Remember getting letters? In the mail? You might, but there is a growing percentage of our readers who do not. And there are whole swaths of our society made up of adults who have never mailed a bill in their lives. But old habits die hard, and despite the normalization of online interactions, many multifamily properties still collect the majority of rent via paper checks. You may still be taking most resident maintenance requests by phone. Maybe you still tape notices to unit doors.
But you don’t have to. The team at Entrata has made simplifying your transition to online resident interactions one of our top priorities. Because, let’s face it, collecting rent online, digitizing work orders, and generally moving towards paperless systems isn’t just more convenient for your residents, it has the potential to save you lots of time and money. continue
Learning what residents really want and expect from their property management company can help multifamily marketers enhance their reputation management and social media strategies. So we asked them. In a national survey that covered 38 states and over 2,000 residents, we researched their perceptions and preferences regarding property reviews and social media interactions. continue
By: Kate Hampton, VP of ResidentPay
How to pick the right one and how to make sure your investment will be worth it
You’ve had a resident portal forever, but now you’re starting to think that it may not be enough any more. You feel the need to adapt more to your residents’ preferences. The new Renter Preferences Study published by Kingsley Associates and NMHC fully validates your instinct; the study says you should be mobile friendly to remain relevant in the long term (something that, by this point, we should all know). It all makes sense, after all. The majority of your residents are under 45 years old and pretty much all of them own smartphones. Your decision to augment your portals with a mobile app is fact-based and objective. In short, it is a good decision. But, how do you pick the right one and make sure your investment is worth it?
Hard work is not a virtue
People use apps to do things. They call an Uber, order a pizza, or message their friends. Your residents want to pay their rent, submit a maintenance order, and be notified of events important to them, whether it be a package delivery, a water shut off window, or a pool party. Your residents are busy people, so they want to do what they need fast. Pay attention to how many steps it takes the resident to accomplish common tasks. Smartphones these days have impressive processing power and innovative operating systems…the device should do most of the heavy lifting, not the user. If the app is poorly laid out, the resident will not have the patience to locate the right screens or buttons. They will exit the app and most likely delete it from their phone altogether. A good app anticipates what the user is there to do and what is important to them, then leads them right to it.
Just an app is no longer enough
Everybody seems to have an app. As of July 2015, there were 1.6 million apps in the Google Play Store and 1.5 million apps in the Apple App Store. The proliferation of the mobile ecosystem results in users downloading more and more apps to their devices. Yahoo reports that Android users have an average of 95 apps installed on their phones. That’s a lot of apps! So how do people actually use them without wasting a lifetime trying to find what they need? They change the way they interact with their phones! The best apps out there blur the lines between the device’s operating system and the app itself. If the app is built well, notifications will be integrated into the Notification Center. Users then don’t have to open the app to see they may have missed something important like, for instance, paying their rent. On an iPhone, all they have to do is swipe down to see all their notifications in one place. Many good apps will also support taking actions, such as launching a payment screen directly from the notification through the use of deep linking. Deep linking allows the device to skip the irrelevant home screen of the app and takes the user directly to the screen they are actually going to use. This can be either a payment screen if the notification reminded them to pay rent, or maintenance order detail page if the app notified them their leaky faucet was fixed. More innovative apps will use deep linking even beyond notifications, like in the device’s search module. Remember, the less tapping the resident has to do, the better their experience.
Play your own game
Lastly, the way to win is to play your own game. The reality is, if residents want to order pizza, they open the Pizza Hut app. If they want social, they go to Facebook. Don’t clutter your app with various “value-adds.” The trend is proving to be going the opposite direction. Apps are becoming simpler and laser focused on their core functionality. Facebook removed the Messenger feature from their core app into its own Messenger app. The Google Maps app detached the Street View feature to form a new Street View app. The only thing you can do with the Uber app is to order a car and pay for the service. The big players are paring down to the core functions, so they can create a user experience that’s well aligned with user preferences and behavior. They want to make sure their app’s purpose is very clear and unmistakable. This is harder than it sounds. But, first, you have to be clear on what your residents really need, want, and expect to do with your app. Then find, or build, an app that not only focuses on those things, but also does them exceptionally well. Nothing more, and nothing less. Play your own game, and play it well.
A lot of this has been done with our new ResidentPortal app, providing your residents with the sleek and easy-to-use mobility they’ll appreciate. It’s the app you deserve.
Want to Lower Your Recruiting Costs? Hire for Fit over Skill
Hiring employees is expensive. In addition to recruiting costs, there are other soft costs such as lost productivity and potential customer dissatisfaction. And let’s not forget the time drain for the hiring manager to review resumes, interview candidates and train a new employee.
Location, location, location. Anyone who’s done some online advertising knows that search engines like Google, Bing, and Spotlight are big on location. Where is your business? Where are your customers coming from? Where are they searching you from? How localized are your ads? The primary goal of such localization efforts is to better ensure that the ads people see online will be relevant to them. No one wants to see an ad for an apartment building two cities away from where they want to live, right?
Adopting paperless payments has been an an unmitigated success for Weidner Communities, boosting resident online payment participation from an average of 25 to 30 percent to a monthly average of 65 percent across the entire portfolio. And the benefits are being felt across the board.
“At a corporate level, we are seeing a reduction in banking errors,” explained Laurel Zacher, Weidner director of marketing. “And we estimate our on-site staff are saving at least four minutes per check processing payments. When you look at some of our larger communities with five to seven hundred units, four minutes for each check is a huge time savings.” continue
It’s finally here! A few months ago when our CEO gave a sneak preview of the new ResidentPortal app to a packed house at the Entrata Summit, the feedback was overwhelmingly positive. The only thing our clients didn’t like was the idea of waiting to get their hands on this nifty little app.
Well, the wait is over. continue
Looking back on 2015, there’ve been a slew of informative posts here, all on a wide variety of topics. And since the whole year in review thing is kind of a big deal everywhere else, I thought I’d give it a try here by presenting some of the top posts from Entrata and what I’ve learned from them. Whittling down to just ten posts was a pain, but I accepted the challenge. So, without further ado, I present to you the ten highlights of 2015, provided with limited commercial interruption.
By: James Harris
Determining property value is one of the great difficulties faced by multi-resident housing investors. Many investors have previous experience with other types of real estate, typically residential homes or duplexes. However, the methods used to value those properties are different and often much simpler than the methods needed to value multifamily. For example, it is generally quite easy to find the fair market value of a single family residence by using a comparative sales approach. However, investors and appraisers use a variety of techniques to determine the fair value of a multi-resident property. Among these methods, The Rule of 150 is one of the most common.
What is The Rule of 150?
The Rule of 150 applies to the operational profitability of a multifamily property. It suggests that for each additional $1 in monthly NOI (net operating income), the value of the property is increased by approximately $150. This rise in NOI can come in one of two ways: increasing income or decreasing expenses.
How does it work?
Unlike the comparative sales approach mentioned above, multifamily property valuations are primarily a function of the CAP (capitalization) rate. This method maintains that by improving the financial operation of a building, this will in turn improve its overall value and equity. The following terms and formulas will help to explain further:
- NOI = income minus operating expenses
- Capitalization Rate = a measure of the income produced by an apartment building divided by the cost of the building
- Simple CAP Rate Formula: Capitalization Rate = NOI/Building Value
So as an example, if a property generates an annual NOI of $100,000 and is purchased for the price of $1,250,000 (Building Value), the CAP rate of the property is 8%. The Rule of 150 assumes a capitalization rate of 8%, but it may be higher or lower in your area.
If we rearrange the Simple CAP Rate Formula named above, so Building Value = NOI / Capitalization Rate…by increasing our NOI by $1 per month, this will equal an increase of $12 per year. This $12 annual increase in NOI, divided by our 8% assumed CAP rate, leads to a $150 increase in building value. Simply put, $1 per month x 12 months per year / 8% cap rate = $150 increase in building value.
What does this mean for you?
As a property owner, the one variable in this formula that you can influence is the NOI. And as mentioned above, NOI can be improved by either increasing income or decreasing expenses. So, you may opt to increase income by rising rents to market rate, adding to your property, or enhancing on-notice units. Or you may choose a low-expense approach by moving to energy-efficient lighting, sourcing other vendors, screening prospects more effectively, or investing in a property management software to free up valuable time. Regardless of your approach, it’s important to realize that a $1 per month increase in NOI, multiplied across hundreds of units, could make a major difference to your property’s value and appeal to potential investors.