The importance of documentation.
Company: Oglesby Management Group Inc.
Number of Units: 469
Place of Business: Lynchburg, Va., and Roanoke, Va.
Local Apartment Association: Virginia Apartment Management Association
Q: How long have you been an apartment building owner?
A: I started my rental ownership in 1970, about a year after I started in real estate brokerage, with the purchase of a single-family house rental.
Q: What is the greatest value NAA and your local apartment association provide for your business?
A: NAA and my Virginia Apartment Management Association (VAMA) provide good national and state legislative coverage for our business. It is absolutely critical to monitor legislation. On a personal note, being a member of VAMA and NAA has given me an opportunity to serve as a representative of NAA and VAMA on our State Building Code Technical Review Board. [Former] Virginia Gov. [George] Allen appointed me to this board in 1995. VAMA has continued to endorse me and successive governors have reappointed me. It has given me an excellent educational opportunity and also the opportunity to help protect our industry from intrusive building and fire code changes. Q: How can IROs become more involved in deciding when and where to invest?
A: I believe that the best way to be involved is to let your local executive or your association president know that you want to take an active role in your association. I have been involved in judging for the Central Virginia Apartment Association for several years, and I believe I get more out of it than I give.
Q: What factors are involved in deciding when and where to invest?
A: That is a very complex question. I like to buy properties that are 30-40 years old that need work. Usually the rents are below market. For me, these have the best upside potential. Also, when I do the upgrading, I use equipment and materials, which I know will require the least maintenance over the long run. Since I plan to hold the property, a little extra expense on the front end pays big dividends. As far as where to invest, I have found that you are better off staying in your own state. Laws and building codes vary widely from state to state. Also, the further you get from home, the more expensive and difficult it is to manage them.
Q: When do you think it's the right time to hire a property management firm to manage one's properties?
A: I'm probably not the right one to answer this question. I have owned and run a property management fee-based brokerage company and am a Realtor. I believe that if you are a small investor just getting started in the business, you need to start off with a competent property management firm. If and when you "know the ropes" and are large enough to have property management as your full time job, then you can manage them yourself.
Q: Why is documentation of a property and its residents so essential?
A: When documenting a property, keeping up with replacement of components is essential to control. Without proper record keeping, the property owner may not be able to make warranty claims or evaluate different manufacturers' products. Keeping proper records on residents is absolutely critical. Your documentation and processing must be consistent to avoid fair housing complaints. As Chairman of the Virginia Real Estate Board, adjudicating fair housing violations, I see property managers getting serious fines for failing to properly document transactions and situations that occur on a daily basis. Cover your backside: document, document and document.
IRO Member Profile
Company: Lifestyles Unlimited Inc.
Number of Units: Five communities; 360 units
Place of Business: Houston
Local Apartment Association: Houston Apartment Association
Web Site: www.delwalmsley.com
Q What challenges have you encountered as an IRO and how did you overcome them?
A: The most difficult task for small business owners is to learn how to work on the business and not in it. Early in our business careers, many of us mistakenly try to save money by doing work ourselves or by hiring the lowest-priced alternative. This leads to management practices that eventually result in a lawsuit against the small owner or forces the owner to shut down.
The other common problem with IROs is that they do not know how to market their properties correctly. I have never found a property that could not operate at 95 percent occupancy or higher. I realize that this sounds like a bold, hard-to-believe claim, but it is true. While the city of Houston was averaging 85 percent occupancy, our group of apartments was never less than 95 percent occupied.
IRO Member Profile
Company: Central Properties
Number of Units: 270
Place of Business: Austin, Texas
Local Apartment Association: Austin Apartment Association
Web Site: www.CentralProperties.net
Q What are three important factors in the effective management of rental property?
A: First is knowing whether or not the apartment is ready. It is so important that a property is is in top form when it is shown. For example, the blinds must be completely installed and the owner should leave no trace of maintenance materials lying around the apartment.
Second is rent. I have my managers call competitors on a regular basis to make sure our rent is competitive. Sometimes the competition will run a special or will lower its rates to attract new residents.
Third, employ an effective property manager. We find that if you take care of the first two factors and still have too many vacancies, you may want to have a talk with your manager.
IRO Member Profile
Company: Wergers/Kan-do Properties
Number of Units: 15
Place of Business: Cincinnati, Ohio
Local Apartment Association: Greater Cincinnati Northern Kentucky Apartment Association
Q Do you have "best practices" on maintenance or maintenance staff management yon can share?
A: Never take shortcuts on your maintenance repairs. I never use a part that says "universal," "fits most models" or "one size fits all." This applies especially to properties built before 1970. Get the right part for the job. Your local hardware or big box store may not carry your part, so go to the nearest plumbing or electrical supply house. You may lose a few hours by having to track it down, but it will pay off in the future. Do it right the first time.
For more tips from the featured IROs, please visit www.naahq.org/membership/iroc.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||IRO Member Profile|
|Date:||Apr 1, 2007|
|Previous Article:||Raising the rent: follow the letter.|
|Next Article:||The reposition equation.|