The Great Amenities Race

Across the city and into the suburbs the great amenities race is on with luxury buildings playing a large scale game of keeping up the Jones. Smaller, older properties are also trying to keep pace with renovations and amenity additions. Some of the most unique amenities we have seen include a vintage arcade room complete with Skee Ball and Pac-Man at Pierce Boston, Ink Block’s botanical gardens, and the upcoming “Woof Deck”  a rooftop terrace for your dog to be included at the residential tower for The Hub on Causeway.

But what amenities to residents actually use, want, and will they pay a premium for? The National Multifamily Housing Council along with Kingsley Associates conducted a massive study of over 270,00 renters in 2017 to try and answer this conundrum. According to this study, the number factor in renter decisions was the availability of high-speed internet. In fact, 93% of all renters are reviewing the internet options of the community and the apartment when looking for a new home. With more people working remote and technology changing the way people consume media the importance of quality internet within a property, old or new cannot be underestimated.

Not surprisingly many renters also now expect to find a fitness center and pool within their community. 55% of renters surveyed wouldn’t lease without a fitness center onsite and 60% demand a pool!  In another study conducted for the National Apartment Association, an average rent premium of nearly $70 per month is also added when a fitness center is available for residents. Package delivery and storage options were also high on the list of importance. As more residents shop online and the number of packages being delivered increases it is important for a property to have a secure location to store these items and also a rapid pickup system in place.

What was most interesting about this study however was that community amenities were ranked as the 4th reason that renters move. Amenities ranked behind lower rent, management, and apartment features in the survey. So while amenities are important, top quality service and apartment upkeep are larger factors in renter decisions. However, with such a competitive rental market it will still be crucial for developers and building owners to be able to offer a unique amenity package that helps form a building’s identity.

The Importance of Service in Tenant Retention and Gaining a Positive Online Reputation

Gb Property

Browse through any number of reviews for apartments and you will see a trend in both the coveted 5-star reviews and the opposite end of the spectrum, the dreaded 1 star. Many include commentary on property or concierge staff. While apartment quality and other issues come into play, these interactions with staff can really make or break the tenant experience. As these reviews are also a major factor in leasing decisions for prospective residents they are of high importance to your communities online brand.

When looking for a new apartment almost ALL renters read online reviews. In an Apartments.com survey, 98% of respondents stated they do read reviews of a rental property when on the hunt for a new home and most importantly these reviews are making an impact on decisions. 96% of surveyed renters find reviews influential and 79% find them HIGHLY influential. Positive reviews will help to bring in additional leasing traffic and can make your property stand out in a crowd.

While much of the leasing and property management experience has gone online, personal interaction with residents is key so property staff must be engaged and valued residents. Property Managers hiding behind a desk or email are never going to solve a problem like a personal phone call or visit can. This high level of service can take a potentially negative experience and turn it into a positive interaction.  Many buildings also utilize a concierge service as their main face to the residents. This, in turn, raises the question is your concierge accurately representing your brand and providing the quality interactions with tenants needed to form good relationships or are they just a doorman who accepts and distributes packages? A quality concierge service will get to know your residents, names, likes, dislikes and provide that personal touch for the management team.

Industry average tenant retention is around 50-55% however with this philosophy of offering high-level service GB Property Management is averaging a retention rate of around 87%. Consider the increase in NOI a building could realize with just a small jump in retention let alone a 20-25% jump. With numerous new construction projects coming online in and around Boston, many offering rental concessions, it will be imperative for property managers and owners to ensure resident satisfaction to both retain current residents and attract new tenants by fostering a positive online presence.

Trends in Article 80 Summary

Haven’t had time to review the BPDA’s report on Trends in Article 80 Development? We’ve got you covered and are breaking down the trends on the residential front that are most important for property owners and managers. The report covers development trends dating back to 1996 when Article 80 was first put in place.

Residential projects have made up almost half of article 80 approval (47%) since 1996 with Downtown Boston, the South Boston Waterfront, and Fenway/Back Bay as the busiest neighborhoods. 2016 was the busiest year on record with 100 projects approved. 2017 was also solid with another 74 approvals. With all of these projects in the pipeline, BPDA expects an increase in permitting and construction in the coming years including the transit-oriented development projects The Back Bay South End Gateway & South Station Air Rights.

There are also numerous large projects under construction now expected to be complete in the next few years including the residential portion of The Hub on Causeway with 440 units and Bulfinch Crossing, approved in 2016, under construction now with the first phase, 423 units, becoming available in 2020. Washington Village, approved in 2016, will also finally start moving forward in the coming months with Samuels & Associates joining the project. This development will bring over 650 residential units to the already busy South Boston.

But with Boston’s growing population these new residential units are being absorbed. Since 2000 the Boston population has increased by over 93,000. As we know the Mayor increased the housing goal for Boston 2030 from 53,000 units of housing to 69,000 units to ensure a variety of housing options will be available for this growing population.

Rents are also continuing to grow, from 2006 to 2017 the median rent in Boston increased by 17%. With many of the new projects comprised of luxury rentals or condos, workforce or middle-income housing will continue to be in high demand. However, with construction costs on the rise, it will be a challenge for developers to make the numbers work on these projects.

While BPDA approvals peaked in 2016, the number of residential units in the pipeline is still high. Landlords will need to be conscious of their rents as new product comes to market and buyers will watch pricing as mortgage rates continue to creep up. The report shows overall positive growth for the city and with a large number of approvals yet to permitted we don’t expect the boom to slow down.

Money Saving Tips for Property Owners

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Even for the experienced property owner managing your asset can become tiresome and costly. Below are a series of quick tips that can help any property owner save $$$.

Tenant Selection

Select tenants carefully (and lawfully)!  Use a property management or credit check software to ensure you are only leasing to qualified tenants. In Massachusetts, especially, the laws are very tenant friendly so once a “bad” tenant is in your building it may be very difficult and costly to evict them.

Tenant Retention

Timely maintenance and regular inspections

Dealing with tenant requests promptly is key to ensuring your property is in good condition and small problems don’t become larger costly ones.  Regular inspections and routine maintenance are also important, especially if you have a hunch your tenants are lax in reporting maintenance concerns.

Smart systems

Many newer properties will feature the latest in smart technology but older properties can be retrofit with these devices to keep utility costs down and run your property at top efficiency.

Tenant retention

Everyone knows keeping a tenant is less expensive than a new lease so customer service is key!  Have you gotten lost in the phone maze of a large property management company? Not pleasant for current tenants or anyone looking to lease at your property.

Hiring a Boutique Property Management company.

As a property owner, you want to ensure your asset is being run at peak performance but also at a reasonable rate.  Utilizing a boutique, local property management firm like GB property Management can decrease your management fees but also increase response time and tenant retention by building strong foundations with residents.

GB Properties Tips for Winter Weather

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GB Property Management is back with more tips for property owners and managers.  This month we tackle every maintenance teams favorite topic winter maintenance and snow removal. We’ve got tips on prepping your building for the New England Winter along with suggestions to ensure you’re avoiding pesky and expensive lawsuits.

 

Preparing for Winter

  1. LEAVE THE HEAT ON – Again we are hitting you with common sense, but remember for many residents that is not a strong suit. Before residents head out for a holiday break, make sure to remind them to leave their heat on. A low temperature is fine for those residents not home but to avoid frozen and burst pipes the heat should NEVER be turned off. CLOSE YOUR WINDOWS – In some of the older buildings in Boston with radiator heat, when residents don’t understand how to control the temperature they may open a window. Ensure residents know how to operate their heat and do a quick exterior check for open windows or patio doors.  When you are walking the building interior it is also a good time to be on the lookout for drafts. We have saved a burst pipe or two when the maintenance team noticed a draft coming from an apartment with a window left open by an out of town resident.

  1. Inspect roofs, doors, windows, and any other potential area for heat loss or water leakage. Also, make sure to check gutters to avoid ice dams.

  1. Check Vacant Units: Ideally your property is fully leased but if you do have a unit that is unoccupied make sure to check that the heat is on and it is ready for winter.

  1. Inspect your HVAC systems: Annual maintenance on your HVAC system will ensure it is running properly and efficiently. Checking the system on a regular basis will also help prevent costly and disruptive emergency repairs.

  1. Snow Removal: Have your team ready and supplies on hand. Keep detailed logs of snow removal, sanding, salting activity. In Massachusetts, an injured party has up to 3 three years to file a claim!  Detailed records will allow you to fight against a frivolous lawsuit. If an incident does occur, take photos and detailed notes. Having an incident report template to make sure all details are noted by staff is also a great idea.

Is your property ready for winter? Contact us to learn more about how we can better manage your asset to increase residence retention and save you money!

 

IoT in Multi-Family Developments

A vast majority of today’s new construction multi-family developments are integrating some form of smart home device into their projects. From thermostats and lighting to keyless entry, today’s renters are expecting their apartments to seamlessly integrate into their tech-heavy lifestyles. These smart devices not only provide an additional amenity designed to save residents time and better quality of life but they also help landlords by cutting energy costs and in some cases can provide a direct service channel to tenants in their homes.

Multifamily buildings generate massive amounts of data and being able to monitor and manage this mountain of information may seem like an overwhelming task. However, developments that utilize smart sensors and other IoT tech can easily review and monitor this information to cut down on operational inefficiencies and help predict maintenance needs. For example, a smart plumbing system can not only detect a leak but will shut off the water and notify the maintenance staff thereby preventing costly water damage. Along with these sorts of problem-solving abilities, smart devices can also be utilized to cut down on energy usage. According to the global research firm, McKinsey, the application of IoT for residential energy management could save over $110 Billion in energy annually by 2025.  While new construction projects often have these devices built-in, implementing even some basis smart tech at an older property like thermostats and connected outlets is not a massive undertaking and will typically pay for itself in 2-3 years. Ultimately with more control and lower costs due to operational efficiencies, preventative maintenance, and resource management, tenants also receive a better experience in their homes.

Leading the charge to bring smart home devices into the apartment sector is Amazon who has partnered with Zego a hub designed specifically to link smart home devices within apartments to the building’s management and maintenance. Zego is currently operating in 20+ markets across the country in both large and boutique communities. Recently Amazon & Zego began working with national landlord S2Capital to bring the Amazon Echo into around 30,000 in the next three years. S2, founded in 2012, currently operates more than $2.1 billion in Class B and C multifamily communities. Having invested more than $200 million in upgrades and renovations, S2 feels these smart devices will provide the best-in-class technologies residents want. S2’s residents will have the ability to control smart home devices such as smart locks, lights, thermostats and wall plugs with the Zego app, or simply by asking Alexa. As a next step, It won’t be long before residents can tell Alexa to pay their rent.

The market for IoT, currently valued at more than $15 billion is projected to reach $137 billion by 2023. Obviously, this trend is certainly not slowing down. Smart buildings will continue to have the competitive advantage against their competitors and savy building owners and property managers can leverage this technology in numerous other ways to save on operational costs.

Selecting The Right Property Manage

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From a project’s inception, great attention is paid to the details of design, construction, and finishing. Countless hours and often too much money is spent on marketing, from getting the rendering just right to naming the project and furnishing a sales gallery or model units. It may have taken years to gain approvals and permits but finally, your project is nearly complete. What tends to be an afterthought, however, is who will manage your property. While it may seem to be a small detail in what was a sea of decisions, selecting the right management company for your asset will help ensure it maintains its long term value.

Here a few key factors to consider when selecting your new property manager.

Technology

In today’s world, tech is a must-have for residents and landlords alike. A top management company needs top software. With numerous property management software options available it is imperative your management company has one that is easy to use for leasing, rent payment, and maintenance. Quality software will also provide easy access for property owners to view online reporting allowing quick snapshots of property performance or an in-depth look at financials

Service Plans/Maintenance

Even if your building is brand spanking new there will still be little kinks to work out and routine maintenance to ensure systems are running efficiently. Your management company should have a concrete plan in place to handle both emergency maintenance requests, standard requests, and routine/preventative maintenance.

Brokerage

With your renderings and floor plans in hand, many projects kick-off sales or leasing well before construction is complete, hiring a broker to handle filling up the building. However, finding a property manager who also offers brokerage services can streamline the process and allow for the lease-up or sales process to be the start of a solid tenant/management relationship. Utilizing just one contact for sales/leasing and management also makes the process easier for the property owner allowing for just one point of contact instead of two separate teams.

References & Reviews

Your prospective tenants or buyers are going to be reading online reviews so you certainly should too. And while some may need to be taken with a grain of salt, a majority of the time these reviews are an accurate glimpse into a companies customer service. A quality management company will also be happy to provide several references who can attest to their capabilities in handling valuable real estate assets.

Customer Service

Once your buildings are full it is now up to the property management team to ensure your tenants are happy and will stick around for years to come. Turnover at your property can be a costly expense that may be avoidable with high-quality customer service. While there will always be a certain amount of turnover, losing tenants to a competitor property because of bad management will surely hurt your bottom line. Sure signs of good customer service include personal interactions between the management team and residents, the manager does not hide behind an automated phone message and reaches out to residents to personally solve problems. Engaging residents in community events is also important in building a sense of community likely to keep tenants happy and renewing.

Have questions about selecting the right management company for your project? GB Property Management offers expert property management services throughout Boston and can also provide lease-up or sales services for new construction. Their tenant retention rates are also ridiculously high at 87%. For more information or a quote on management services contact the GB Property Management Team at (617) 777-6109.