Multi-Housing News - August 2009 - (Page 42)

perspective Standardized Leasing Practices Realize benefits in a down market cycle and capitalize on future upswings By Richard Schreiber, SureDeposit and Dennis Smillie, Multifamily Solutions, Inc. residents receive no response or are answered too When the apartment industry is healthy, owners late. Onsite staffing levels are lean and stretched by and property management firms invest in property competing priorities. By gaining visibility to all management software. Today, with “same store” unique rental inquiries and standardizing your folrental applications down 7.4 percent year over year, low up with the help of call centers and lead manthe industry is more focused on maintaining occuagement software, you pancies as a matter of preservcan capture every lead ing property valuations than and ensure prospects on disciplined processes and Many owners are renting receive follow up. This back-office efficiency. can help you maximize Faced with this pressure to their units at steep reduced traffic flow maintain occupancy and NOI discounts and incurring and close more leases. performance, owners now mounting bad debt in • Identify The have to choose between takBest Applicants: By ing on more renter performthe process. using the proper tools ance risk by offering larger such as lead manageconcessions to applicants or ment software, online keeping rents/concessions at leasing programs and statistically based screening, existing levels and risk losing prospects to another you can harvest the best quality renters from a largproperty down the street. As a result, many owners er pool of applicants even when the overall quality are renting their units at steep discounts and incurof residents is down as a result of the recession. ring mounting bad debt in the process. • Set Effective Pricing: Setting your price Now is the time for owners and property manshould never be guesswork. Yield management softagers to standardize their leasing processes while ware and market performance benchmarking tools increasing their focus on maintaining good renter offer better visibility into your market and access to credit quality and pricing practices. Standardized actual competitive data and market analytics leasing practices offer a number of benefits: around traffic, pricing and renter quality. Relying on • Maintain Fair Credit and Fair Housing these kinds of tools provides real-world insight into Standards: Consider the credit card industry how your market is pricing its product so that you which relies solely on information provided in an can make better informed decisions about rental application and sophisticated statistical modeling rates at your community. Just as importantly, adherand scoring tools to make decisions about whether ing to those pricing decisions allows you to remain to decline or accept an applicant and to determine competitive without compromising your NOI goals. how much credit to extend to accepted applicants. • Mitigate Your Renter Performance Risk: Today’s poor labor market has impacted so many While bad debt is a cost of business that cannot be applicants’ financial pictures that compromised eliminated, establishing a standardized security credit histories are now commonplace. Sophisticatdeposit approach and adjusting your rules governing ed applicant scoring tools are available for use in deposits based on an applicant’s risk profile can the multifamily environment and standardize the effectively mitigate your exposure. With the help of approach to assessing applicant risk. Similarly, a sophisticated resident screening programs that can standardized leasing approach can help your onsite assign levels of performance risk, your leasing agents team make sound, objective business decisions will automatically know what security deposit level based on a consistent set of risk standards. to require from A-credit residents versus B- and C• Maximize Traffic Volume: Studies show that credit residents. 50 percent of all email inquiries from prospective The same would be true if you were to offer a security deposit alternative in the form of a surety bond in conjunction with the resident screening program. A standardized approach to offering security deposits and security deposit alternatives relative to applicant performance risk provides a level of coverage superior to offering a much-reduced security deposit as a rental concession. You can significantly and directly reduce the amount of your bad debt exposure, which will help improve your communities’ NOI. The lower-cost surety bond option is more attractive to renters and property operators in these challenging times because it lowers the cost of moving in. • Align Business Objectives: Management level and community-level teams will be better positioned to work toward the same goals, with greater clarity on how to get there. The number one objective today has to be the preservation of property valuation, or at a minimum, the deceleration of the drop in property valuation. With valuations projected to drop by as much as 30 percent by this time next year, management and onsite leasing staffs need to work together to protect their NOI to safeguard their property’s valuation. • Leverage Best practices: Successful businesses work to uniformly identify, adopt and adhere to best practices in order to achieve maximum operational, financial and risk management efficiencies. A standardized approach to leasing workflow processes is a good best practice to work towards, and given the marketplace conditions, a best practice that will generate both short- and long-term returns on investment. MHN Richard Schreiber is President, SureDeposit and Dennis Smillie is President, Multifamily Solutions, Inc. “ ” MHN ONLINE Read “Automating Multifamily Building Management,” by David Demarest at www.multi-housingnews.com/BIM 42 August 2009 | Multi-Housing News http://www.multi-housingnews.com/BIM

Table of Contents for the Digital Edition of Multi-Housing News - August 2009

Multi-Housing News - August 2009
Contents
From the Editor
Executive Insight: David Hendrickson, JLL
Market Pulse
Operations
Finance: Green Lenders
Property Management: Mentoring
Development & Design: Green
Profile: AMLI
Market Report: Florida
Kitchen & Bath: Saving Water
Products: Paints & Finishes
Technology: Resident Screening
Perspective: Leasing Practices

Multi-Housing News - August 2009