Where Wall Street meets Elm Street
or
Financial models don’t rent apartments
The investors, analysts and portfolio managers of Wall Street use data reports and financial models to make assessments about the viability of multifamily investments.
But multifamily real estate investment isn’t about the value of bricks and mortar, the journal entries, or the financial analysis.  Using cash flow models, understanding net present value, or calculating internal rate of return doesn’t make investments profitable.  Financial statements cannot predict the future nor do they contribute to value; financial statements only tell the story of the past.
Elm Street is where the feet of multifamily investment meets the street; where the tenant lives, the frontline staff works, and the real engine of results resides.
Multifamily real estate investment is about people; the people who live in the property, the people who manage it, the people who maintain it, and the people who own it.  Each has their own needs, concerns, desires and emotions.  None of which can be found in the numerical entry of a financial model.  Financial modeling cannot predict how people will behave or perform.

The most important people to a profitable real estate investment are the ones who pay the bills, the tenants.  Unless someone is willing to occupy the space and pay the rent all the rest is meaningless.  Without tenants real estate is worthless.    The tenant is 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 service concept; “the customer is king”.  While we fulfill one of the most basic needs – shelter, our investment is much more to our customer.  Beyond safety and security are 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.  We need to listen to our customers.  Google has become the champion by listening to theirs.  Detroit and the car industry crashed because they didn’t.

Our front line staff is the most important interface with our customer.  We expect staff to run everything perfectly; seven days a week, twenty four hours a day, 365 days a year.  And if people were perfect maybe they would.  Typically though, front line staff is younger, inexperienced, barely trained and not well paid.  Yet we expect them to run our 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 irate tenants, deal with rude and obnoxious people, attend to endless details and problems.  And often, barely asked their opinion, no less thanked.  Unless we properly support, train and care for our front line staff, the apartments won’t get rented, the work orders won’t get written, and the accounting won’t get done.  The financial models won’t compute and the investment will suffer.

Last is the Owner, who often has 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 losing sight of the customer will ultimately be our undoing.  Wall Street collapses with huge foreclosure numbers.  401K’s are now 201K’s.  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.  Those who do will be rewarded in these tough times with stability and affluence.  Those who rely on financial models and lose sight of the customer will perish.

We are all susceptible to employee theft

In real estate management we deal with huge sums of money, handled in many locations by both front office and support staff.  This presents seemingly countless opportunities for fraud and employee theft.

The best way to avoid fraud, according to Joseph Hanlon, CPA with Teal Becker & Chiaramonte in Albany, NY, is prevention.  Real estate managers need to understand where fraud and theft weak points are, and address them with internal controls and preventive procedures.

In a typical property management office we have numerous processes where an ounce of prevention can be effective in reducing fraud opportunity.

A point of greatest risk is accepting cash for rent.  Cash has a funny way of being able to disappear with out a trace.  Prevention here is easy, don’t accept cash, period.  Most people have checking accounts and everyone has access to money orders or bank checks.  Even better from an internal control stand point is accepting credit or debit card payments.

Security deposits are another key area.  Often these involve extra accounting and keeping funds to segregated accounts.  The constant turnover in large apartment complexes can make keeping these accounts balanced a moving target.  Keep things under control with regular proactive reconciliation of accounts and segregation of duties.

Vacancy and accounts receivable can also be targets.  A rented unit shown as vacant or a move in that doesn’t make it into the computer until the second month can result in diverted funds and add up quickly.  Write downs on accounts receivable and unresolved receivable items can mean dollars are being stolen.  Keep things honest with weekly vacancy and move in reports and random inspections.

Reserve accounts which typically have large sums of money are possibly one of the scariest areas of potential fraud.  These accounts get little action and usually are in CD’s or savings accounts that provide only quarterly or annual statements.  Many a condo association has come up on the short end of this stick.  Be sure to monitor and reconcile every Reserve Account statement.

And theft doesn’t happen only with funds.  Most complexes keep some level of inventory for maintenance items and appliances.  Look for out of the ordinary purchases and spikes in certain supplies.  If you usually use 5 smoke detectors a month, how come all of a sudden you bought 25?  It could be buying at a discount, but asking the questions will keep people on their toes.  Regularly review inventory and supply reports, and let your staff know you are looking.

It is also important to provide owners and investors with accurate monthly financial reports.  We have taken on many a client whose past property manager has failed to give them accurate or timely financial statements.  These reports enable informed decisions and serve as a preventive control.  If you are not preparing regular reports someone could be stealing you blind, and you would never know it.

While all this can be somewhat scary and daunting, a little effort and a few simple guidelines can help prevent fraud from happening to you.

Background Checks – know who you are hiring and doing business with
Internal Controls- controls keep honest people honest
Inspect what you Expect – the perception of detection is great deterrence
Set a good example – if you take things your staff will justify why they are entitled.
Watch for “red flags” – do things look like they should or is the story just not right
Watch the cash – Open all bank statements and check for unusual items, forged signatures and vendors you don’t do business with.

With preplanning and due diligence you can reduce fraud and theft opportunities and prevent potential losses.

We have all heard the expression “employees are your biggest asset”.  These “assets” are the basis of a company’s success, and as such, business gurus advise companies to “treat them well” and “groom them for success”. For this reason, many employers today are investing substantial resources in employee benefit packages and employee-training programs.
Employee training programs are a key investment for increasing productivity. Essentially, employees are a business investment just like computers.  Just as you would invest in software and upgrades to increase productivity, investing in employee training will do the same. It will empower your staff with the knowledge to make significant contributions to the overall profitability of your company. In today’s competitive marketplace, workers must be equipped with more than just the technical know-how.  They must also have the ability to think creatively, implement plans strategically and interact effectively with others. Without proper training, you run the risk of employing a workforce that is ill-equipped to handle these ever-changing demands of the industry.
While skimping on training might seem like a way of cutting costs in the hope of improving your bottom line, how much are you losing in lost productivity, paid in wages to underachieving staff? To determine if the training cost is justified, you need to consider the Return on Investment (ROI).
ROI is 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)x100]. In simpler terms, it is a way of determining if the benefits received from training justified the investment cost.
Training ROI analysis helps determine whether or not training programs add productivity to an organization. To complete an effective ROI on training programs, identify the critical areas in your property management operations that need improvement, establish goals for the training, then analyze the results.
Let’s consider, for example, that ABC Company has  two similar properties requiring improvement in performance. It hopes to improve soft skills such as listening, problem solving, and managing customer complaints. ABC Company decides to send property managers and frontline staff for training on customer service skills, effective selling, and strategic planning at a cost of $600 per person.  The goal is to have fewer vacancies, fewer complaints, less maintenance, and less staff turnover.
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 number of customer complaints received, b) the number of problems solved at the frontline staff level, and c) 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 received fewer customer complaints, resolved problems quicker (usually within one phone call), and maintenance staff was called ten hours less for the month.  The increased productivity 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)x100=201%.  This is a 201% return on their investment for employee training — well worth the investment.
Ultimately, you need to ask if you can afford NOT to invest in training.  Can you afford the lost productivity of an underachieving staff? 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 increase productivity and property performance.

Most people feel that property management is easy. How tough could it be to collect the rent, pay the bills and fix the toilets.  But that is like saying driving a car is easy, just turn the key and step on the gas.  What’s so hard.
Today, the property management aspect may be one of the single most important factors in the success of the real estate investment.  The proper property management team will bring organization, expertise, experience and consistent systems to the operation of your real estate.  The “anybody can do it” property manger can bring financial problems, liability, customer service nightmares and all out disaster.

What’s in today’s property management.  Your team needs to be an expert on many issues.
First is real estate investment theory.  If your manager doesn’t understand how it’s supposed to work, how to calculate your return, the general principals of real estate they can’t even help you enumerate the goals.
Next, accounting.  Accounting is the root of all decision making.  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, how do you know how your doing.  In addition, these need to be up to date accounting systems.  Hand ledgers are a thing of the past.  If you can’t even use Quickbooks at a minimum you shouldn’t be in the game.
Even if your accounting is not computer based, you need to be computer literate.  So many of today’s operations are computer based.  Web based advertising, communications(email), record keeping (accounting), materials ordering, tenant screening,  just to name the simple ones.  Larger firms include payroll, scheduling, cash flow analysis, work order tracking, even emergency dispatch is all computer based.
But these items are only some of the tools.  Let’s talk regulations.  There are more and more everyday.  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.
How about liability- insurance is part of our everyday lives.  Your manager needs to know about insurance as well as risk management. Just understanding how the insurance industry prices and sells their product has allowed us to save client $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 have been ever present in the news.  How do you handle a flood, a fire,  an accident, heaven forbid another terrorist event.  When something happens it is the property manager who will be center stage.
Then there is the everyday stuff.  There is marketing – brochures, newspaper ads, web pages.
There is actually taking care of the customers – the life blood of our industry, that we are notoriously behind the curve.  In no other industry is the customer (tenant) treated with such animosity by the service provider(landlord).  Where other industries will bend over backward to make a client feel important, many of us treat our tenants as a number – 3b has another problem.
But the list goes on.  Your management team also needs expertise in contracts and contract law, negotiations, construction, maintenance, Human Resources, Employment law, Landlord tenant law.
So how do we make sure that  all of these things are happening with our real estate investment?  The key is having a 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.  Tried and true procedures, best practices, and education all working together in a proven system is the secret to long term success.

It’s the wireless revolution (wireless fidelity, or WiFi, lets users connect to the Internet at high speeds without cables) and everyone’s getting behind this high-tech phenomenon.  But, we’re not just talking laptops and PDA’s anymore.  “Wi-Fi compatible” is starting to become a common description in more product specifications – like appliances, cell phones, printers, and stereos – as the technology is also used to connect such devices remotely.  Therefore, it’s no surprise the astounding number of businesses, such as Starbucks, that are becoming public Wi-Fi hotspots as a means to attract customers. Sunrise Management & Consulting, a third-party property management company headquartered in New York’s Capital Region, is one of these businesses embracing this hot commodity by adding wireless access to its amenity package.
For Sunrise Management & Consulting, the idea of creating a wireless community for its residents was spawned by several contributing factors.  Although the accelerated popularity of wireless technology played an important part, there were other factors that sparked the idea over a year ago.  The initial idea was to add some sort of high-speed Internet access since the Capital Region was quickly growing into a high-tech area, commonly referred to as “Tech Valley” by national business publications.
The initial idea originated from the various practices associated with Sunrise’s customer-driven, value-added philosophy.  The company constantly looks at the needs of the market and its existing residents for ways to enhance its properties.  According to Sunrise Management’s President Jesse Holland, it’s important to know who the renter is. The demographics of the typical apartment renter have changed so it’s not just college students and singles anymore.  There are a growing number of affluent professionals in the mix now. “The high-tech companies in this area are grooming tech-savvy employees so it’s important to keep pace with them,” Holland said.
Sunrise Management & Consulting also has an intimate understanding of the multi-family rental market in the northeastern part of the United States through its bi-annual market reports.  The company researches multi-family rental markets for competitive analysis and publishes the data for public use.
“Because of our Sunrise Rental Market Reports, we have an excellent understanding of what we’re competing against, as well as emerging industry trends,” Holland said.  “Our last report revealed an increased use of concessions, which could indicate that potential residents are shopping around more – all the more reason to be competitive with amenities.”
During discussions with different Internet service providers, Sunrise Management & Consulting was approached by Tech Valley Wireless, a wireless Internet service provider that provides wireless infrastructures to residential communities.  Tech Valley Wireless is a subsidiary of WiFiFee, LLC, which created the WiFiFee billing software that enables users to use their WiFi accounts at over 400 locations nationwide.
“Tech Valley Wireless’s presentation really opened our eyes to wireless,” said Sunrise Management’s VP of Operations Keith Flores.  “The wireless option had much more to offer than the traditional wired broadband connections.”
First, the cost to residents for Internet service is less expensive than competing broadband providers.  Plus, subscribers have access at over 400 WiFi hotspots in the U.S. with no roaming charges.
Secondly, with a wireless infrastructure, the benefits go far beyond just high-speed Internet access.  It creates a wireless community where residents can have wireless connectivity with their devices free of charge, or to the Internet with a paid subscription, in their kitchen, by the pool, or anywhere on the property.  With the proliferation of a new breed of wireless products in the marketplace, this was an important benefit to Sunrise Management & Consulting so it could accommodate residents who owned such WiFi compatible devices.
Furthermore, the wireless infrastructure is added with minimal physical change to the property. It entails an antenna connected to an ISP, which is mounted at a high point, usually on top of a building. The antenna beams a signal on a Federal Communications Commission radio spectrum to a user’s antenna that feeds it to a computer.
And lastly, with this specific Tech Valley Wireless program that Sunrise Management & Consulting chose, there are no out-of-pocket costs and Sunrise will receive 5% of the revenues generated from the Internet subscriptions.  Tech Valley Wireless customizes every contract according to the needs of the property owner or manager. Some of the other options presented included a higher upfront cost with a higher percentage of revenues received, or including Voice over IP, an inexpensive way to route phone calls over the Internet.  In the end, this is the program that suited Sunrise’s goals the best.
“Our primary goal from this partnership is to add another amenity as a benefit for our residents and differentiate the property with a competitive edge,” said Holland.  “We’re excited about this venture and look forward to continuing our efforts to provide new and innovative ways to meet the demands of the rental market.”

Renters: Beware of new twists on an old scam

Combine a bad economy, a glut of abandoned homes and people in need of cheap housing and you’ve got rich ground for con artists posing as landlords and targeting renters.

The scam is as old as desire itself: sell a “super” product at a “low price,” then make off with the cash as the victim discovers he’s been left with a fake bill of goods.

Now, with a slow economy and more Americans in need of affordable housing, the age-old ploy is rife in the rental market. The rental scam comes in several variations, but it typically follows the same basic recipe: A con artist finds a property, pretends to be the owner, lists it online, then communicates with the would-be renter and takes a cash deposit.

The renter is left with nothing or ends up squatting on someone else’s vacant property while paying “rent” to a fraudster, all unbeknownst to the property’s real owner.

Familiarizing yourself with the scam can help you avoid being one of its unwitting victims. With that in mind, here’s a quick rundown of its various forms, followed by a list of tips on how to avoid falling prey to even the cleverest trickster.

A pretend owner ‘rents’ out a vacant home

Even criminals are subject to market conditions. If thousands of abandoned homes sit empty and thousands of people are in need of cheap housing, someone is eventually going to put the two together, legal or not.

In this case, the scam artist steps in to take advantage of the situation.

He finds an abandoned property, or two or three (these days, it’s not hard), and creates an online advertisement pretending to be either the owner or someone authorized to rent on the owner’s behalf.

He then breaks in, sometimes changing the locks, and typically asks to be paid in cash. In Las Vegas, a woman arrested for just such a scam had provided a contract and written rental receipts to a mother of two, and instructed the woman to meet her each month in a public location to pay her cash “rent,” according to a story in the Las Vegas Sun.

The real owner, who lived in California, arrived one day to find a family living in the home.

“When a house sits vacant for a year it becomes easier to take advantage of it. Six months of collecting rent at $1,500 can be hard to pass up,” said Sean O’Toole, founder and CEO of ForeclosureRadar.com, which tracks foreclosures in California.

As proof, take a case this year in Fremont, Calif., in which a former licensed Realtor rented out foreclosed homes at least 13 times before he was caught by a visiting owner. Police said he had 19 more foreclosed homes lined up to rent and had identified 126 others. He copied listings from the Multiple Listing Service and somehow obtained the key codes. He then instructed the would-be renters to change the locks, according to news reports.

Tenants in such cases did not intend to occupy a house illegally and aren’t going to be charged with a crime, police say. But the renters are going to have to move on short notice and are unlikely to see their security deposits again.

A fake agent pretends to rent a foreclosed property then splits before the renter moves in

This scam starts in much the same way, except the con artist supplies a throwaway or fake phone number and never supplies the keys to the property. He may also collect a deposit from several victims at a time.

In this case, the victim is out both the money and a place to live.

In Miami recently, a con artist went so far as to create a fake warranty deed and introduce himself to neighbors as the new owner.

“He showed me the house. He had a key. He knew the floor plans of the house, everything about the house. It was convincing,” the alleged victim, a teacher who handed over a $3,000 deposit, told the Local 10 television news.

As it turned out, several others had handed over deposits, too, and had shown up with moving trucks only to find they were unable to get in.

“It’s very, very devastating,” the teacher told reporters.

A fake property manager pretends to rent out a home that’s for sale

In this case, the con artist hijacks listings of homes that are for sale or rent by legitimate agencies. He may rewrite the ad a bit before posting it online (often on Craigslist, where posts are free), including undercutting the original price by as much as half.

When interested tenants respond, eager to secure such a good deal, the con artist may claim to need a cash deposit or application information – containing personal data that can be mined for identity theft – before arrangements can be made to view the apartment. The scammer may say he is out of state for work, or for some other reason has to rush to rent the apartment from afar.

The con artist may also use the name of an actual leasing agent and agency; when renters go online, they believe they are verifying the self-proclaimed agent’s identity. (See more on how to protect yourself.)

One woman in Florida who got access to a real-estate agent’s lock-box codes, apparently by pretending to be agent, printed rental contracts and business cards, which she displayed inside the home after hiding the real agent’s cards in a drawer, police said.

She also pulled the true realty sign from the yard and hid it in the garage during home tours. When one couple spotted the sign, she told them to ignore the telephone number on it, a move that made the couple suspicious and ultimately led to a police sting.

“If you were to listen to her when she was actually doing any transactions you wouldn’t think twice about it,” said Chuck Lee, an investigator with the Volusia County Sheriff’s Office in Florida, who followed one of her presentations. “She was very smooth.”

The woman would fill out a rental agreement on the spot and take a cash deposit, making arrangements to deliver the keys later and providing a telephone number, police said. She received money for several homes before she was arrested and charged, police said.

A real owner rents his foreclosed property

At times the scam artist is a desperate homeowner. Authorities say owners approaching, or in, foreclosure have been renting the property and pocketing the cash, removing eviction signs from the property to keep tenants in the dark as long as possible.

Renters may not learn their money has been taken until eviction day, although government agencies have been working to ensure that tenants get at least three months to move after a confirmed notification.

When renting, “you should as a matter of course check whether the property is in foreclosure or not,” said ForeclosureRadar.com’s O’Toole.

One free site dedicated to helping renters with this task is RentalForeclosure.com, where you can type in the property’s address.

A con artist borrows a real apartment or address and collects deposits and Social Security numbers

Instead of borrowing a listing, the scammer creates his own for an occupied apartment that he has borrowed or even temporarily rented using phony identification. He advertises a low price and creates a sense of urgency to encourage people to hand over cash and an application containing Social Security numbers to hold the unit.

For a dramatized example of how such a ruse is carried out— and how easy it is to fall for — check out this video by “The Real Hustle.”

In the end, the victim risks losing not just cash but his identity and banking information.

A con artist rents a real, but unavailable, apartment to tourists

Anyone can list a property as a vacation or temporary rental, and it attracts those visiting or moving from out of town. But a scammer will request that a security deposit and rent money be wired in advance, as opposed to accepting a credit card or check.

Visitors show up at the address to find no apartment and no valid contact information. Authorities say it is almost impossible to recover money that has been wired, which is almost as untraceable as cash, or even to find the perpetrators.

10 ways to spot a rental scam

Many of the same rules apply when it comes to spotting (and fleeing) any of the aforementioned rental scams. Here are the 10 things to do to avoid being ripped off.

1. Don’t give cash or wire money

This is Rule No. 1. Criminals prefer to work in cash, for what are probably obvious reasons. Once they accept checks, they have to create fake identities, which not only adds criminal counts but also risks capture. No one wants to get caught on surveillance camera at a bank.

“If you didn’t use cash, I’d say probably 90% (of these scams) you could avoid,” Lee said.

The same goes for money orders.

“Don’t wire anybody money as a down payment, because if you do there’s no way to get it back and there’s no way to track down the bad guys. Really,” said Leonard Gordon, regional director for the Northeast Region of the Federal Trade Commission, which issued an alert about rental scams.

But don’t stop there: You also want to avoid giving checks to someone who may be hustling bank account and routing numbers. Counterfeiters can print their own checks using your bank numbers and signature, then spend from your account. That’s why a combination of safeguards is necessary. Checks are safer than cash, but read on to ensure you’re giving those checks to legitimate landlords.

2. Research what the price really should be

“On all of the scams, the rental rate is too good to be true,” Gordon said. “They’re more interested in getting your money once, rather than a long-term rental payment.”

This is as true here as it is with any scam. But how do you know whether it’s too good a deal? How do you know what the price range should be? As it turns out, it’s not hard to check, professionals say.

First, make sure the listing has a valid address by punching it into an online map program. Next, go to a listing site used by professional property managers, such as Rentals.com, RentalHomesPlus.com or Move.com.  (Move.com is an MSN Real Estate partner.) Search for homes in the same neighborhood that are the same size and have comparable amenities.

You’ll notice that they tend to fall within about a $100 price range, said Fred Thompson, president of the National Association of Residential Property Managers (NARPM). If your original listing is $800 instead of $1,500, it is probably too good to be true.

“If it’s too low, then you should be asking what’s wrong. Either there’s something wrong with the property or the owner is desperate or in some stage of foreclosure,” said Thompson, who also serves as director of property management for Re/Max 200 Realty Property Management Division. Or, of course, the person you’re dealing with is not the owner at all.

3. Ask yourself, ‘Why is this owner so gosh darn eager to have me?’

Legitimate property owners and managers take the time to ask questions and screen potential tenants. They can’t risk renting to someone who might cause damage or fall behind on payments.

They may take a small fee ($15-$35) with your application to pay for a background screening, or a deposit in the form of a cashier’s check to hold the apartment if they need to take it off the market for a day. Most will not even accept cash, saying they don’t want to risk holding cash. A cashier’s check at least requires identification to cash and can be traced.

But a scam artist will often be eager to close the deal with cash on the spot, and may very well have a good story to tell about why he is in such a hurry: He is moving for a job; others have expressed an interest. Don’t fall for it.

Remember, if somebody wants to take the time to check you out, don’t be offended; that’s actually a good thing.

4. Pay attention to any odd behavior

In Florida recently, a scam artist who appeared legitimate in every other way – she had business cards, contracts, key codes, a professional demeanor – displayed one piece of odd behavior that alone should have tipped off her victims, police said: She parked her car around the corner and walked to the house, explaining that she’d been showing a nearby house.

Legitimate listing agents “don’t come walking up with a clipboard in their hand,” said Lee, the police investigator. They pull into the driveway.

“Just be aware,” he said. “Get a tag number off a vehicle. If a person walks up, like this one, from two blocks away, that should be a clue.”

Observe their behavior, and trust your gut if something seems odd.

“Do they have a set of keys? Are they entering through the back door? Just how they’re acting — does the story make sense?” said Jesse Holland, a regional vice president for the Institute of Real Estate Management.

5. Collect documents

Ask for copies of everything: checks, money orders, the application, receipts, the lease.

“You want to create an audit trail and a paper trail to protect yourself,” said Holland, who also serves as president of Sunrise Management and Consulting, in upstate New York. “That proves that you are entitled to rent it and have gone through a legitimate process, as opposed to, ‘You give me $700 cash.’”

Be aware that a savvy scam artist can easily create his own documents using samples from the Web. So paperwork by itself is not enough to protect you. However, should another sign tip you off, your papers could help authorities prosecute the con artist.

6. Ask a lot of questions

“Ask, ‘Do you have a plumber? How do I get ahold of you if you’re on vacation?’” Holland said.

Do they have a lead-disclosure form if the property was built before 1978? Do they have a certificate of occupancy from the municipality?

Legitimate property managers will either have answers or be willing to get them. So ask questions and be wary if the answers don’t seem to make sense or the person seems unreasonably uncomfortable or defensive.

7. Meet at a rental office

If you really want to be safe, use a professional property management company and meet your agent inside his office.

“Generally, if you meet at an office you’re OK,” said Sgt. Virgil Ford, of the Volusia County Sheriff’s Office.

Except for in a few cities in the Northeast, it is standard practice for the property owner – not the renter — to pay the management company’s initial fee to match an apartment with a tenant, Thompson said. Furthermore, companies set the rent at — and not above — the market rate.

In other words, it should not cost a tenant any more to use a professional leasing agent than it would to deal directly with owners, Thompson said.

Still, many legitimate owners manage their own properties. And many legitimate, small property-management companies use a home office and meet renters at the properties. So …

8. Confirm the identity of the agent or owner

Make sure the person you meet is who he says he is, and that he is either the owner or property manager.

Unfortunately, this requires more than seeing a business card. Scam artists have been borrowing the names of real property managers and printing fraudulent stationery, contracts and business cards. They have even been creating fake warranty deeds to the property.

So, go to independent sources. Fortunately, this is also not difficult:

* If he has listed an agency name, look up the listed number for the agency and call it. Ask to meet the “agent” at the office. Property-management firms commonly list photos of their agents. Check that photographs, telephone numbers and other information matches what you have received from the agent.

* To see who owns the property, go online to your county property records office. Call if you need assistance. These days, many municipalities have databases that let you simply punch in an address to find basic information about any property, including who owns it.

* If you’re dealing with a property manager who has a business address that’s not a business location, that may be OK. Some work out of their homes and do meet potential tenants at the rental properties. But legitimate managers will more than likely be members of a professional organization. You can search for their name at the NARPM, and make sure that the Web and business addresses listed with the NARPM or its regional chapter match those the agent provided to you.

* Some states require that leasing agents be licensed. Check with your state’s Department of Real Estate. You should also be able to request a history of complaints against that agent.

In California, a former licensed Realtor who fraudulently rented out foreclosed homes at least 13 times had a business office and official-looking materials, but a quick records check would have revealed that he had lost his real-estate license in 1979 for fraudulent business practices.

“With the speed and the information on the Internet today, there’s no reason that you should be taken advantage of,” Thompson said. “I’d say that within five or 10 minutes you can check that they are who they say they are.”

9. Check: Is there a similar listing for the same address at a higher price?

In many cases, scam artists hijack rental listings posted by legitimate agents and owners. Sometimes they change the language a little, sometimes not. But there are ways to check.

Professional property managers will typically list a property on multiple sites, including their own Web site and fee listing services (see No. 2 for samples). Type the address of the rental property into those sites. Does the same listing emerge, or one that’s eerily similar except for the contact person’s name and number? Is the price significantly higher on the professional sites? These are dead-on signs that the free listing you happened upon is a hijacked fake.

Or, simply type key words about the property into Craigslist. Did a similar property description emerge but listed at, say, $1,500 instead of $800, and have different contact information? Again, the lower-priced ad is likely a fake.

10. Make sure the property is not in foreclosure

So the owner checks out, but what about the property? Unfortunately, desperate times sometimes drive otherwise law-abiding people to desperate acts, and panicked owners have recently been hiding their home’s impending foreclosure status from tenants and pocketing the cash. Tenants might have no inkling that the rent checks haven’t been going toward the house until the sheriff arrives to kick everybody out.

This, too, can be prevented. Check the county recorder’s office in your area for the most up-to-date public information about the property’s status. You can also type in the address at a free site such as RentalForeclosure.com, which is set up for this purpose.

Unfortunately, there can be a delay of several months before foreclosure information is posted at a county clerk’s office, Thompson said. And a mortgage company won’t release a customer’s personal financial information to a third party. In those cases, the only protection for tenants may be new laws that require tenants to have at least 90 days’ notice before an eviction.

Note: Report any suspected fraudulent activity

If you think you’ve run into a scam artist, give the details to your local police department and report it to the FTC. The information may help police catch the criminal and help the FTC educate other consumers, which is ultimately the best way to prevent such crimes.

Also, flag suspicious listings on Craigslist and staff will quickly remove the post. (For more, see Craigslist’s information about scams.)

Spring 2009 Sunrise Multifamily Rental Market Report Finds Northeast  Average Rental Rates Tracking National Economic Trends

Albany, NY – June 26, 2009

The Spring 2009 Sunrise Multifamily Rental Market Report ©

released today by Sunrise Management & Consulting, reports that, like the national economic

trends, the northeast multifamily markets show modest average rental rate growth in some areas

and decreasing rates in other more populated markets.  Markets where housing values increased

the most and had correlating development of housing overstock are seeing the greatest impact

from the current recession.

The older markets in the New York Region, which had not seen the highs in housing values,

continue to grow.  The more populated markets in New Hampshire, Rhode Island, Massachusetts

and the metropolitan region of Connecticut, which did see the highs in property values, have all

had decreases in average rental rates in the current survey, falling to below or at early 2008 rates.

The metropolitan Western Region of Connecticut had a substantial decrease of $74 in average

rental rates.

The Spring 2009 Multifamily Market Report finds:

• Modest growth in average rent and average rent per square foot for all of the New York

markets surveyed, led by the Hudson Valley and the North Country Regions with

increases of $18 in average rental rates;

• Substantial decrease in Western Connecticut (Fairfield CO.), the most expensive market

covered by this report, where the average rental rate fell by $74 to $1464, a level not seen

since the Q1 2007 survey;

• Decreases in average rental rates in Rhode Island (-$19), New Hampshire (-$8) and both

regions of Massachusetts, falling back to or below early 2008 rates;

• Modest to no growth in all other New England markets except Vermont where average

rental rates grew by $13.

“We are finding that markets that did not have the highs in values and housing overstock are

avoiding the lows seen in other markets.” said Jesse Holland, president of Sunrise Management

& Consulting, “Markets with large declines in average rental rates raise a concern for the

markets ability carry the mortgage debt load acquired during market peak values.”

The Sunrise Multifamily Rental Market Report includes the entire Northeast except New York

City.  The states surveyed and reported on include Connecticut, Maine, Massachusetts, New

Hampshire, New York, Rhode Island and Vermont.  The research team at Sunrise &

Management & Consulting compiled the information by surveying nearly 1950 apartment

communities, representing 340,000 apartment units, and extensively updated the survey

database.

The Sunrise biannual survey of rental conditions in the multifamily housing segment details

average asking rents by unit mix and by square footage, and tracks historical trends on a county,

regional and state basis. A regional summary report is available free of charge, at

www.sunrisemc.com.  Sunrise Management & Consulting will prepare customized reports to

meet any user’s specific needs.  Information on customized reports can be obtained by contacting

Sunrise at  518-782-0200 .

The Sunrise Multifamily Database has led to the development of The Property Gauge™, a

scoring and assessment process to identify risk in multifamily lending.  Information about the

process can be obtained at www.thepropertygauge.com.

Headquartered in Albany, NY, Sunrise Management & Consulting AMO is an innovative third

party property management company providing property management services, market research,

and consulting to property owners, investors and home owner associations throughout the

Northeastern United States. For information about Sunrise find us at www.sunrisemc.com.

April 1, 2009

Latham, New York –

Sunrise Management and Consulting, has announced the appointment of the following employee to the Sunrise team

Laura Gouveia- has joined Sunrise Management and Consulting at corporate headquarters in Latham as Accounting & Payroll Administrator.  Laura has over 25 years accounting and payroll experience.
Laura can be reached at our Corporate Office at extension 310 and by email at lgouveia@sunrisemc.com

Sunrise Management and Consulting, (SMAC), headquartered in Latham, NY, is a regional third-party property management company that provides property analysis, training and management solutions to the multifamily housing market. SMAC is affiliated with the Howard Group/TCN Worldwide.  For information, call (518) 782-0200 or visit our website at:  HYPERLINK http://www.sunrisemc.com www.sunrisemc.com

Fall 2008 Sunrise Multifamily Rental Market Report Finds Growth in Average Rental Rates Despite Slowing Economy

Albany, NY – November 20, 2008 – The Fall 2008 Sunrise Multifamily Rental Market Report © released today by Sunrise Management & Consulting reports modest growth in average rental rates throughout the Northeast markets surveyed.  Rate increases were recorded in most of New York, and in all of Massachusetts, New Hampshire, Maine and Vermont.  Rhode Island and Western Connecticut reversed earlier flat growth with reported increases.

The Fall 2008 Report finds:

•    Most New York Markets reported average rental rate increases, led by the Northern Region (Plattsburgh) with a $18 average rate increase.
•    Only New York’s Hudson Valley (-$4) and Southern (-$7) regions posted decreases in average rental rates.
•    Modest growth in average rents in all of Massachusetts, New Hampshire, Connecticut, Maine and Vermont.
•    Rhode Island reversed a year long downward trend with a $21 increase in average rental rates

“Dropping home values, a slowing economy and foreclosures are increasing demand for rental units.” said Jesse Holland, president of Sunrise Management & Consulting, “With vacancy rates decreasing nationally, the only housing group not facing an oversupply of inventory is the Multi-Family segment.”

The Sunrise Multifamily Rental Market Report includes the entire Northeast except New York City.  The states surveyed and reported on include Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.  The research team at Sunrise & Management & Consulting compiled the information by surveying almost 1950 apartment communities, representing 340,000 apartment units, and extensively updated the survey database.

The Sunrise biannual survey of rental conditions in the multifamily housing segment details average asking rents by unit mix and by square footage, and tracks historical trends on a county, regional and state basis. A regional summary report is available free of charge, at www.sunrisemc.com.  Sunrise Management & Consulting will prepare customized reports to meet any user’s specific needs.  Information on customized reports can be obtained by contacting Sunrise at 518-782-0200.

Headquartered in Albany, NY, Sunrise Management & Consulting AMO is an innovative third party property management company providing property management services, market research, and consulting to property owners, investors and home owner associations throughout the Northeastern United States. Sunrise is the creator of the Property Coach™ system for maximizing property investments. For information about Sunrise find us at www.sunrisemc.com

Spring 2008 Sunrise Multifamily Rental Market Report Finds Average Rental Rates Rising Across Northeast Markets

Albany, NY – June 20, 2008 – The Spring 2008 Sunrise Multifamily Rental Market Report © released today by Sunrise Management & Consulting, reports average rental rates rising in most of the markets surveyed.  Rate increases were recorded in all the New York, Massachusetts, New Hampshire, Maine and Vermont markets.  Only Rhode Island and Western Connecticut, regions with existing high housing costs, reported flat growth.

The Spring 2008 Report finds:
·        All the New York Markets reported average rental rate increases, led by the Southern Region (L.I., Westchester) with a $37 average rate increase, and the Capital Region (Albany) with a $26 increase.

·        New York’s Hudson Valley ($25) and Southern Tier ($24) regions posted strong growth.

·        Growth in average rent and average rent per square foot in all of Massachusetts, New Hampshire, Maine and Vermont.

·        Connecticut’s Eastern Region (New Hartford) posted growth with an $19 increase while the Western Region (Stamford, New Haven) had a slight decrease (-$8) in average rental rates.

·        Growth in Rhode Island relatively flat with a $4 increase in average rental rates

“The housing slump and tightening credit standards are increasing demand in the multifamily rental markets.” said Jesse Holland, president of Sunrise Management & Consulting, “The segment of the market that would normally be moving from rental apartment living to single family home ownership is finding itself stuck by higher lending standards requiring larger cash down payments.”
The Sunrise Multifamily Rental Market Report includes the entire Northeast except New York City.  The states surveyed and reported on include Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.  The research team at Sunrise & Management & Consulting compiled the information by surveying almost 1900 apartment communities, representing 330,000 apartment units, and extensively updated the survey database.
The Sunrise biannual survey of rental conditions in the multifamily housing segment details average asking rents by unit mix and by square footage, and tracks historical trends on a county, regional and state basis. A regional summary report is available free of charge, at www.sunrisemc.com.  Sunrise Management & Consulting will prepare customized reports to meet any user’s specific needs.  Information on customized reports can be obtained by contacting Sunrise at 518-782-0200.
Headquartered in Albany, NY, Sunrise Management & Consulting AMO is an innovative third party property management company providing property management services, market research, and consulting to property owners, investors and home owner associations throughout the Northeastern United States. For information about Sunrise find us at www.sunrisemc.com