Property Performance Management

1. National Apartment Association Education Institute Certified Apartment Property Supervisor Property Performance Management

2. Restrooms Breaks Lunch Cellular Phones Smoking Housekeeping

3. Introductions • Name • Company • Number of Units • How Many Years In the Business • What is your idea of a property that is performing well?

4. Participate fully. Help us stay on track. Be on time Ask questions Offer ideas and opinions as perceptions Have fun. Ground Rules

5. Understanding the Management Agreement Measuring Occupancy Improving Resident Satisfaction Maintaining the Property Writing an Owners Report Performance Tools Learning Outcomes: Property Performance Management

6. 2. Understanding the Management Agreement

7. The management agreement is the contract between the owner and the managing agent. It explains what you need to know, do, or expect in your relationship with the property owner, and vice versa. Understanding the Management Agreement

8. Property Ownership • Agreement terms • Reviewed by counsel for both entities before signed • Establishes an agency relationship - the management agent has the authority to act on behalf of the owner • Management agreements will be different between: • related ownership and management entities • third-party fee management agreements between an owner and a non-related management entity Management Agreements

9. Key Parts of the Management Agreement(See Sample management Agreement)

10. Key Parts of the Management Agreement(See Sample management Agreement)

11. Key Parts of the Management Agreement(See Sample management Agreement)

12. Key Parts of the Management Agreement(See Sample management Agreement)

13. Key Parts of the Management Agreement(See Sample management Agreement)

14. 3. Measuring Occupancy

15. Provide statistical bases to analyze and take action in cases of declining occupancy and increased exposure • Identify resident move-out trends • Pinpoint training opportunities for your staff • Highlight problems in revenue collection and accounts receivable processes • Support effective marketing and advertising strategies Occupancy measurement tools

16. Payments, and miscellaneous fees • Occupied unit statistics – rents, concessions • Move-in, move-out, and renewal activity • Residents’ reasons for vacate • Vacant units and vacant units leased • Notice to vacate/leased notice to vacate • Exposure percentage • Resident demographic data Occupancy Reports Include

17. Activity Summary Report • Unit Status Summary • Rent Roll • Delinquency Report • Collection Summary Analysis • Occupancy Status Report • Occupancy Analysis Variance Report (Samples Included in the Supplement Package) SAMPLE Occupancy reports

18. Activity: Occupancy Reports

19. Key Performance Indicators

20. Getting potential residents to view the property, is the first step to meeting occupancy goals. Traffic is about getting new people through the door. Without traffic, the property won’t have prospective residents to fill the vacancies created by current residents who move. Traffic Measurements

21. Ask questions about • How many prospects visited the property • Where the prospects came from • Resident and prospect profile • Complete product readiness • Staff readiness • Historical and seasonal performance • Portfolio or ownership changes Improving Traffic counts

22. Activity Summary Report • Summarizes all movement in unit status – vacants, leases, move outs • Summarizes all traffic sources, visits, returns • Marketing Recap Report • Summarizes prior period traffic from all sources • Notes marketing campaign results REVIEW SUPPLEMENTAL REPORTS

23. Concessions may be useful to compete with competition • Concessions are not for: • A leasing issue • A service issue • A traffic issue • A product issue • It’s important to know the difference between effective rent and market rent. Rents and Concessions measurements

24. Your “exposure” is the percentage of units remaining to lease, expressed as a percentage. Consider this portfolio: • 2784 total units • There are 189 units vacant, 34 units that have given notice to vacate that have not yet been leased to new residents, and 19 notice units that have been leased • 2784 units – 189 vacant - 34 un-leased notice units = 2561 + 19 leased notice units= 2580/2784 • Your portfolio exposure is 7%, or 92.7% leased What is Exposure?

25. Resident applications must be processed in a timely and consistent manner. • Resident screening software programs can determine within minutes whether an application is approved or denied. • Screening software uses approval parameters to score applications as approve, approve with conditions, or deny applications. • Each property’s resident screening standards are being applied to all applicants. Applicant Processing Standards

26. It’s important for resident move-ins to go smoothly. If a move-in gets started on the wrong foot—the apartment isn’t ready, for example—it can take a long time and a lot of effort to rebuild the resident’s faith in the property and its management. Move-In Measurements

27. Payment and deposit of rent and fees are part of the almost daily tasks of property management. If a property isn’t collecting rents and fees on time, the property is losing revenue. Transaction measurements can tell you if your property is missing revenue opportunities. Electronic programs are speeding the process Transaction measurements

28. Timing of lease renewal letters Type of contact Quantity of leases expiring Lease terms Budget increase objectives Current market conditions Lease Renewal Measurements

29. Another way to manage occupancy is to control lease expiration dates. Not every lease must be for 12 months. Consider using some or all of the following: • Staggered monthly expiration dates • Staggered expiration days • Variable Pricing • Automated Revenue Management Lease Expiration Management

30. Monitor the timely processing of eviction actions at your properties. • The number of eviction actions each month • What notification, if any, is given to residents who are late • How many eviction actions commenced on the date as required by company policy • Examine any eviction actions that did not commence on the appropriate date. Eviction Policy Compliance

31. Activity: Property Performance Benchmarks

32. 4. Improving Resident Satisfaction

33. Focusing on resident satisfaction is the key to retaining residents and raising NOI. • Turning a vacated apartment costs $3000 or more due to the cost of leasing, maintenance, and lost revenue. • Most turnover is preventable (aside from home buying and relocation) • Reducing turnover can save your company thousands of dollars a year. Retaining Residents

34. Four Steps to Improving Retention

35. Not all residents want or need the same thing. It’s not enough to meet resident expectations – you must exceed them. Know Residents and Understand Their Expectations

36. Service standards take resident feedback and put it into meaningful action. • Develop standards that teams can easily understand • Compare to results at other properties, companies, and the property’s own past performance. • Standards should include: • Leasing • Management • Maintenance Service Standards

37. It is important that resident surveys are: • Easy to respond to • Comprehensive • Multi-level • Detailed enough to give you a specific action plan • Include information that you are willing to take action to rectify • Do not ask questions that are beyond your control to rectify Resident Surveys

38. Emphasize to staff that they are there to serve the residents. Encourage the manager to lead by example. Recognize and reward team service Highlight resident service at every opportunity. Higher levels of resident satisfaction bring rewards! Promote a Service Oriented Environment

39. The most effective property managers anticipate their residents’ needs. Build your service around your resident trends and the demographics of the property. Keep staffs tuned in to the residents. Anticipate Resident Needs

40. True success only comes when the company makes resident service the top priority. The team should work constantly to come up with new ways to improve service. Superior maintenance service is probably the most important aspect of resident retention. Make Service a CORE Company Value

41. 5. Maintaining the Property

42. An effective maintenance program throughout all properties managed is essential. A thorough maintenance program controls/reduces costs, extends the life of the property and its equipment, reduces risk and liability concerns, and reduces turnover. Maintaining the Property

43. Property Inspections Help You:

44. Prepare inspection checklists • Maintenance supervisor and/or maintenance technician(s) conduct the actual inspection • Confirm the importance of the preventive maintenance program to community managers and maintenance teams • Require a written report after each inspection • Review these reports with community managers to determine what follow-up is required • “Inspect what you expect” Preventative maintenance ProCESS

45. Work Order Completion Rate Set Goals (all work orders complete within 24 hours) Provide Continuous Training Prompt and Complete Make Readies Inventory Management and Cost Controls Reduction in Callbacks Measuring Maintenance Success

46. 6. Creating an Owners Report

47. The Owner’s Report explains how a property has performed for the previous month, quarter, or year. The report includes key financial and operational reports, as well as a formal narrative. What is An Owner’s Report

48. Owner’s Report

49. 7. Additional Performance Tools

50. Apartment owners and managers continue to automate and integrate almost every process of the apartment management business with technology. These systems create efficiencies that benefit the renter, the property’s NOI, and the owner’s investment goals. Additional Performance Tools