Whether 2012 keeps its mojo or loses its heat, these five tactics will be your key to beating the market.

Demand may dwarf supply; the economy may show signs of life; holders of cash may be falling all over themselves to invest it in new and improved multifamily communities; homeownership may even lose its dominance as the American Dream incarnate. Still, as any smart property manager can tell you, a good year is made, not born.

Like early 2011, this year’s onset has shaped up like gangbusters—fundamentals, sentiment, and economic drivers are kicking in nicely. However, also like last year, property managers are going to have to navigate some tricky, possibly treacherous, waters to bring in the payload owners and stakeholders expect.

Caution? Last year, the pros called for average rent growth of more than 4 percent nationwide. Properties here and there achieved that kind of growth. Most didn’t. Overall effective rents grew by an average of just 2.3 percent last year.
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What’s more, the gremlins that bedeviled 2011 haven’t gone anywhere. Economists still worry about a debt crisis in Europe and conflict in the Middle East. Politicians fight in Washington—and it’s an election year. What if the “recovery” this year turns out to be as mediocre as last year?

Some property managers succeeded in last year’s up-and-down environment, plodding along in the toughest real estate markets and winning strong rent growth in the nation’s growing number of solid markets. Many interviewed for this story saw average rents grow by 4 percent or more throughout their portfolios. Here are five critical tactics that helped the winners overcome market obstacles, and what other managers and owners should do to optimize their property out-performance in 2012.

Power Up Your Rents
The decision to raise rents can be fraught with worry—especially in tough economic times. Residents can always look for other options, resulting in more empty apartments. But computerized revenue management systems  Lease Rent Options are helping to dispel the anxiety. The programs, designed to help property managers set rents, employ industry-standard variables such as vacancy rates to help make the rent decision.

This year, in most markets, low vacancy numbers will lead landlords and their revenue management systems to push rents, despite the cloudy economy, with a promising fourth quarter 2011 revealing that the average apartment vacancy rate nationwide had fallen to 5.2 percent. That’s the lowest it’s been since 2001.

And it’s not just a majority of markets that improved. Every apartment market tracked had fewer vacant apartments and higher average rents over the year ending in the fourth quarter of 2011.
With trends like this, managers can trade slightly higher vacancies for higher rents—and still improve revenue overall.

Go Young
Experts say roughly a million young people graduate from college every year, and these ex-students are doing surprisingly well despite the tough times: The unemployment rate for college-educated people in their mid- to late 20s is now less than 5 percent. It’s become a cliché that walkable urban neighborhoods are more likely than nonurban properties to appeal to these young renters, who are increasingly dominating the rental market. After all, it’s easier to rent an apartment that’s within walking distance of amenities—say, a good cup of coffee.

To attract the Facebook generation, property managers are also focused on social media. TMG maintains a Facebook page in part to create opportunities for residents to make connections. And all the property managers we spoke to monitor any mentions of their communities on websites from Google to Twitter, acting quickly to fix any service problems the sites bring to their attention.

Sell the Service
Property managers succeed, even in the toughest apartment markets, in part by focusing on service.
We try to attract the best tenant we can. That means, in addition to following strict qualifying criteria, maintaining lots of interaction with residents, to continually gauge their needs while building a reputation as a customer-oriented management firm.

Up the Ante
Many landlords are raising rents based on upgrades to their properties—often beginning with highly visible work on the common areas.

The number of new apartments opening will rise in 2012, and rise higher in 2013. Certainly, the number can’t get much lower. Only 37,678 new apartment units came on line nationwide in 2011, the lowest annual figure for new completions in 31 years. Still, new construction is returning, starting with the healthiest apartment markets, and managers of existing apartment communities will have to compete.

Post by Joanne Vanderhoef
Marketing and Media Specialist

The Management Group
Property and HOA Management in Vancouver WA and Portland OR
http://www.TMGnorthwest.com

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HOA's Responsibilities

Organization
HOAs may have a board of directors. The directors often have the power to appoint officers. If the board appoints a member of the board as an officer managing the day-to-day work of the HOA, conflicts can arise. Homeowners may have little recourse if an officer of the HOA, who also serves on the board, is at the center of their dispute. Bylaws should be specific regarding the appeals process in these cases in outlining the responsibility of the board when one of its members also serves as an officer. 

 

Significance
HOAs provide rules and regulations related to the maintenance of a property. HOA bylaws can be very stringent including minimum square footage for a home and the acceptable colors to paint a home. They also provide an appeals process for neighbors who have small disputes about their property.

State laws that govern HOAs vary from state to state. The responsibilities of an HOA in one state may be more stringent than in other states. Florida, for example, requires all HOAs to be incorporated. Arizona requires HOAs to provide financial oversight of its records. The laws governing HOAs have strong lobbyists in state legislatures on both the homeowner and real estate management sides.

Functions
HOAs develop budgets for subdivisions. They plan projects for renovation and maintenance. HOAs also oversee the work of property managers. Communication with homeowners via HOA officers occurs at regularly scheduled intervals. HOAs also may require fees for membership from homeowners. This has often led to criticism by some that in addition to property taxes, homeowners are taxed indirectly by their HOA.

Diligence
New homeowners should obtain copies of covenants and bylaws for their HOA. Read the bylaws thoroughly and ask questions about areas that are confusing. It is also key to under the homeowner's state laws governing HOAs. Understanding bylaws and state laws governing an HOA will prevent misunderstandings about HOA responsibilities for the homeowner.

The Management Group
Property Management, HOA Management
Vancouver, WA
Portland, OR

What Makes a Good Board?

In my many years of community association management, I have worked with numerous wonderful boards. And these same boards were the leaders in the most successful associations I ever managed. Their backgrounds were varied, and they all were interested in the success of their association. When I think back to what made them that successful, several things come to mind.

Spirited discussions were always welcomed and appreciated. The board members voiced their opinions but were never rude or disrespectful to each other. There was no yelling, and they allowed each other to speak without being interrupted. Humor was always a part of any meeting. A self-serving interest concerning any topic was not tolerated.

When a vote was needed, it did not have to be unanimous. The president allowed just enough time for discussion and then called for the vote. The board members in the minority vote were not angry, and they supported the decision of the entire board. They did not leave the meeting and then bad mouth the other board members to the homeowners about a decision they did not like.

Meetings were two hours or less. They started and ended on time. Agendas were timed, so that everyone knew the approximate length of the discussion before the vote was taken. The agenda was followed and digression did not take place. After the president called the meeting to order, the next item of business was called “Set the Agenda.” Board members were allowed to add additional agenda items for discussion purposes only. And it was rare when agenda items were tabled. The boards realized that they had to make hard decisions, and delaying the vote did not accomplish anything other than to upset owners.

The board members read their board packages prior to the meetings and did not walk into the room while they were opening up their envelopes. These same boards heeded the advice of the professionals. They listened to what I recommended as their manager. They respected the legal opinion provided by their attorney and the financial advice from their staff accountant and auditor. And, vendors were brought into meetings to discuss projects and contracts. The board members were successful in their own businesses, but realized that they were not the “professionals” in the community association world.
All in all, I have beenvery lucky in regard to the wonderful boards I had the pleasure of working with in my career. And I believe they all shared the same traits described above, which  are the same characteristics to which all board members should aspire.

Provided by AssociationTimes.

HOA Maintenance Projects: Determining the Need

Becoming a homeowner means that in addition to your career and family you are essentially taking on another lifelong project: the upkeep of your property.

Whether you are adept at DIY projects or have a handyman on speed dial, the average wear and tear on any type of home is going to require the occasional repair and maintenance.

As a HOA board member that responsibility will now fall on your shoulders to develop a comprehensive plan for your entire complex compound. This maintenance plan covers issues like gardening, minor fixture replacements and general upkeep, and is executed based on a Reserve Study that allocates the proper funding for necessary projects both large and small.

What is a Reserve Project?

Among the many stacks of paperwork you'll receive as a new condominium owner will be the Covenants, Conditions and Restrictions otherwise known as the CC&Rs. Typically, most new owners will engage in a cursory review of the CC&Rs to find out about restrictions that would have an immediate impact on their lives such as pet ownership or whether a washer/dryer can be brought into or unit.

As a member of an HOA board you will have to become a lot more familiar with all aspects of the CC&Rs in order for you to facilitate what is required of the HOA, especially when it comes to handling HOA maintenance projects.

The community association fees that go into a reserve fund are used for regular maintenance issues, which can range from replacing light bulbs to re-paving the entire community. These items are expenditures that are budgeted for, and separate from a Capital Improvement Project (CIP), which requires additional funding and could be something such as installing a pool at a community that does not have one. CIP’s are usually to fulfill a want, not a need, and are not exeuted nearly as commonly as a maintenance project using a reserve fund budget.

One note of caution: If aboard is constantly asking for additional assessments for HOA maintenance projects, they're probably doing an inadequate job of fund management. While unforeseen circumstances are unavoidable, associations who’ve retained professional management services have significantly decreased the threat of a special assessment.

Community association management professionals understand the importance of being proactive, maintaining an effective Reserve Study, funding reserves properly and developing a Maintenance Plan.

Voting for HOA Maintenance Projects

Because most CIPs require an additional assessment and budget, there will be a need for the HOA board members to vote on that issue. But for maintenance requirements already covered in an existing maintenance plan, they are already budgeted for and a board does not have to administer a vote.  In other cases, there might be the need for upgrades that are required by federal or state regulations. This could be items such as handicap access or new railing height requirements.

When the issue is one of compliance versus a fine then no vote is required; the project simply needs to move forward.

Courtesy HOA Managment