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Renters See Big Benefits in Renewing Leases Instead of Moving as Rents Continue to Skyrocket

Friday, July 21, 2017

 

SEATTLE, WA - Renewing a lease instead of moving to a new apartment can mean major savings for renters. Those who moved in the past year paid an average of $3,946 more in 2015 on rent than renters who stayed in the same unit for the past five or more years, according to a new Zillow analysis of 2015 rent data from the U.S. Census American Community Survey (the most recent data available).

While rents increased across the country, market rate rents – those that are advertised for new renters – increased more than rents did for tenants who renewed leases. The annual market rate increase in rent from 2014 to 2015 was 5.6 percent, compared to a 3.6 percent increase for renewed leases.

The U.S. faces a rental affordability crisis, as rents have skyrocketed in recent years, while incomes have remained largely flat. Zillow's research shows that when rents are rising rapidly, renters can save a good chunk of money by renewing a lease, rather than moving and starting a new one. Renters can use these savings for a down payment, which most renters say is the greatest barrier to buying a home.

There are 43 million renter households across the country, about 4 million more than there were five years ago. The majority of recent household formation happened on the renter side instead of the homeowner side, in part due to millennials reaching the age to move out but not having enough savings to buy a home. Young adults are also renting longer than ever before buying.

"Renters have a decision to make almost every year – do they stay in the same place, or should they look for a new unit?" said Zillow Chief Economist Dr. Svenja Gudell. "With the country in the middle of an affordability crisis, it's important for renters to understand how much they can save if they renew their lease instead of finding a new rental. Nationally, rental rates have slowed and the savings from renewing are not as significant for renters today. However, in some of the hottest rental markets, where rents are still rising aggressively, continually renewing a lease can mean saving thousands of dollars."

In Boston in particular, it paid off for renters to stay in the same place instead of moving every year. Boston renters saved up to 86 percent by staying in the same rental for five or more years, which translated to $8,979 in annual rent payments. They also faced the biggest difference between annual market rate rent increases – 10.5 percent – and rent increases for renewing – 4.3 percent.

Renters in Las Vegas had the smallest financial incentive to stay in the same unit. Renters who have lived in the same unit for five or more years paid on average $842 less per year than renters who moved the year before.

 

An article by MultiFamilyBiz:

http://www.multifamilybiz.com/News/7763/Renters_See_Big_Benefits_in_Renewing_Leases_Instea

July 11, 2017


 


A Mid Year Report Card, Is Your Property Achieving Its Goals?

Friday, July 07, 2017

An article written by Lori Hammond from Multifamily Insiders:

With the end of June, take this opportunity to review your property’s achievement or progress toward its goals. Explaining goals during team meetings gives each team member ownership and understanding of these objectives. Converting each objective into SMART goals gives a value every team member can measure.

  • What occupancy is needed to produce the budgeted rent revenue? What is the average occupancy for the first half of the year?
  • How do the year to date expenses compare to the budget?
  • How do occupancy and expenses compare to the property performance from a year ago?

With many organizations, success is not only measured in a comparison to budget, but also, it’s year over year expenses, same store sales.

The results of changes to revenue and expenses will determine the effect on NOI, Net Operating Income, for the property.

Has the Gross Rent Potential increased over the previous year? This would be achieved if the market rent has been increased. The impact of rent increases, is lessened by the existing leases on a property. Managing lease renewals will reflect in a decreasing trend in the rent dollars tracked in a loss to lease expense area. Failure to increase rents on renewals will decrease the rent revenue on a property.

image What change has affected the average or economic rent? Market rents can be increased, but if lease renewals do not result in increased rental rates or move in concessions are increased; the average rent will have decreased from the year before.

A property could easily report a higher occupancy, but collect less rent as a result of renewal or move in concessions.

The second category for the financial report card is an evaluation of expenses. Again, performance may be compared to budget, or previous year expenses. In most cases, apartment turnover strongly affects expenses. Establishing a goal for lease renewals, resident retention; not only creates growth in revenue, with increased rents but can decrease maintenance expenses with reduced turnover.

There are many cases where the number of occupied apartments, the occupancy percentage may exceed the previous year results, but the net operating income is less than the previous year. Understanding this dynamic is important to increase the value of the property.

Use of concessions, reduced rental rates and residents with unpaid balances all contribute to a perception of improved performance, when the actiual financial results show something much different.

Economic occupancy is calculated by dividing the rent income received by the number of occupied apartment homes. Focusing on this value shows the effect of concessions on revenue.

A property with 200 total apartment homes, an average market rent of $600 has a monthly gross rent potential of $120,000. If the property is fully occupied, all 200 apartment homes have signed leases; not preleases, or assigned apartments, but paying rent, keys in hand occupied apartments, with $113,893 for rental income, it reflects a 94.9% economic occupancy. This same result in revenue actually reflects an effective or economic rent of $569.

Its important for the leasing staff and the manager to understand this concept. In terms of leasing, a prospect needs to understand the economic value. In terms of property performance, a negative change in the effective rent may impact the cash flow of the property.

Using concessions may increase occupancy, but offering reduced rental rates has a long term impact on property performance. With the example described, this is an average of $31 per month per apartment; the annual impact-almost $75,000 in lost revenue.

Mid-year is a time to determine if property operations are contributing to progress for goals or how either the goals or operations should be adjusted for property success.


HallKeen's 2017 Summer Outing Award Winners! Congratulations!

Friday, June 23, 2017

Rookie of the Year
Christine Montique, Executive Director, Corcoran House
Fariba Carter, Property Manager, Palmetto Park
 
True Leader
Ally Chappell, Regional Manager
Michael Mahoney, Senior Resident Care Director, HK AL Region
 
Corporate Superstar
Lisa Zaccaria, HUD Regulatory Program Manager/Asst Training Coordinator, Norwood Office
Steve Hardy, Regional Facility Manager, Norwood Office
Ellen Coen, Property Accountant, Norwood Office
 
Unsung Hero
Diane Reynolds, Assistant Property Manager, Cefalo Memorial Complex
Trishia Brooks, Assistant Property Manager, Keen’s Crossing & Spinner Place
Stephanie Monteiro, Front Desk Manager, Susan Bailis
  
Noble Caregiver
Kathleen Hunt, RCA, Corcoran House
Leah Pierce, RSC, Danville House
 
Safety Star
On behalf of HK Properties
Laura Holmes, Senior HR Generalist, Norwood Office
 
Top Performers
Highlands on the East Side, Providence, RI
Danville House, Danville, VA
 
Special Acknowledgements
Jannel Satterwhite, Williamson, Corporate Community Relations Manager, Norwood Office
Pete Rodriguez, Maintenance Director, Summerfield Townhouses
Jesse Curll, Senior Asset Manager, Norwood Office

 


Barton Commons Grand Opening!

Friday, May 12, 2017

Barton Commons in New Milford, CT celebrated their Grand Opening event on May 3rd with representatives from the Department of Housing, CT Finance Housing Authority and Mayor David Gronbach of New Milford. It was a sunny, windy day, guests & residents were invited to tour the remaining 2 empty apartments as well as enjoy an ice cream treat from Ben & Jerry’s! The 38 unit affordable & market rate property will be 100% occupied on May 15th and has made a substantial addition to affordable housing in Litchfield County. You can read more about the project development and impact on the town in this article from the News Times: http://bit.ly/2q7RP98


 

 


Capitol Lofts Grand Opening

Monday, May 01, 2017

 

Capitol Lofts in Hartford, CT celebrated their Grand Opening event last week! This 112 mixed income property is adding affordable housing to the Frog Hollow neighborhood of Hartford and is almost 50% leased since it’s opening to the public in January. ...

There were over 100 people in attendance to tour the property
and hear the story of the property. Speakers included representatives from owner & developer Dakota Partners, the Capitol Region Development Agency, Department of Housing, Connecticut Housing Finance Agency and other partners on the project. Hartford Mayor Luke Bronin was in attendance as well who also spoke at the event. Congratulations, Capitol Lofts!

 

 


HallKeen Welcomes Burbank Gardens!

Friday, April 14, 2017

 

HallKeen Management is proud to announce and welcome a new property Burbank Gardens located in Boston, MA. Burbank Gardens is a 52 unit residential apartment building of mixed income housing located on Burbank Street in the heart of the Fenway. The property is comprised of Studio, one and two bedroom apartment homes. The property will be managed out of the HallKeen Management Office located at 70 Burbank Street and will be managed by the team led by Nicole Connelly. Edin Dzindo is the new maintenance technician and has been with the property for fifteen years. We are excited for Edin to be part of our HallKeen - Fenway Team. Welcome aboard Burbank Gardens!

 


Industry Knowledge Corner: Average Length of Apartment Searches

Friday, March 31, 2017

 

An average renter searches for an apartment between two weeks to three months (14 to 90 days) before they move.

Most search one to two months before they move. -See graph below


Renters want to make informed decisions and will make the time to do so. Remember, they are looking at your property plus your competition.

-info & stats from Online Search Behavior and Trends of Apartment Renters | A Joint Study by Apartments.com and Google

 


The Morris Family , Carpenter’s Glen

Friday, March 17, 2017

 


Courtney Morris was in a Fall River homeless shelter wondering if she would ever find a permanent, affordable home where she could live with her mother and two daughters.

Carl Nagy-Koechlin, the Executive Director of Housing Solutions for Southeastern Massachusetts, who along with HallKeen Management worked to place Courtney and her family in an affordable three-bedroom apartment at Carpenter’s Glen in Taunton, MA, a 32-unit affordable housing community that recently underwent a major renovation.

Courtney Morris signed the lease and is now no longer homeless. She is extremely grateful and happy to have a place to call home.

Read the rest of the article here: http://bit.ly/2lIy87a

 

 


Market rate apartments take shape at Commonwealth Landing

Friday, March 03, 2017

By Kevin P. O'Connor
Herald News Staff Reporter

FALL RIVER — The Fall River of the future shares a lot of pieces with Fall River of the past.

Lots of brick and granite, busy mills, a distinct turn toward the water.

But in the city of the future, those pieces have been rearranged a bit, according to developer Anthony Cordeiro.

The first completed model apartment at the Commonwealth Landing is a case in point.

The office is open, leasing has started, seven of the 103 apartments have been claimed in the renovation of Commonwealth Landing, 1082 Davol St., that was a mill complex until Quaker Fabric left town in 2007.

Jerry Remy's Sports Bar, Clique Lounge, Brian Fox studio as well as offices, classrooms, a salon and an exercise facility fill the lower floors.

The top three floors will be one, two and three bedroom market rate apartments.

These are not your grandfather's apartments.

In the model unit, an 8-foot door opens into an 805 square foot one-bedroom apartment. You see an exposed brick wall immediately and the tall arched windows that show views of the Taunton River.

There are blond pine floors, granite counters in the kitchen and bathroom, high end washers and driers, elevators, fitness rooms and community rooms dedicated to tenants.

The ceilings are open to the original oak and pine ceilings, 12-feet high, that were installed for the fabric mill.

Outside the apartment, drywall hangers and electricians were busy. The hallways were filled with the rattle and thump of construction. Inside, that sound disappeared.

"We spent an extra three quarters of a million dollars to make sure each unit was insulated properly so you can't hear your neighbors when you get home from work," Cordeiro said.

"During every tour I've given, construction was going on," said Margaret Farrell, the leasing manager. "When you get into the apartment, you just don't hear it."

Farrell began signing leases a week ago for apartments that will be available starting on Aug. 1.

"We have seven approved leases right now," she said. "I'll have 10 percent of the apartments leased by the end of February."

Cordeiro purchased the property in 2010 with his partners, Larry Couto and Alan Macomber. That team oversaw the renovation of the site. The apartments will complete it.

At the start of the project the three developers said the complex would anchor the city's waterfront and give the city an idea of what its future can be.

That is still true, Cordeiro said.

"Our whole dream was to see if Fall River can attract the clientele, the millennials and empty nesters, to come here to live and play," Cordeiro said.

"This has finally happened. It took a long time, but we never faltered."


Talking Trash: The Value of Keeping Your Apartment Community Clean

Friday, February 17, 2017

Article written by Tim Blackwell from Property Management Insider.

Increase revenue by relying on smarter waste services for your apartment community

Trash talk is hardly sexy, especially following a discussion about high-end apartment amenities, but Shawn Handrahan gave it a try at the recent Marcus & Millichap multifamily conference in Dallas.

Handrahan is CEO and president of Valet Waste, which provides services for handling the mounds of waste that residents produce each year. Superficially, this may not sound as glamorous as discussing the draws of infinity-edge pools, but Valet Waste provides doorstep trash and recycle pickups for more than 1 million units, giving Handrahan unique insights into the ways waste removal can increase revenue and drive resident satisfaction.

According to Handrahan, cleanly removing refuse not only provides a nice amenity for residents but adds noticeable value to properties through increased revenue and operational efficiencies. As far as elevator pitches go, that’s enough to make any multifamily operator stop and listen.

Handrahan attributes Valet Waste’s success to helping properties keep clean while also saving them the costs of regular billing cycles associated with conventional haul-off services. Hauling partially filled compactors adds up over the long term, and properties can save by working with a provider that manages pickup times.

“One of the large expenses that goes unknown in multifamily is hauling fees because they have no idea how full the compactor is,” he said. “You may be paying for two hauls a month, four hauls a month depending on the property. But that compactor may only be 25-30 percent full, and you’re paying heavily for that.”

That can get especially expensive when the price of oil and gas goes up, he added.

Valet Waste uses data and analytics to work directly with contractors to make hauls only when the compactors are full. Typically, this model reduces the number of hauls and lowers compactor expenses by requiring fewer pickups.

apartment community

Maintenance staff can focus on more important resident issues

As another example, Handrahan discussed the ways that inefficiencies in the standard waste-removal model can trickle down to maintenance teams, who usually spend the first hours of their days policing properties to maintain curb appeal. With more efficient processes, a property’s maintenance staff can improve resident satisfaction and retention by reducing wait times on maintenance requests, as well as minimizing turnaround on vacancies by seeing to empty units more quickly. Plus, the maintenance techs will feel better about their jobs.

“How would you feel if you were this HVAC-certified maintenance technician, and you’re being asked to go out with a plastic bag and pick up pet waste?” Handrahan said. “It’s operationally inefficient. It drives employee morale down, and ultimately impacts turnover, which impacts resident satisfaction because you’re constantly having to reinvest in training.”

Upgraded waste and recycling services target younger demographics

As for demographics, Handrahan highlighted that Valet Waste has benefitted from the influx of Millennials in multifamily who don’t mind paying extra for someone else to handle the dirty work.

“Anything that you can provide to Millennials that differentiates yourself from the competition is useful,” he said. “It’s the reason why, as Millennials enter the market, our business has boomed so incredibly well.”

Handrahan estimates that the service can generate $40,000-$50,000 of net operating income for a property, depending on the size, and greatly impact asset value. The formula has helped Valet Waste, started in 1995, grow its portfolio to more than 450 management companies and owner groups throughout the multifamily housing industry.

Lowering costs with asset protection

Also, because these services collect trash and recycling at apartment doors, the apartment community spares itself the wear and tear of residents taking dripping, dirty refuse to the dumpster. The professional handling of waste removal ultimately serves as asset protection, which Handrahan translates into increased property revenue.

“It’s how often you pressure wash your breezeways and clean carpets, especially in high-rises,” he said. “That’s because you’ve got these folks taking their trash out. But if they’re staining that asset and you’re replacing that carpet in the common area, you’re making a capitalized expense that you don’t need to make.”

With these savings in mind, talking trash is starting to sound pretty sexy.