The Landlord Times - Valley - Jan 2013

From the start of 2012 Salem-Keizer has continued to experience a decrease in vacancy rates.

The vacancy factor has adjusted from a low of 2.95% in 2007 to a high of 6.13% in 2010 back to 3.07% by fall of 2012.

Average rent in Salem-Keizer for a 2 bedroom 1 bath unit with no ame-nities built 1990 or newer is $678.00.

Likewise average rent in Salem-Keizer for a 2 bedroom 1 bath unit with no amenities built after 1990 is $601.00.

Landlord concessions have decreased.

Some landlords are starting to bill back to tenants charges for water,

By Jeneé Hilliard

As part of the financing of Obama Care, Congress created Internal Revenue Code Section 1411, which created a new 3.8 percent Medicare tax. The new Medicare tax will take effect on January 1, 2013, and will apply to net investment income of individuals with a modified adjust-ed gross income of at least $200,000 ($250,000 for couples filing jointly). The tax will apply to the lesser of (1) the taxpayer’s total “net invest-ment income” for the year, or (2) the amount by which the individual’s total income exceeds $200,000 (or $250,000 for married couples filing jointly). This new tax will hit real es-tate investors hard.

Investment Income Includes Rental Income

Under the new code provision, “net investment income” is defined to include “gross” rents. Even though “gross” rents are subject to the new Medicare tax, the “gross” rents can be reduced by deductions properly allocable to the rents. We expect that this will allow an individual to de-duct depreciation, interest expense, property taxes, insurance payments, and other rental property expenses before determining the amount of “gross” rents subject to the new Medicare tax (although it does cause concern that Congress used the term

The cost to insure apartments increased by 9.5 percent between 2011 and 2012, marking the second consecutive year of rising insurance expenditures according to the National Multi Housing Council’s (NMHC) Apartment Cost of Risk Survey (ACORS). The survey covers data from more than one million apartment units, the largest number of units covered by the survey to date, operated by 55 apartment firms, tracking three principal components of insurance premiums: property, general liability and workers’ com-pensation. The 9.5 percent increase in 2012 came entirely from property

risk costs, with general liability and workers’ compensation costs staying virtually unchanged from 2011.

“Respondents noted that their greatest challenges in 2012 came from obtaining adequate and affordable coverage in traditional catastrophe risk zones. In fact, catastrophe exposed properties were the major drivers of the increase in premium costs and higher deductibles,” said Rick Haughey, NMHC’s Vice President of Property Operations and Technology. “With U.S. catastrophe losses in 2012 expected to be moder-ately higher than average due to Hurricane Sandy, the outlook for

insurance costs in 2013 remains uncertain. This uncertainty mitigates what would be downward pressure on 2013 catastrophe rates due to strong underwriting capacity for pri-mary insurers and reinsurers.”

Additional key findings:The mean (nonweighted) average

for the total cost of risk increased 9.5 percent in 2012, driven by an increase in property cost of risk, which accounts for 70 percent of the aver-age apartment firm’s total cost of risk.

The mean average property cost of risk increased by 10.4 percent and average per occurrence deductibles increased to $118,000 from the unusu-ally low average deductible of $66,000 in 2011.

The mean average general liability cost of risk remained virtually unchanged in 2012 after a 9 percent increase last year.

The mean average workers’ com-pensation cost of risk in 2012 also

Apartment Insurance Costs Increase for the Second Consecutive Year

According to National Multi Housing Council Report

Continued on page 7

The Tax Man Cometh for

Your Real Estate Income

EUGENE • SALEM • ALBANY • CORVALLIS

VALLEYJanuary 2013www.TheLandlordTimes.com

Vol. 17 Issue 1

MONTHLY CIRCULATION TO MORE THAN 5,000 APARTMENT OWNERS, PROPERTY MANAGERS, ON-SITE & MAINTENANCE PERSONNEL

Published in association with: METRO Multifamily Housing Association & Rental Owners Association

Professional Publishing, Inc

PRESIDENT'S MESSAGE

Page 2

Page 4

A MESSAGE FROM YOUR PRESIDENT …

Professional Publishing, Inc PO Box 30327 Portland, OR 97294-3327 Current Resident or PRSRT STD US

Postage PAID Portland, OR Permit #5460

Continued on page 3

Continued on page 5

Multifamily Markets Salem-Keizer 2012 Summary

By Anita Risberg, CCIM Senior Broker, HFO Investment Real Estate, Apartment Specialist

2 The LandlordTimes - Valley • January 2013

President • Jeff Denson Past President • Chris Hermanski Vice President • Paul Hoevet Secretary • Pam McKenna Treasurer • Gary Fisher

METRO MULTIFAMILY HOUSING ASSOCIATION

921 S.W. Washington Suite 772 Portland, OR 97205 (503) 226-4533 (503) 228-8303 fax

JEFF DENSON MMHA President

President's Message

About the Form: The Move-In Accounting Form provides a tem-plate for detailed financial documentation of the tenancy than what was previously part of the Rental Agreement. The form provides ample space to record all deposits, rents, specials and charges to cus-tomize and fit the unique needs of each property. The Rental Agreement still has basic tenancy accounting of rents and deposits, however the Move-In Accounting form is designed to easily display and record multiple deposit types, rent payments, concession strategies and pay-ment plans.

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OREGONMOVE-IN ACCOUNTING

DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________

RESIDENT NAME(S) ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________

CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________

_____________________________________________________________________________________ _____________________________ _____________________________________________________________________________________ _____________________________RESIDENT DATE RESIDENT DATE



_____________________________________________________________________________________ _____________________________OWNER/AGENT DATE

X X

X X

X X

X

PRO-RATE METHOD: c A c B c C (See #1 on page 2 of Rental Agreement)

FIRST RENT PAYMENT DUE ___________________________ $________________________

FROM ___________________________ THRU ___________________________

SECOND RENT PAYMENT DUE ___________________________ $________________________

FROM ___________________________ THRU ___________________________

TOTAL RENT DUE AT MOVE-IN $___________

OTHER MONTHLY CHARGES (PRO-RATED IF PARTIAL MONTH)

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

TOTAL OTHER MONTHLY CHARGES $___________

SPECIALS/ADJUSTMENTS

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

TOTAL SPECIALS/ADJUSTMENTS $___________

TOTAL RENT/CHARGES AMOUNT DUE $___________

PRIOR PAYMENT(S) ____________________________________________________ – $________________________

TOTAL CHARGES PAID AT MOVE-IN – $________________________

RENT/CHARGES BALANCE DUE $___________

RENT/CHARGES DEPOSITS

TOTAL RENT/CHARGES + DEPOSITS CHARGED $___________

TOTAL PAID $___________

REMAINING BALANCE DUE $___________

TOTALS

c IF CHECKED, DEPOSITS WILL BE HELD BY OWNER

SECURITY DEPOSIT (REFUNDABLE) $___________

ADDITIONAL DEPOSITS

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

TOTAL ADDITIONAL DEPOSITS $___________

SPECIALS/ADJUSTMENTS

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

____________________________________________________________________________________ $________________________

TOTAL SPECIALS/ADJUSTMENTS $___________

TOTAL DEPOSITS CHARGED $___________

PRIOR PAYMENT(S) ____________________________________________________ – $________________________

DEPOSITS PAID AT MOVE-IN – $________________________

BALANCE OF DEPOSITS DUE $___________

Happy New Year! It is with both honor and excitement that I will rep-resent MMHA as President in 2013. I would like to thank our Immediate Past President, Jeff Denson, for his time and effort that he gave the asso-ciation this past year. I would also like to acknowledge all of our Founders, Past Presidents, and Members of the Board, Committee Chairs, and Committee members. If it was not for all of your commit-ment, MMHA would not be the number one rental housing resource that it is today.

Thank you to our departing Board Members: Cindy Meek of Holland Residential, Cliff Hockley of Bluestone and Hockley Real Estate Services, and Korah Young of GSL Properties, Inc. It has been a pleasure working with all of you this past year. Your service to the Association is appreciated.

Please join me in welcoming our new Board Members: Maureen McNabb of Capital Property Management Services, Inc, Dave Bachman of Cascade Management, Inc, and Jay Olson of Prometheus

Real Estate Group. I look forward to sharing many accomplishments with you in 2013.

2013 promises to be a very pro-ductive year for the Association. Our industry is doing extremely well and our rental housing market continues to remain one of the strongest in the Nation. As the rental housing market continues to grow, so will MMHA. Some of the growth initiatives the Association will be working on this year include continuing to increase all of our advocacy efforts to ensure our voice is heard in the 2013 Oregon Legislative Session, a focus on mem-bership growth through continued

expansion of our statewide Council Structure and to develop and imple-ment a plan to encourage up and coming Industry Leaders to partici-pate in the Association.

As we enter 2013, MMHA must continue to capitalize on the strength and momentum of the Industry it serves. The Association has a well laid foundation and is poised for yet another successful year. I look for-ward to meeting many of you throughout the year. Your involve-ment with your Association will help MMHA to continue its growth and remain the number one rental hous-ing resource.

January 23, 20139:00 AM - 2:00 PM

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MMHA 2013 Events: MARK YOUR CALENDAR!

visit www.metromultifamily.com for more dates

Advertise in the Landlord Times - Valley

Circulated to over 5,000 Apartment

owners, On-site, and Maintenance

personnel monthly. Call 503-221-1260

for more information.

The LandlordTimes - Valley • January 2013 3


VALLEY

VALLEYThe Tax Man ...continued from front page

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mg_cp_4.875x7.5_valley_portland.indd 1 1/11/13 11:45 AM

“gross rents,” if it is actually intend-ed to mean “net” rents).

Exception for Real Estate Professionals

One way to avoid the tax is for a taxpayer to qualify as a real estate professional and for the taxpayer to materially participate in the real es-tate activities that generate the rental income. To be a real estate profession-al, a taxpayer must (1) spend more than half her time in real estate busi-nesses and (2) perform more than 750 hours of service per tax year in a real estate business.

Real estate businesses include businesses that participate in rental, leasing, real property development, construction, acquisition, conversion, operation, management, or brokerage activities. But any services performed by a taxpayer in a real estate business as an employee will not be counted toward meeting the “real estate pro-fessional” participation requirements unless the taxpayer is also at least a 5-percent owner of its employer.

A taxpayer will be treated as mate-rially participating in the real estate activities that generate the rental in-come if the taxpayer: (1) provides at least 501 hours of service to the busi-ness during the tax year, (2) provides substantially all the services for the business (after evaluating participa-tion from nonowners), or (3) pro-vides at least 101 hours of service to

the business during the tax year if no other person provides more ser-vice to the business (after evaluating participation from nonowners). For example, a real estate professional who also individually owns 35 rental properties but hires a property man-ager and performs very few services related to the rental, operation, or management of the properties will not have materially participated in the activities that generated the rent-al income and may therefore be sub-ject to the new Medicare tax.

The real estate professional excep-tion is narrow, but many real prop-erty developers, property manag-ers, and brokers who own their own companies and also materially par-ticipate in the management and op-eration of their own rental properties will not be subject to the new Medi-care tax. This also means that the rental income for any taxpayer who is not properly classified as a real es-tate professional will be “net invest-ment income” and may be subject to the new Medicare tax.

Application to Entities Although the new tax applies to

individuals, but not to partnerships, limited liability companies, or corpo-rations, taxpayers that own real estate investments indirectly through an entity will not avoid the new Medi-care tax. With respect to corporations (including S corporations), the divi-

dends received by a shareholder will automatically be “net investment in-come” unless the shareholder mate-rially participates in the business (re-gardless of whether the corporation owns real estate or not) and may be subject to the new Medicare tax. Sim-ilarly, the partnership rental income allocated to a partner who does not materially participate in the rental business of the partnership will be “net investment income” and may be subject to the new Medicare tax.

Investment Income Includes Gain on Sale of Real Estate

In addition to applying to “gross” rents after deductions, the new Medi-care tax also applies to the net gain on the disposition of any real prop-erty not held in a real estate business. This means that gain on the sale of a principal residence may be subject to the new Medicare tax to the ex-tent the gain is not sheltered by the principal residence exclusion. This also means that the gain on the sale of appreciated rental property may also be subject to the new Medicare tax unless the gain on the sale is not

recognized, for example, as a result of a taxpayer’s completing a Section 1031 exchange.

Tax-Saving Ideas The new Medicare tax casts a wide

net to tax rental real estate income and capital gains on sale. Individuals who anticipate being subject to the new 3.8 percent Medicare tax may want to engage in advance tax plan-ning before the tax becomes effective, for example, by selling appreciated real estate in 2012 to avoid the new Medicare tax or investing in tax-free income-producing assets instead of rental properties. The new Medicare tax may provide an additional incen-tive for taxpayers to complete a Sec-tion 1031 exchange after January 1, 2013.

For further information about Medicare tax and real estate income, contact Jeneé Hilliard at (503) 205-2505 or at [email protected].


VALLEY

PublisherWill Johnson • [email protected] EditorAndrea Coulter • [email protected]

Circulation ManagerAndrea Coulter • [email protected] Designer

Andrea Coulter • [email protected]

Advertising SalesWill Johnson • [email protected]

Terry Hokenson • [email protected] Shelley

Loring • [email protected]

STAFF

Serving the Eugene, Salem, Albany, and Corvallis

Multifamily Housing Industry More than 6,000 Distributed Monthly www.TheLandlordTimes.com The statements

and representations made in advertising and news articles contained in this publication

are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publica-

tions does not, in any way, omport an endorsement of or support for the prod-

ucts or services offered.The LandlordTimes - Valley is produced

monthly and is published by Professional Publishing Inc.

An Oregon Corporation.PO Box 30327

Portland, OR 97294-3327. (503) 221-1260 • (800) 398-6751

Copyright 2013. All rights reserved.

Please Visit us at

www.TheLandlordTimes.com

Happy New Year! I hope you and your family had a safe and wonder-ful holiday season.

As we begin this new year, your state organization, ORHA (Oregon Rental Housing Association) is focused on the upcoming Oregon Legislative Session which begins on January 14th. Landlord- Tenant Coalition meetings have continued with discussions on topics such as: renter’s insurance; screening and the use of past criminal arrest, convic-tion and eviction records; extension of the statute of limitations to pursue tenants owing money; and other issues vital to Oregon landlords’ interests such as our proposal for return of non-compliance fees for

many tenant violations. Our most recent Landlord-Tenant Coalition meeting was held on December 18. Please read my Legislative Update on page 15 in our newsletter. As your State Legislative Director, I plan to provide updates to you on legislative activity during the 2013 Oregon Legislative Session.

Our comprehensive Fair Housing Workshop was held on Saturday, December 1st. This workshop, with instructor Diane Hess, Education Director, Fair Housing Council of Oregon (FHCO), provided members a fun and informative opportunity to learn, (from FHCO’s perspective, the agency that investigates tenant com-plaints) about landlord responsibili-

ties in fair housing issues. Please remember that a mistake made in a fair housing issue can cost a landlord thousands of dollars. If you have an issue in any way related to fair hous-ing, you should call the Helpline at 541-242-2850.

We took a break from our week-day workshops during December but you’ll see on page 5 in our news-letter that we are back to our sched-ule of two weekday workshops per month. Members attending these workshops find that the small-group setting provides them with a great opportunity to ask questions and share personal landlord experiences. With limited seating, pre-registration is required. Please see page 5 in our newsletter for registration informa-tion.

We had a fantastic turnout at our November general meeting for our featured speaker, Attorney Allen Gardner. Allen walked us through those dumb mistakes that landlords make that will mean the difference between winning or losing in court. Please join me in thanking Allen for sharing his many experiences with us and for his willingness to answer so many members’ questions. Thanks also to our Affiliate Spotlight speak-er, John Stoeker of Regional Dryer

Vent Cleaners, for his raffle items. If you own or manage rental units

in the City of Eugene, please note that the Eugene City Council Agenda for January 28th includes a vote on the proposed Social Host Ordinance. You can read this proposed ordi-nance on the City of Eugene website at www.eugene-or.gov/. Please read the ordinance and share your opin-ions on this ordinance with your Eugene City Counselor.

Please join us for our first meeting of 2013 on Thursday, January 24th. Our featured speaker will be Marcie Hale, CPA of McElhany, Shotola, Merwin & Hale, CPAs. Whether you are a member with specialized land-lord accounting software or a land-lord who has historically scrambled to fill out tax paperwork from receipts ‘filed’ in a pile on your desk, you’ll gain valuable tips and insight from Marcie’s presentation, “Tax Preparation and Planning for Landlords.”

We’ll see you on January 24th!

Jim Straub, President

President • Jim Straub Vice President • Michael Steffen Secretary • Scott Smith Treasurer • Pat Costello

205 W. 10th Avenue, Eugene OR 97401 (541) 485-7368 (541) 284-4052 info@

laneroa.com

Board Members: Dennis Casady, Dennis Chappa, Robei Ellis, Devin Gates, Eric Hall, Tia Politi

RENTAL OWNERS ASSOCIATION

A Message from Your President …



VALLEY

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The LandlordTimes - Valley • January 2013 5


VALLEY

ow that the holidays are behind us, anyone who was

not able to move before they rang in the New Year will be resuming their search for a new home. Follow up is the key to closing the sale when no decision is made on the first visit. However, many leasing people still hesitate to keep in contact with their prospective renters or make call backs on the appointments that are no shows. This question may shed some light as to why this occurs:

Q: I know I should probably fol-low up more on my guest cards and also call people who make appoint-ments and don’t show up, but calling people back makes me feel like I’m “bugging them.” If they’re really interested, won’t they just come back or call me?

It does seem “logical” that a person interested in your community will just naturally get back in touch with you. However, there are a multitude of options out there right now. Besides, renting an apartment is a lot of hard work, and it’s also a MAJOR buying decision. People who are looking for a new home NEED YOUR HELP! They

will continue to need assistance until they reach a decision about where they want to live.

If you think back to the last time you made a major purchase, it’s likely that the salesperson helped you with your buying decision. It was probably their knowledge of the product, com-bined with pointing out how it would meet your needs, which were some of the determining factors in your deci-sion. This would require the salesper-son to have excellent product knowl-edge, establish ALL your needs (i.e. size, style, color preference(s), budget constraints, etc.) and then close the sale. However, if you weren’t quite ready to decide and then looked at and considered other options, you may have forgotten about some of the benefits of the product you looked at initially. This is where the follow up work comes in. The salespeople who keep in touch with their prospects can continue to sell the benefits of their product long after the prospect has left the sales floor. This will deepen the relationship that was established so there is a sense of commitment on both sides.

Now imagine your most recent prospective renters and the circum-

stances causing them to relocate. Put yourself in their place and think about all the decisions they have to make as a result of their move. If you have an apartment at your community that will work for them and you are sin-cerely interested in meeting their needs, why wouldn’t you follow up with them? Of course if all you care about is just renting an apartment and not the person who will be living in it, then you’re right: You would “just be bugging them.” People can recognize a phony a mile away. On the other hand, people are also pretty good at detecting when someone sin-cerely cares about them and has their best interests at heart. The follow up work you do will come off as a true expression of your desire to meet the needs of your prospective renters, if you genuinely care about them.

If you have a question or concern that you would like to see addressed next month, please ASK THE SECRET SHOPPER by making contact via e-mail. Your questions, comments and suggestions are ALWAYS wel-come!

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Apartment ...continued from front page

Regroup…is this a new management trend? Not a chance! Regroup is sim-ply an opportunity to end one month’s business cycle, recap the performance at each property you manage and outline a plan of success for the new upcoming month. Why does it work? Because it allows each person on your team to as-sess their performance from the previ-ous month, and to make any necessary adjustments for the new month. Here’s how it works.

Scheduling and preparing regroup:

Regroup should be scheduled dur-ing the slowest time of each month and should start before your leasing office opens in the morning, if pos-sible. A solid and productive regroup takes about two hours and will require about one hour of preparation by your resident manager. Be certain to have a blank chalkboard or a standing easel for taking notes and keep distractions to a minimum. Regroup is also a time to build on the creative juices from each person on your team, so make regroup a special part of each month and allow for everyone to have equal time to share their feedback. Simply stated, there are no wrong questions or topics discussed at regroup and your team will respect and respond positively to this freedom.

Tip From The Coach: As the super-visor for your properties, it is critical for you to attend regroup and actively participate in them. Your preparation for each regroup should begin by re-viewing the agenda from the previous month with your resident manager, to assess if the to-do list from last regroup was accomplished. Then, review to-gether the new regroup agenda making certain your resident manager’s game-plan is consistent with your company goals and expectations.

Running the meeting: Each month’s agenda for regroup

should begin by reviewing the finan-cial information important to your company and its investors. This might include “actual” revenue and income versus budget, resident retention per-centages, collection issues or expense performance versus the budget. Then, have your resident manager address any problems experienced during the past 30 days or any upcoming issues that will affect the property. Next, map a calendar of activities that will enhance the performance for this property. This might include a monthly event to thrill your residents, a new marketing plan, or a special focus on your resident referral program. This part of regroup is where the creativity of your team really starts to roll and if you listen closely, you will

hear many “golden” ideas. Lastly, have your resident manager recap the team goals for the new month and be certain the meeting always closes on a positive note!

Tip From The Coach: As the supervi-sor for this property, take detailed notes during regroup, then send a brief memo to your resident manager recapping the day. Include in this memo a to-do list for the upcoming month, so your resi-dent manager will clearly know what is expected. Clear communication is the cornerstone of management success.

Meeting individually with your team:

At the close of each regroup, plan to spend another thirty minutes more with your resident manager to recap the day, cheer their success, and discuss the specific performance of each individual at the property. During this meeting ask your resident manager if he/she needs any additional support or train-ing to develop their skills or the skills of their team. This is the most important part of regroup as time spent develop-ing your team for future opportunity, will make for pro-active management which means you always have a sharp person ready to be promoted to the next position.

Tip from the Coach: In the same spirit of the individual meeting you have with your resident manager, ask him/her to have a similar meeting with each member of their leasing team. This will help to grow their skills as a leader and you will want to attend the first few meetings to be certain the agenda for the individual meetings are exactly as you expect. In fact, as a manager, always “inspect what you expect”. A good rule of thumb!

Wow! Such an important topic and so much to share! Incorporate regroup into your next 30 day business cycle and see for yourself how successful the time is spent! Need help planning your agenda? E-mail a quick note to [email protected] and the Coach will send you a sample agenda in ten min-utes. It’s easy! The Coach says so! Want to hear more about this important topic or ask some additional questions? Send an E-mail to [email protected]

and The Coach will E-mail back to you a free invitation to be a participant on a PowerHour conference call.

Author’s note: Ernest F. Oriente, a busi-ness coach since 1995 [29,760 hours], a property management industry profession-al since 1988--the author of SmartMatch Alliances--and the founder of PowerHour...[ www.powerhour.com and www.power-hourseo.com and www.pirmg.com ], has a passion for coaching his clients on executive leadership, hiring and motivating property management SuperStars, traditional and Internet SEO/SEM marketing, competi-tive sales strategies, and high leverage alli-ances for property management teams and their leaders. He provides private and group coaching for property management com-panies around North America, executive recruiting, investment banking, national utility bill auditing [ www.powerhour.com/propertymanagement/utilitybillaudit.html ] national real estate and apartment building insurance [ www.powerhour.com/property-management/insurance.html ], SEO/SEM web strategies, national WiFi solutions [ www.powerhour.com/propertymanage-ment/nationalwifi.html ], powerful tools for hiring property management SuperStars and building dynamic teams, employee pol-icy manuals [ http://www.powerhour.com/propertymanagement/employeepolicyman-uals.html ] and social media strategic solu-tions [ http://www.powerhour.com/proper-tymanagement/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia and is certified in the Xerox sales method-ologies. Recent interviews and articles have appeared more than 7000 times in business and trade publications and in a wide vari-ety of leading magazines and newspapers, including Smart Money, Inc., Business 2.0, The New York Times, Fast Company, The LA Times, Fortune, Business Week, Self Employed America and The Financial Times. Since 1995, Ernest has written 200+ articles for the property management indus-try and created 350+ property management forms, business and marketing checklists, sales letters and presentation tools. To subscribe to his free property management newsletter go to: www.powerhour.com. PowerHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by E-mail [email protected] or visit their website: www.powerhour.com



VALLEY

VALLEY

A Property Management RegroupHow To Do It And Why It Works! ©

By Ernest F. Oriente, The Coach

7The LandlordTimes - Valley • January 2013


VALLEY

Multifamily ...continued from front page

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sewer and garbage. In properties where landlords have been success-ful in billing utilities to tenants, the overall cost for these utilities has decreased. Tenants are more mindful of usage and report plumbing prob-lems and leaks more frequently.

Metro Multifamily Housing Association Fall Survey for 2012 provided the following information for Salem and vicinity: • 64 properties surveyed for a total

of 3912 units.• Non-smoking apartments: 47.3%• The average number of days vacant

for 2012: spring 28 days and fall 23 days.

• The average rent per square foot: .78

• Tenant paid utilities: water, 14.6%, heat 92.7% and garbage 12.9%.

• Landlord incentives: 8.8% Spring 2012, 4.9% Fall 2012.

Tenant demand for apartments has continued to be strong. This has prompted developers to begin con-struction of new apartment proper-ties in the Salem-Keizer markets. The following projects listed are just a sample of the new projects being built: Orchard Ridge 180 units, 100 units breaking ground on Wallace Rd, 30 units, townhouse style, in South Salem, 54 units on NE 45th, and proposed 100 plus units down-town Salem. Absorption of new units is expected to be strong.

Costar Multifamily Sales Comps for 2012: Salem-Keizer 27 recorded transactions.

Eleven (11) of these transactions were refinances with owners taking advantage of lower interest rates and in some cases restructuring the own-ership entities. Several of these trans-actions involved buying out existing partners. Sixteen (16) of these trans-actions were sales of multifamily properties ranging from brand new units to seasoned units.

The following are a few examples of transactions for 2012: The Sandalwood Apartments, 82 units, $44,817.00 per unit, built in two phases 1980 and 1990, sold for $3,675,000.00. Alpine Village Apartments, 53 units, $40,566.00 per unit, built in 1968 sold for $2,150,000.00. The Arboretum, 23 units, built 2009, $91,304.00 per unit, sold for $2,100,000.00. Ten units on Flying Squirrel Way NW sold for $65,000.00 per unit, year built 2000, sold for $650,000.00, originally built as condominiums, and this property was a bank owned deal.

Cap rates for 2012 recorded sales range from 6.67% to 9.0%.

Favorable interest rates and financ-ing packages are fueling investor demand for quality multifamily properties. As investors and institu-tions chase and acquire Class A assets in the major metropolitan areas, the availability of these types of assets is

decreasing. Competition for quality assets is high. Investors are begin-ning to look at secondary and tertia-ry markets to buy quality assets for their portfolios. This is a trend that is occurring nationwide. For the own-ers of large properties of 100 plus units, who have been considering a sale, this is an optimum time to offer your property for sale.

For copies of articles or report and surveys please don’t hesitate to call or email Anita Risberg, CCIM, HFO Investment Real Estate. 971-717-6336 or [email protected]

Anita Risberg, CCIM Senior Broker, HFO Investment Real Estate, Apartment Specialist

I have selected data from Powell Valuation 2012 Spring Apartment Survey, Metro Multifamily Housing Associations 2012 Fall Survey, CoStar for sales data and Commercial Investment Real Estate Magazine of the CCIM Institute for national trend information. I would be happy to share any or all of these sources with you if you will email me at [email protected] or call my direct number in our Portland office, 971-717-6336. It would be my pleasure to answer any questions you might have.

Advertise In The Landlord Times - Valley Circulated to over 5,000 Apartment

owners, On-site, and Maintenance

personnel monthly.

Call 503 221-1260

for more information.


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The Landlord Times - Valley - Jan 2013

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