COVER STORY, AUGUST 2007

MULTIFAMILY MANAGEMENT
Giving residents their proper respect and properties their proper fit.
Steve Donohue

Donahue

With occupancy averaging in the mid-90-percent range and rent growth stabilizing at 3 to 5 percent, the demand for multifamily properties remains strong throughout the West. The recent ebbs and flows of the housing market have drawn many would-be homebuyers to the leasing market. This trend has created a diverse profile of renters, many of which have more discretionary income and bring a number of new demands to the leasing table.

As a result, property managers throughout the West are aggressively evaluating their assets in order to determine which specific amenities, add-ons, rehabs and new services will enable them to continue to tap the steady demand throughout the region. While a wealth of options exist, determining which factors will appease current tenants, attract new tenants and command rent growth can be a complex process. However, evaluating the following areas is a good place to start.

Market Knowledge

While some renters are willing to bypass communities with higher rents and more amenities for a reasonably priced apartment that meets their everyday needs, others place value in a well-located community providing access to nearby shopping, dining and entertainment. For property managers, the key is gathering the necessary market knowledge to determine which of these factors the immediate population will find most valuable, while simultaneously evaluating growth factors that may play a key role in demand in the years ahead.

Due diligence remains the central aspect in determining what factors will provide the highest value to residents, but will still enable the community to remain profitable. The property manager must evaluate trends such as job growth, home prices and affordability, mortgage rate forecasts, and current and historical rent growth data. Many firms will also hire consultants to evaluate property-specific data and make recommendations regarding upgrades, rent increases and marketing strategies.

Technology

With Generation Y playing an increasingly influential role in the multifamily industry, technology has emerged as one of the key demands among new residents. This generation of tech-savvy residents views technology-friendly amenities as a key point of difference when looking for a place to call home.

As a response to this demand, many communities are evaluating a technology that enables residents to pay rent, request work orders and communicate with on-site management from their home computer. This service, also called the Resident Portal, is expected to become a much more regular occurrence, particularly in larger Class A and B communities.

Meanwhile, the addition of WiFi capabilities throughout the community provides residents with the freedom to log on to the Internet wirelessly from anywhere in the community. With the cost of retrofitting a community with wireless access becoming more manageable, a growing number of property managers are offering this service as an add-on feature.

Consistent Service

While the demands of tenants for new amenities and on-site services will always remain in flux, the importance of quality service will never change. Residents do not want to agonize over whether or not everyday repairs, future upgrades or parking problems will be addressed. Furthermore, face-to-face interaction and strong communication skills are critical even during a time when the Internet is playing a larger role in the daily functions of property managers.

Unfortunately, property management companies are currently challenged with finding quality, on-site personnel to deliver this service. In order to ensure that communities are properly staffed to both retain and attract residents, property management firms must place a higher emphasis on both proactive recruiting practices and employee retention programs.

While a growing number of communities continue to implement programs that boost convenience and lower over-head costs, the importance of personal service continues to serve as the lifeblood of a successful community.

Steve Donohue is president of Irvine, California-based Western National Property Management.


©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.