork

Doors/WoodworkCounter Tops

LocksLocksCabinets

CeilingsCeilings

SinkElectric Outlets

Electrical OutletsFloor

Smoke DetectorsGarbage Cans

WindowsTV Antenna/CableBlinds/Drapes

BATH ROOMFireplace

Towel BarsCleanliness

Sink & Vanity

ToiletBEDROOM 1BEDROOM 2

Tub/ShowerWalls

WallsWindows

WA-RTG-20 Washington

5 REASONS TO USE RENTEGRATIONColor Standards for National Tenant Network Logo

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Increasing Cost of Owning Properties ...continued from page 14 Dear Maintenance Men ...continued from page 11

percentile of weekly earnings for full-time salaried workers, which for 2013 was $921 per week, or $47,892 annually. If the 40th percentile approach is adopted, the 2016 level is projected to be $970 a week, or $50,440 annually.

DOL Proposal. The Department is pro-posing to automatically update the salary level to be considered exempt (including for highly compensated employees) on an annual basis, either based on percentiles of earnings for full-time salaried workers or based on changes in inflation.

This will have the most impact for on-site managers that supervise staff as well as on onsite maintenance managers who supervise staff. If onsite managers su-pervise more than two employees that can qualify as exempt employees and if they are paid enough, you don’t have to pay overtime. In other words, a non-ex-empt employee would be paid over time for work over 40 hours a week , an ex-empt employee is not paid overtime for work over 40 hours a week, though this topic continues to be debated at the De-partment of Labor. A final rule on this position is expected to be published this spring.

Exempt supervisors must satisfy the following duties tests:

• Primarily manage a distinct unit or subdivision within the organization.

• Spends most of the workweek performing management duties. This generally means more that 50 percent of the worktime, however, other factors might support exempt status if less than 50 percent of worktime is spent in management. Other

factors could include: the employee is paid a significantly higher salary than is paid to nonexempt staff; the employee makes frequent management decisions; the employee is free from direct supervision.

• Supervise two or more full-time employees (or the equivalent of two or more).

• Have hiring or firing authority or, if not full authority, their recommendations are given particular weight.

• Customarily and regularly exercise authority to make decisions of significance.

SummaryIn summary, state mandated increas-

es of sick leave and minimum wage in-creases coupled with federally mandated health insurance for full time employees (30+ hours a week) and potential chang-es in federal overtime rules keep increas-ing the costs of staff involved with onsite management, maintenance and opera-tions of apartment properties. Owners will need to calculate these costs as they think through the due diligence of the properties they are about to purchase.

Resourceshttp://www.multifamilyinsiders.com/

multifamily-blogs/how-to-pay-your-on-site-manager

http://www.wagehourinsights.com/cat-egory/new-exemption-rules/

Dear Linda:1. Most rental agreements have a check

box that says the resident is respon-sible for the operation of the smoke alarm. The newest rental agreements now have a check box for Carbon Monoxide alarms. We lay awake at night thinking about that little check box. In order to sleep, we check the residents smoke and CO alarms ev-ery time we do maintenance on the unit. We keep a log of each time we check and what action was taken. The smoke and Carbon Monoxide alarms should be “Officially” checked and logged, at least once a year. Typical-ly, January is a good month for the annual check.

2. A typical 100-gallon water heater depending on the BTU rating will costs anywhere from $1,800 to over $3000.00 installed. That cost alone should be incentive to clean out your heater regularly. Normally, the clean out should be done at least once a year. If the water at your building has a high mineral content, then it should be cleaned out every nine months. Again keep a log of each clean out; it will help in remembering when to do the next cleaning.

3. If your building has forced air & heating, the filter should be checked, cleaned or replaced each October or November and each May or June. This will help keep your systems working properly and reduce strain on the components. It will also en-sure proper filtration before the win-ter and summer workloads.

4. Cleaning out the exhaust vent tubes of the laundry room dryer. Everyone knows about cleaning out the dry-er lint basket and throwing it on the laundry room floor. We’re talking about cleaning out the lines leading out the back of the dryer. Keeping the exhaust vent tubes clean will help cut down on gas and electric usage, longer machine life and shorter dry-ing time and lint in these tubes have been known to be a fire hazard. It should be done at least once a year and again, keep a log of each cleaning for reference.

Bio:Please call: Buffalo Maintenance, Inc for mainte-nance work or consultation. JLE Property Management, Inc for management service or consultationFrankie Alvarez at 714 956-8371Jerry L’Ecuyer at 714 778-0480CA contractor lic: #797645, EPAReal Estate lic. #: 01460075Certified Renovation Companywww.BuffaloMaintenance.comwww.ContactJLE.comwww.Facebook.com/BuffaloMaintenance

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