Multifamily Property Management – Customer Service – It’s not just important, It’s the difference.

Is your customer service program up to snuff?  In today’s fast paced, high tech world you have to make sure your apartments can compete, and not just with the guy down the road.

Take a typical tenant, let’s call him Joe.  Joe has a good job, makes plenty of money, has good credit and good references and has no problem paying the first month and security before he moves in.  Joe is busy trying to find a new apartment.

First however he is going to send out an overnight package by FEDEX.  He calls FEDEX and the phone is answered within two rings.  The account executive is pleasant and is quickly able to find Joe’s company’s account information.  She gives him a couple of alternatives with different prices.  Schedules the pickup, (which later in the evening comes on time – in a clean uniform), and he can track his package over the internet, and see that it is delivered on time and who signed for it.

Next he starts calling advertisements for an apartment.  He likes your ad so he calls you.  Your not available so he has to leave a message.  You get around to calling him back two days later, but low and behold he is still looking for an apartment.  You give him the basics – 2 bedrooms, 1 bathroom, $650.00 plus utilities.   You don’t know the square footage, what restaurants or other important community things are nearby, or even an approximately  what the utilities would run.  He sets an appointment to take a look ( he must be pretty desperate because you didn’t give him a whole lot of info).

You show up ten minutes late.  The keys don’t work, so you go in through a back window.  The lawn is not mowed and there is garbage blowing around.  You never cleaned out the refrigerator from the last tenant, so there is a bit of an odor.  The walls need painting and the carpet is stained.  And you wonder why he says “no thank you”, and why the market is so “depressed ” in your area.

Our tenants not only compare us to each other, but also to every other experience they have in there economic life.  WE are absolutely in competition with companies like FEDEX, because they have established the standard of how our customer wants to be treated.

So lets look how we might compete with a giant like FEDEX.

Joe calls the phone number in your ad.  Maybe you have it answered by an answering service that is available 24hrs a day and can provide him with some basic information.  Then find out when the best time to call him back would be.  Or you put your cell phone number in the ad (you carry it with you anyway) and are able to answer his call yourself.  You give him detailed information about the neighborhood, amenities and square footage of your apartment.  Then set the appointment.  Your lawn is always mowed because you have hired a reliable contractor, and you check it at least once a week anyway.  You arrive 15 minutes early to pickup any garbage that might be blowing around.  You use your well marked keys to gain entry to the freshly painted apartment, where the carpets were cleaned prior to your showing it to anybody.  You turn on some lights and open a couple of windows so the apartment doesn’t smell dank or musty.  You have an application and pen with you, and it clearly explains your procedure for renting.  It is a fresh copy that is easy to read.  Joe sees that you take good care  of your building and your apartment.  You value his time by showing up early, and have efficiently handled the tasks that need to be done.  Joe happily rents your apartment because you have given him an experience that rivals any top quality company.  You have showed him that you care about him and your property, and that you are a professional.

While none of these things is hard, it does take some practice and training to really implement a true customer service program.

The Power of Questions:
Things that create and/or influence your mental and emotional state fall into two categories. The first category is made up of forces created by your physiology (the way you move, what you eat, how healthy you are, etc.). The second category is made up of things that affect what you focus on. We all know you can change how you feel by changing what you focus on. In other words, if you think positive thoughts, you’ll be in a better state and you’ll get better results.
One of the easiest ways to change your thought process (what you focus on) is to change the habitual questions you ask yourself. Your thought process is a series of questions & answers. Unfortunately, most people have the habit of asking poor questions of themselves and therefore they spend their time focusing on lousy things. The result is a poor attitude, which leads to poor behaviors and poor results. Simply changing the habitual questions you ask yourself can change all this.
I have a friend who created a list of positive questions that he could rehearse every morning in the shower. They were simple questions like, “What am I most excited about?” and, “What are my goals?” He had the list laminated with a title that read, “Shower Power”. Each morning he read each question on the list and answered it. Some of the impact was immediate –– He felt much better after asking and answering the questions. But the most important benefit of his morning ritual was not immediate. The most important benefit was the habit that formed by asking and answering the questions every day. It didn’t take long before the habitual questions my friend was asking himself were those on the list. His habitual focus was much more positive than it had been. His attitude changed and it wasn’t long before he was experiencing much better results professionally.
Another example of this can be found with Sir John Templeton, founder of the Templeton mutual funds, one of the greatest investors of our time, and one of our world’s self-made billionaires. In an interview I was present for, Mr. Templeton stated that he attributes much of his success to a little game that he and his wife played for 50+ years. The game consisted of asking each other the same question every morning and not allowing one another to leave the house until the question was answered five new ways. The question was “What are you grateful for?” He said with tremendous certainty, “I believe that the foundation of wealth is gratitude. If you habitually ask and answer the question ‘What am I grateful for?’ you feel wealthy. When you feel wealthy, you make decisions that lead you to wealth.”
What would happen if you created a list of positive questions and made sure that these questions became the habitual questions you ask on a daily basis?

Jason McComb <newsletter@tdogs.com>

Multifamily Property Management –
Customer Service – It’s not just important, It’s the difference.
By Jesse Holland, president, Sunrise Management & Consulting

Is your customer service program up to snuff?  In today’s fast paced, high tech world you have to make sure your apartments can compete, and not just with the property down the road.

Let’s look at a typical multifamily property tenant, Jane Business.  Jane has a good job, impressive salary, good credit and good references.  She has no problem paying the first month rent and security.  And Jane is very busy, busy at work, and busy at looking for an apartment.

She has a major report due in two days, and an apartment she needs to find by the end of the month.  Her day is filled with transactions and decisions that are impacted by customer service.

Jane has a software glitch that is causing her headaches in finishing the report.  She calls into her support tech center, and while online, the tech dials into her system, downloads a patch, and she is up and running.  Finishing the report she emails it to her local graphic company for 50 bound copies.  It is delivered several hours later, with a bag of fresh baked cookies.  While enjoying a cookie, she calls FEDEX and her call is answered on the second ring.  The rep looks up her account information and schedules a pick-up in a matter of minutes.  Before she leaves at the end of the day her report is out the door.

While she is doing these things, she is also scanning the local paper looking for an apartment in a multifamily property.  Is her experience, typically, going to be as ‘customer service’ friendly?

Typically, she will call several ads that look appealing to her.  Three are answered by a machine with a message to leave her information and someone will get back to her.  She leaves messages on all of them.  She connects with one, and the leasing agent provides her with basic information, a two bedroom apartment, $650 plus utilities.  The agent doesn’t know the square footage, or what the utilities run for that apartment.  More importantly, the agent does not give her any reasons to come look at the apartment.

Still, she asks to make an appointment that evening.  Sorry, but it will have to be before 6pm, or the next day.  As Jane is busy presenting her report the next day, she takes the appointment that day, leaving work early to make it.  Once there the agent is 10 minutes late for the appointment, and is just finishing up with someone else.  The lawns haven’t been mowed recently, and the lot has papers blowing around.  Twenty minutes later the agent shows up, and, unable to get the key to work, has to go back to the office for the correct key.  Once in the apartment Jane finds it hasn’t been cleaned from the last tenant yet, but is reassured that it will all be taken care of.

At the end of the day she has not been called back by the three properties she left messages at, and she realizes finding an apartment is going to be a very time consuming task.

Our tenants not only compare us to each other, but also to every other experience they have in their economic life.  Multifamily property managers are absolutely in competition with companies like FEDEX, because they have established the standard of how our customer wants to be treated.

Customer service is a universal principle of good business.  It can set you apart from the majority, and directly impact the performance of your property.  First impressions are critical.  That first contact with a potential tenant will establish how they view the property, and the property management.

Jane’s customer service experience with a properly managed multifamily property will include:

A return call immediately, if only to schedule a time to speak
Detailed information about the neighborhood, amenities, utilities and square footage
Appointments scheduled to her convenience
A friendly leasing agent who is there before she is
A clean apartment to look at
Applications and paperwork available at the meeting
Professional treatment that tells her that the property management cares, about the property, and about her

And customer service extends beyond the leasing agent.  How much more does it cost you to fill a vacancy than it does to retain a resident?

We should regularly evaluate the customer service our property management frontline provides.  While customer service is not hard to deliver, it does take training and focus to really implement a true customer service program.  If your staff is not up to snuff, provide them the training and direction they need to succeed.

Financial models don’t rent apartments

Multifamily real estate investment isn’t about the sticks and the bricks, or the financing.  Computing or  understanding cash flow models, net present value, or internal rate of return doesn’t make for profitable investments.  Financial statements don’t predict the future – only tell the story of the past.

Multifamily real estate investment is about people.  Tenants are people, management and maintenance staff are people.  Owners are people.  Each has their own needs, concerns, desires and emotions.  None of which are a numerical entry in a financial model.

The most important people are the ones who pay the bills.  Without tenants real estate is worthless.  Unless someone is willing to occupy the space and pay the rent all the rest is meaningless.  They are our customer and we need to remember that we are here for them, not the other way around.  All of our policies and procedures must be designed around the concept “the customer is king” .  While we fulfill one of the most basic needs of Shelter, we have evolved much farther than that.  Beyond safety and security comes tastes and desires, amenities, and service.  It’s not just someplace to live, but the entire experience of living.  A 15 minute chat in the clubhouse will tell you more about the economy, rental market, competition, staff and attitudes than any model, chart or market report.  Google has become the champion of listening to their customer.  Detroit and the car industry has crashed because they don’t.

Our front line staff is the next on the list.  We expect everything to run perfectly.  Seven days a week , twenty four hours a day and 365 days a year.  And if people were perfect it would.  Typically front line staff is not well paid, younger and barely trained.  Yet we expect them to run multi-million dollar assets to perfection.  These people need our support and appreciation.  They get hit with the problems first hand.  They are screamed at by the irate tenant, deal with rude and obnoxious people, Deal with endless details and problems. And often, barely asked their opinion, no less thanked.  Unless we properly support and care for our front line staff, the apartments won’t get rented. The work orders won’t get written or fixed.  The accounting won’t get done.  The financial models won’t compute.

Last is the Ownership.  Which is often the toughest pill to swallow.  Investors want their returns.  Auditors want their reports.  Lenders want their payments.  Everybody wants something.  When you’re the guy putting up millions of dollars and taking the risk it’s easy to feel you should come first.  But ultimately this has lead to our undoing.  Wall streets collapse, huge foreclosure numbers  401ks that are now 201ks.  The customer has spoken – they won’t pay the bill.

Capitalism works fine – we have just stopped focusing on what’s good for our customers and those who do will be rewarded in these tough times with stability and affluence.  Those who don’t will perish.

Property Management- not just collecting rent and fixing toilets

Property management is easy, right?  Collect the rent, pay the bills and fix the toilets.  Like driving a car is easy, just turn the key and step on the gas, right?  Wrong!  Both need proactively managed systems to get you where you want to be,   efficiently and safely.
For today’s investor, property management may be one of the single most important factors in the success of a real estate investment.  The proper property management team will bring organization, expertise, experience and consistent systems to the operation of your real estate.  Yesterday’s “Collect the rent & fix the toilet” type of property manager can bring the investment financial problems, liability issues, customer service nightmares and all out disaster.
Today’s property management team needs to be experts on many management systems, such as investments, finance, risk, customers, facilities and human resources.
Investment management.  Investment in real estate is rewarded by consistent, predictable cash flows that meet ROI objectives.  If your manager doesn’t understand how it’s supposed to work and how operations impact returns, then the value of your asset is at risk.  Today’s property manager understands investment objectives and works to assure stable income and value growth.
Financial management.  Information is power, and financial information is critical for success.  A 200 unit apartment complex may have upwards of 1000 transactions per month.  Being able to create accurate financial statements is key to making proper managerial decisions.  If you don’t have proper accounting and reporting systems you are managing blindly.  Hand ledgers are a thing of the past.  Today’s property management team uses computerized financial management systems that deliver full monthly statements and supporting schedules.
Web-based advertising, effective communications (email), record keeping, materials ordering, and tenant screening are all systems that are efficiently managed on computer-based programs. Larger firms include payroll, scheduling, cash flow analysis, work order tracking, and emergency dispatch on computer-based systems.
Risk Management.  Liability is everywhere; you can be sued for both what you know, and what you do not know.  The same is true for government regulations.  Fair Housing Law, Civil Rights Law, HUD Regulations, State Building Code, Local Building Code, Environmental law, Title X Lead Paint regulations, Air Quality Standards, 
Rent Control, Rent Stabilization, and the list goes on.
And don’t forget the insurance company. Today’s manager needs to know about insurance requirements and processes. Just understanding how the insurance industry prices and sells their products allowed a client to save $50,000 in one year.  A properly handled claim can mean thousands of dollars difference in your pocket.
Then there is disaster planning – and recovery.  Natural and man-made events happen, regularly.  How do you handle a flood, a fire, an accident, heaven forbid another terrorist event.  Today’s property manager has contingency plans when something happens.
Customer Management. The customer (tenant) is the most important piece of the puzzle.  In no other industry can the customer be treated with such animosity by a service provider.  Where other industries will bend over backward to make a client feel important, yesterday’s property manager treats your tenants as a number – 3b has another problem.
Today’s customers don’t just buy products, they buy experiences.  Your residents are no different.  They want to feel good about renting, they want to be part of a community, not just an apartment number.  Today’s property managers are trained in customer service and focus on retaining happy and satisfied tenants.
Facility Management.  The physical asset is the foundation of the investment.  Poor maintenance procedures impact your ability to attract and retain quality residents.  Poor preventive maintenance and poorly executed capital projects drive up costs, and impact the bottom line.  Today’s property manager is trained to get the most out of maintenance dollars to keep tenants happy and build property value.

Human Resource Management.  People make a difference.  Staff that is well trained and rewarded will take good care of your tenants.  Hiring and training is the key.  Today’s property manager utilizes human resource systems to hire great people and keep them producing top results.

Not just Collecting Rent.  So how do you make sure that all of these things are happening with your real estate investment?  The key is having a management system.  The most difficult thing in property management is consistency.  What investors are looking for is a consistent cash flow.  By having a system of planning, executing and evaluating the results you can achieve that goal.  Today’s property management teams combine tried and true procedures, best practices, state of the art technology and training in a management system that delivers long term success.

Time To Raise The Bar

We have all heard the cry – “ The Absentee Landlord is to blame”.  The cities, towns and villages, the neighbors, businesses and community groups, are all blaming the income property owner for their problems.  This needs to change.

We need to get all of these groups to work with us, not against us.  We need to convince them that we are professionals. We invest great sums of money in the community when others won’t. Rental real estate is one of the capital regions largest businesses.  WE pay the property taxes.  WE pay the school taxes.

It’s time to Raise the Bar.  All rental property owners know the keys to success.  Good tenants, low turnover, rising rents.  The Howard Group/Sunrise Management and Consulting’s Market Study bears out that the better operators get higher rents for similar product.  Higher rents mean money for improvements,  higher returns, and growth of equity.  For the communities this means better neighborhoods and growth of the tax base.

The Howard Group/Sunrise Management and Consulting’s Market Study is the first step in a long process.  Large property owners, rental property associations, municipalities,  management companies and small property owners must work together to keep the real estate market healthy and growing.

The Howard Group, Sunrise Management and Consulting, Interclaim Worldwide and others have joined together to provide information and education for Landlords of all sizes.  The next market study will include the smaller properties  smaller geographic breakdowns, unit breakdowns, vacancy information and trends in the market.  To participate or receive a survey  please go to our website at:   HYPERLINK http://www.sunrisemc.com www.sunrisemc.com and click on market survey., or call us and we will mail you one.  If you participate, we will send you a copy of the survey at no cost.

The time to Raise The Bar is now when the market is strong.  Don’t hesitate, Do it NOW!

SUNRISE MANAGEMENT AND CONSULTING
An affiliate of THE HOWARD GROUP – TCN Worldwide

1735 Central Avenue
Albany, NY 12205
518-452-1881
hcarr@howardgroup.com
jholland@howardgroup.com
rdolins@howardgroup.com

Good times or Bad
Leasing prowess makes a difference

When was the last time you shopped for an apartment.  As senior management it is easy to get away from the front lines.  “I don’t have to do that anymore” echoes threw the corporate office.

In the course of generating the Sunrise Multifamily Market Report we literally talk to thousands of front line rental agents.  We request the same information in the same way from each, so the comparisons are easy to make.  Most interactions fall into a few categories.

The “newbie”: This person just started as a rental agent.  They have received no training and very little information.  We even had one person who did not know what an amenity was.  At best they can give you rental rates.  How they ever manage to rent an apartment is a mystery.

The “can’t be bothered”: This person doesn’t want to give any information about the community as if it was a secret.  They try and get off the phone as quickly as possible, won’t volunteer any information unless asked directly.

The “professional”: This person has the information they need at there fingertips.  They have been well trained and rehearsed there sales presentation so it is flawless.  They are a pleasure to talk to and you feel that they want your business.

The “nobody out there”: This person doesn’t seem to exist.  Nobody answers the phone or returns messages that are left.  The office never seems to be opened or staffed.

The collateral paperwork also seems to match the phone experience.  Some properties have nothing, some provide copies of copies of copies, and some provide professionally prepared marketing pieces that look great.

You never get a second chance to make a first impression.  In today’s fast paced environment that usual means the first impression of your property is either on the phone or the Internet.  So if the rental experience at your property is not up to par, you will never see the prospect.

Take care of your Management Staff and they will take care of you

An apartment is an apartment is an apartment.  Every one has walls, floors, ceilings, kitchen ,bathroom and bedrooms.  In the grand scheme of things there is very little that separates one apartment from another or one community from another.  Yet communities, even right next to each other, are vastly different.  The one thing that makes the biggest difference is the staff.

Why is it that one management team can make a property a great place to live, receive top rents and fantastic financial results, while another management team can run it into the ground.  The key-determining factor always seems to come back to the staff.

Let’s take a look at two different methodologies.   I have seen the first happen over and over again.  The staff at property A have all been there for a very short time.  The owner has very little involvement other than in setting the budget.   Staff turnover is high at this property, they are constantly having to hire.  The hiring process is disorganized at best.  Pay is low, benefits are non-existent.  So a new rental agent is hired.  On his first day he is given a set of keys, a list of vacant apartments, and barely legible employment paperwork.  He is told to answer the phone and rent apartments. The manager is out sick today but do the best that you can.  Is it any wonder he can’t rent any apartments. The staff at this property as a whole is demoralized.  They are never given positive feedback, only yelled at for doing things wrong.

Employee Training Programs: Investing In Your Biggest Asset Will Yield Favorable Returns

We have all heard the expression “employees are your biggest asset”. For this reason, many employers today are investing substantial resources in employee-development programs. Especially in today’s competitive marketplace, it is important for workers to be equipped with more than just the technical know-how.  They must also have the ability to think resourcefully, implement plans strategically, and interact effectively with others. Employee training programs can be a key investment in the success of your organization, as they increase workforce productivity and improve your bottom line. Without proper training, you run the risk of employing an underachieving staff and, thereby, losing money in lost productivity.
So, how do you determine if the training cost is justified?  You need to consider the Return on Investment (ROI), a mathematical comparison of benefits to cost expressed as a percentage of the original investment, according to Ben Worthen of CIO Magazine. The ROI formula is expressed as ROI = (savings/costs) x 100. In simpler terms, it is a way of determining if the benefits received from training justifies the investment cost.
To complete an effective ROI on training programs, you would identify the critical areas in your property management operations that need improvement, establish goals you wish to achieve from the training, then analyze the results. In order to calculate the ROI, the results must be converted to monetary values to come up with the savings amount. In the case of increased productivity, it can be measured in terms of employee compensation saved.  You would simply multiply the hours saved by the employee’s hourly wage.
For example, ABC Company has two similar properties requiring improvement in closing ratios and tenant retention, managing customer complaints, and problem solving. ABC Company decides to send property managers and frontline staff for training on effective selling, customer service skills, and strategic planning at a cost of $600 per person.  The goal is to have fewer vacancies, fewer customer complaints, and less maintenance time.
In order to complete an effective ROI analysis, ABC Company sends the six employees from Property A, but holds off on sending the staff from Property B until it has assessed the impact of the training. The success of the training program is evaluated in the 30 days following the seminar by tracking: a) the vacancy rate, b) the number of customer complaints received, c) the number of problems solved at the frontline staff level, and d) the completion time on projects.
The Results: Property A spent $3600.00 on training for six employees. The Property B staff received no training, therefore incurred no additional expense. During the evaluation period, Property A increased their closing ratios by 25%, received fewer customer complaints, resolved problems quicker, usually without management involvement, and maintenance staff was called ten hours less for the month. The decreased vacancies and the increased productivity, converted to a monetary value, produced a savings amount of $7250.00. In the same time period, Property B’s numbers remained flat, showing that the training had a measurable impact. Did the training produce a positive ROI? To calculate, the measurable improvement is divided by the cost and multiplied by 100. ABC Company’s training ROI is ($7250/$3600) x 100 = 201%.  This is a valuable 201% return on their investment for employee training.
Can you afford the lost productivity of an underachieving staff by NOT allocating resources toward training? Your company’s investment in training can be one of your biggest competitive advantages. It will result in a more focused, results-driven organization that will ultimately improve property performance.

Training – How can we afford that now?
Recently one of our clients questioned the size of the training budget for their property.  A fairly large client with assets throughout the country, the executive was comparing what we were planning to spend against what managers of other properties were proposing.  Our training budget was less than one tenth of one percent (.01%) of the operating budget, and much less than the allocation for maintenance of the physical asset.  Apparently our colleagues were cutting training.  Given the challenging economic times, and the need to control spending, the executive wanted to know why we had not cut the training budget.
My answer, can you afford to cut training in challenging times?
Everyone’s budgets are tight this year.  The pressure is on to cut expenses whenever and wherever possible.  The training budget is an easy target.  It’s certainly not like paying the water or utility bill.  But I would argue it is one of the most important items in the budget.
Yes, we are facing some of the toughest economic times on record.  We have all been pounded daily by the bad news, the foreclosures, layoffs, and financial scandals.  It is doom and gloom all day, every day.  Yet, while upper management tries to figure out “what to do”, the front line staff still goes into battle each day.  Rental staff is told to “rent more apartments” and “find a way to generate more traffic”.   Maintenance staff is told to “cut expenses” and “only buy it if you absolutely need it”.  We tell our vendors “I need a lower price” and “do it for less”.  And during all this, our property managers continue to deal with the residents who “want more, want it now and want it for less”.
So, why does training matter?  A better question is, does poor customer service matter?  Do material waste, workplace injuries and low morale matter?  Does high turnover matter?
The front line staff is the critical interface with our customer, our profitability depends on them.  They are just like everybody else.  They have fears and needs and are just as tuned in to the economic doom and gloom as everyone else.  Many people, including site staff, are becoming virtually paralyzed by the dire news.  It is a negative spiral, one we must address.  Only with our full support and proper tools will the site staff be able to stop that bad news at the door, and get the job done.  With training we can reinforce skills, develop best practices, and motivate a professional staff.
Reinforcement
Training provides process and procedures.  Regular training reinforces the behaviors.  A well trained staff member knows how to handle an upset resident.   They don’t spend their time fixing errors; they prevent them and spend time on creating relationships.  They apply the rent payment the right way, the first time, every time.  They make sound decisions.  They know how to spend the owner’s money wisely.  Knowing what to do, they feel more confident.  They know that they are important to the success of the operation, because the upper echelon has spent time and money on them.
Best Practices
Workshops and classes are also a time to share ideas, problems, and solutions.  Participants not only learn about the specific topic, but learn what their colleagues are going through.  Pitfalls can often be easily avoided if you know about them.  A shared solution at one property often works at another.  And, especially in a small town, knowing about the nightmare tenant about to be evicted from one place can prevent the mistake happening at another.   With knowledge of best practices our staff develops the skills necessary to think outside the box.
Motivation
Another by product of the training experience is people get excited.  I have yet to go to a training program or conference and not gotten excited about something.  New ideas get developed, problems get solved, your spirit is uplifted and you get ready to go out and fight another day.  Too often in our industry the top management goes to conferences, and the front line gets left home.   Train staff to motivate and succeed.
Can we afford to cut training?
At the end of the day, an apartment is an apartment.  It has four walls, a floor, a ceiling, kitchen, bathroom and bedrooms.  What make our assets a special community is our people.  It is the front line staff that is in charge of selling, fixing and controlling our properties.  A well trained staff resolves problems before they happen.  They make an apartment a home.  They make our customers feel special.  They reduce turnover and increase revenue.  They protect us from lawsuits.  They make a hard job look easy.
Training is that ounce of prevention that saves a pound of cure.  It is the investment we can least afford to cut in tough economic times.