The Multnomah County Commission has voted to add another 30 days to the time tenants have to apply for rent relief as there are more than 10,000 pending applications currently.
The commission, meeting in a virtual session, voted to approve an ordinance adding one month to the 60 days of protection approved by the Oregon Legislature in SB 278 before the statewide eviction moratorium ended on June 30. Tenants must apply for the rental assistance during the 90 day period and then have until February of 2022 to pay back rent.
Most of the applications for rent relief assistance in Oregon have come from Multnomah County.
The ordinance says, “Of the estimated 15,148 households who have applied for state-funded rent assistance, approximately 10,202 reside in Multnomah County. The average total annual amount of short-term rent assistance distributed in Multnomah County under pre-pandemic conditions was approximately $10 million. The County and its partners are now responsible for distributing almost $100 million, requiring a significant reorganization
and expansion of its systems. The scale of projected need as compared to other Oregon counties requires additional time for service providers to process applications,and to meet the legislative intent of Senate Bill 278.”
In terms of how landlords feel about the extension, Liam Frost, senior policy advisor, said he spoke with Deborah Imse, Executive Director of Multifamily NW who said she is opposed to the extension.
One property manager told the commission that the extension to 90 days would introduce more risk for landlords into the equation. She explained there are five main pots of money all with different requirements for tenants to access to pay landlords.
Tenants must provide their landlords with documentation that they have applied for the assistance, and must still pay all of their back rent by February 2022 to avoid being evicted.
The additional 30 days on top of the state’s 60 days was approved “to help ensure that all applications filed in Multnomah County can be processed on time. Also, many tenants who start applications abandon the application commissioners said.
Commissioner Susheela Jayapal said according to a study from Portland State there are an estimated 60,000 households across the state that say they cannot pay next month’s rent. She said there continues to be an overlapping public health and economic crisis.
“I am concerned that while the extension is necessary, it is still not sufficient,” Jayapal said. She said SB 278 protections for renters and payments for landlords is “complicated and confusing.”
“I sympathize whole hardily with landlords who are concerned our action will create further delay for them – especially small landlords,” she said but rental assistance will ultimately flow to landlords where they can get 100 percent of back rent from the landlord reimbursement fund.
Oregon SB 278 moves some of the burden from landlords to tenants, and tenants must provide to the landlord documentation verifying they are seeking rental assistance as attorney Brad Kraus explains here.
During nearly every month over the past year, executive or legislative discussions or actions were in motion to change Oregon landlord-tenant law in response to the COVID-19 pandemic. Couple these with the multitude of often different local laws enacted during those same months, and how anyone expected everyday landlords to keep up is unclear.
This past month was no different. The Oregon legislature, deciding the tenant protections they just enacted in Senate Bill 282 were not enough, subsequently passed Senate Bill 278.
This new law creates an opportunity for a tenant to put off any non-payment eviction notice, or enforcement action of the same, if one has been served, for 60 days if certain conditions are met. However, unlike previous tenant protections, the burden to invoke these protections is now properly placed within SB 278—on the tenant. Further, SB 278 makes up for some shortcomings in prior laws related to the Landlord Compensation Fund, correcting the same via this subsequent legislative action.
As an overview, Senate Bill 278 does not change the fact that July’s rent is due and owing on time. Senate Bill 278 creates an odd “if/then” framework related to tenant protections, depending on where a landlord is in the eviction process. To invoke the protections provided by SB 278, the tenant must provide to the landlord documentation verifying they are seeking rental assistance. This documentation can be provided through nearly any method to the landlord, including email or text message.
If a landlord receives this verification, then a 60-day stay to the process commences, and further action is either prohibited—or required—of the landlord. For example, if the landlord has not yet served a Non-Payment of Rent notice and documentation consistent with SB 278 is provided, the landlord is prohibited from serving that notice for 60 days. If no rental assistance is received for 60 days covering the amounts due and owing for that period and the preceding 60-day period, the landlord may serve a Non-Payment Notice thereafter, and no further stays may be invoked by the tenant.
If the landlord has served a Non-Payment Notice—or has commenced eviction proceedings—the tenant may still invoke the protections by providing the landlord documentation at any time, including at or before the first appearance. If this occurs, the landlord cannot continue with the eviction if it is filed, and the court must stay the eviction and schedule a new first appearance no earlier than 60 days later. If rental assistance is procured and the landlord receives the rent, the eviction must be dismissed. If rental assistance is not procured, the landlord may continue with the eviction process at the reset date.
The above protections properly place the burden on the tenant—not the landlord—to seek out, and provide verification of, rental-assistance efforts. This is one correction that was desperately needed, as prior versions of COVID-related laws required no proof, documentation, or evidence of economic hardship, and were ripe for abuse. As an appropriate concession for these protections, Senate Bill 278 also corrected compensation issues that were built into HB 4401 and the Landlord Compensation Fund. It retroactively compensates landlords the 20 percent unpaid rent they were forced to waive in conjunction with access to the Landlord Compensation Fund monies.
Far too often throughout the past year, the executive and legislative actions taken during COVID-19 placed burdens on landlords for a situation not of their making.
I spoke to many landlords over that time, and none took issue with assisting those who were actually affected by the pandemic. While it is unfortunate that the legislature enacted this law due to its inability to get rental assistance out the door, SB 278’s protections require the appropriate party to act to invoke the same. Further, it assists with making landlords whole, correcting HB 4401’s rent-waiver requirements.
About the Author:
Bradley Kraus, Portland attorney
Brad Kraus is a partner at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family-law matters. A native of New Ulm, Minnesota, he continues to root for Minnesota sports teams in his free time. You can reach him via email [email protected] or 503-255-8795.
How do you tell when a tenant has a routine maintenance request or a real emergency is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and he is not offering legal advice. If you have a question for him please fill out the form below.
Dear Landlord Hank:
What the tenant thinks is an emergency needing repair and the landlord considers an emergency repair are often two different things. How do you as a landlord decide what is a real emergency vs. just a pesky tenant request? –Sam
Dear Landlord Sam:
In the beginning of the landlord/tenant relationship, when I’m giving tenants their keys, I explain what is an emergency and who to call (not text or email).
An emergency is an issue that can cause damage or injury to human life or the property, like a fire, flood, loss of air conditioning in Florida in the summer, sparking electrical outlets or circuit breakers, etc.
If there is a fire, call 911 and then me.
If there is a flood (meaning water running outside the area it is supposed to be in, like a toilet-supply line leaking on the floor, not a toilet “running,” or a tub with water coming out around it, not a drip from the faucet), then CALL ME, not text or email as I’m usually driving, so I can walk the tenant through turning off the water to the property to limit damage to the building and its contents.
We take tenant maintenance requests seriously and the requests are handled as quickly as possible.
Sincerely,
Hank Rossi
Landlord Hank says, “In the beginning of the landlord/tenant relationship, when I’m giving tenants their keys, I explain what is an emergency and who to call (not text or email).”
Ask Landlord Hank Your Question
Ask veteran landlord and property manager Hank Rossi your questions from tenant screening to leases to pets and more! He provides answers each week to landlords.
Accuracy when landlords report rental information and eviction information, and accurate reporting by debt collectors and others is going to come under increasing scrutiny from the Consumer Financial Protection Bureau (CFPB) as the eviction moratorium comes to an end.
The agency is warning in a bulletin to landlords and others of their obligations to accurately report rental information and eviction information.
“As the federal eviction moratorium and other pandemic rental protections come to an end, the CFPB wants to protect families from being denied housing on the basis of inaccurate information,” the agency said in a release. “Inaccurate rental and eviction information on a tenant-screening report or a credit report can unfairly block a family from safe and affordable housing.”
Consumer Financial Protection Bureau warns landlords
The CFPB said it plans to look carefully at whether landlords, property-management companies and debt collectors are furnishing accurate information to credit-reporting agencies (CRAs) and complying with their dispute-handling obligations under the Fair Credit Reporting Act (FCRA). The CFPB plans to pay particular attention to whether data furnishers are reporting arrearages that include:
Amounts already paid on behalf of a tenant through a government grant or relief program; and
Fees or penalties prohibited by CARES Act section 4024(b) or other laws.
The bulletin also puts CRAs on notice that the CFPB will be looking at whether companies are:
Following appropriate procedures to include only accurate rental information in individuals’ consumer reports;
Reporting rental information that belongs to the consumer who is the subject of the report;
Reporting accurate and complete eviction information, including having reasonable procedures to include the disposition of the eviction, prevent the inclusion of multiple entries for the same eviction action, and prevent the inclusion of eviction records that have been expunged or sealed; and
Properly investigating when consumers report inaccuracies.
“Errors in your tenant-screening report shouldn’t hold you back from having a place to call home,” said CFPB Acting Director Dave Uejio in the release. “For families already struggling to make ends meet, an inaccurate report can be the difference between homelessness or settling into a safe and affordable home.
“Landlords and consumer-reporting agencies have clear obligations under federal law, regarding the accuracy of information reported about tenants, and to conduct timely investigations when consumers dispute information. They need to get this right. The CFPB will closely monitor their compliance, and we will use all the tools at our disposal, including enforcement, to protect consumers during this critical time.”
In the event the CFPB identifies CRAs or other data furnishers not meeting their obligations under the FCRA, the CFPB will take appropriate action to address violations and seek all appropriate corrective measures, including remediation of harm to consumers.
You can find the compliance bulletin on the Compliance Resources section of the CFPB’s website.
As of May 2021, an estimated 6.7 million renter householders were behind on their rental payments, according to the CFPB. Consumers contacting the CFPB reported financial distress caused by the pandemic. Many of these consumers reported that they were current on rental payments before the pandemic, only to fall behind after losing their jobs due to the pandemic.
The agency said consumers reported multiple issues with debt-collection practices related to eviction, such as receiving notices for outstanding account balances – in some cases for amounts higher than their rent payments – for apartments they had been evicted from earlier in the pandemic. Other consumers reported receiving collection notices for charges they viewed as questionable, such as fees for damaged property or outstanding utility balances.
Also the agency said some consumers have reported receiving debt-collection notices following an eviction for outstanding account balances for apartments they had been evicted from earlier in the pandemic. Other consumers reported concerns that their eviction would have detrimental effects on their ability to secure future housing.
Here are 6 ways to rid smoke smells from your rental units because sometimes despite a landlord’s best screening efforts and a property manager’s rules against smoking, you can still end up needing to remove smoke smells from a rental unit. Maybe you have no-smoking rules, and your tenant did not smoke, but had guests in the rental unit who did, so here are some ideas.
By Holly Welles
Your tenants just moved out, and instead of leaving a clean, fresh apartment behind, they’ve left a unit that reeks of cigarette smoke. The smell permeates every corner of the property and now poses a health hazard to neighbors and future residents.
Property managers may be discouraged by the damage that lingering smoke creates. Not only will it cost resources to repair, but it can delay apartment showings for new tenants. Fortunately, there are various ways to remove smoke smells and make an apartment or home livable again. Here are the critical moves to take.
1. Air It Out
The first course of action should be to open all the windows and doors and air out the unit. Portable fans on opposite ends of the apartment will push out stale air while simultaneously pulling in the fresh breeze. Allow them to run all day, if possible.
Landlords might also hang several bags of activated charcoal around the property to absorb odors. Expedite the process by using a few air purifiers as well.
2. Deodorize Carpets To Remove Smoke Smells
Remove smoke smells from carpets with baking soda. Sprinkle the white powder over the stinkiest areas and allow it to sit for a few hours before vacuuming.
This deodorizing method is generally safe for all carpets. However, it may not be strong enough to eliminate more stubborn fumes. In this case, property managers should hire a professional dry cleaner or replace the carpeting altogether.
3. Mop Hard Floors
Next, tackle hardwood and tile floors. Sweep the surface to remove dust and dirt. Then, apply a disinfectant and mop it up using warm, soapy water. Water should be replaced periodically so stinky ash and residue aren’t spread around the floors.
If a mop doesn’t do the trick, steam the floors to melt the tar and oils from smoke molecules. Otherwise, a professional cleaner might be needed.
4. Replace the HVAC Filter
Each unit’s HVAC filter should be changed every few months. However, after a smoker’s lease is up in your rental unit, replacing the filter becomes an absolute necessity.
Switching out the filter is simple, relatively affordable and will help eliminate odors left from cigarette smoke. Plus, it will allow the entire system to work more efficiently and effectively improve the unit’s air quality.
5. Scrub the Walls
The stale stench of ash and cigarettes can cling to the walls, too. In some cases, tar may even harden on the walls and discolor them. Remove both soot and foul smells by scrubbing walls down with a solution of white vinegar and warm water. Landlords can also use a mixture of ammonia and water, allowing it to sit for a few minutes before rinsing the walls.
For tougher stains, try trisodium phosphate (TSP). This is a cleaning product that is mixed into hot water, which you can then apply with a sponge or brush. It contains about 75 percent TSP and 25 percent sodium carbonate. This compound degreases the tars in cigarette smoke, making them easier to remove. If this method doesn’t work, priming and repainting might be necessary.
A note: Phosphates and phosphate detergents are banned in several states, because as they make their way into bodies of water, they can increase algae and bacteria growth, which reduces the amount of oxygen other wildlife may need. If you’re in an area where TSP is banned, look for low-phosphate substitutes, like Seventh Generation, Simple Green, Clorox’s Green Works, or Orange Power Cleaner.
6. Call a Professional Remediation Service
Sometimes, smoke damage is so severe that the stench has infiltrated every nook and crevice of the property. If this happens to be the case, it’s best to call in a professional. They’ll use stronger chemicals and industrial cleaning methods that a typical consumer simply can’t find elsewhere.
While hiring a professional cleaner may sound expensive, it’s best to think of it as an investment in the property’s success. After all, prospective tenants appreciate units that smell fresh and clean.
Guard Against Future Smoke Damage
Landlords can prevent further damage and smoke smells by screening potential renters before allowing them to sign a contract. They might also include a no-smoking clause in the lease agreement for the rental unit. Outline fines and additional cleaning fees to discourage guests from disregarding the rules.
By acting preemptively, property managers can avoid another situation where they have to remove smoke smells, and keep both current and future tenants happy and healthy.
The U.S Supreme Court in a 5-4 decision declined an appeal from landlords to end the CDC Eviction Moratorium.
The court action will leave the eviction ban in place until the end of July.
Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberals in the majority. Kavanaugh cast the pivotal vote, saying he was letting the ban stay in effect even though he thought the CDC had exceeded its power.
“Because the CDC plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application,” Kavanaugh wrote.
Dr. Rochelle Walensky, the director of the Centers for Disease Control and Prevention (CDC), earlier signed an extension to the eviction moratorium further preventing the eviction of tenants who are unable to make rental payments, according to a release. The moratorium that was scheduled to expire on June 30, 2021 is now extended through July 31, 2021.
This is intended to be the final extension of the moratorium, the CDC said.
“The COVID-19 pandemic has presented a historic threat to the nation’s public health. Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19,” the CDC said in the release.
Counter: Targeted relief works better than an eviction moratorium
The National Multifamily Housing Council (NMHC) said in a release that the “nationwide, one-size-fits-all, federal eviction moratorium is out of step with the significant progress made in controlling COVID-19 and restoring the economy.”
The NMHC said that “the pandemic has already shown that targeted, efficient relief works.
“As we transition away from unsustainable moratoriums, we remain committed to implementing workable solutions for renters facing housing instability and helping the country recover. NMHC looks forward to working with the administration on proactive, comprehensive solutions and highlighting the efforts our members have undertaken over the last year to support and assist their residents,” the organization said in the release.
Previously the council released a set of ideas, called industry principles, that it said offer proactive and practical steps housing providers can take to work hand-in-hand with residents and “demonstrate the good faith with which property owners and managers have supported their residents.”
By Chay Lapin
President of Kay Properties and Investments
NNN properties seem like passive investments but actually require regular management.
Overconcentration is a key risk when it comes to investing in NNN properties.
DSTs (Delaware Statutory Trusts) provide an alternative way to invest in NNN properties.
Diversification and true passivity are unique advantages of DST investments.
Frequently investors are seeking out reduced management and or passive real estate investments. Real estate owners are simply tired of the three T’s (Tenants, Trash, Toilets) and are looking for alternative options to consider.
One option that a lot of investors are being sold by their real estate brokers are Net Leased properties, which are commonly known as “triple net leases” (or “NNN”). Some Net Lease properties can be nearly 100% passive. Investors will want to carefully understand how the unique net lease is set up, as some leases may actually have active management responsibilities for building upkeep. A client will also want to keep a monthly check in to make sure that the tenant is abiding by their net lease structure and that they are actually paying the various bills (e.g. Common area expenses, Property Taxes and Insurance). It is not uncommon for a large corporation to have a glitch and be late paying property taxes, and this could affect your building if not caught in an appropriate time frame.
If an investor is going to be placing their entire 1031 exchange proceeds or cash allocation in one net lease property, there are key points that an investor should understand prior to investing:
Concentration Risk – Placing all of your eggs into one basket
Tenant bankruptcies and restructuring – Lease Rejection
Store Closures – “Dark Stores”
1031 exchange closing risk
Asset and property management responsibilities – unpaid tenant taxes, collecting reimbursements, refinancing, lease term burn off and value erosion, lease renewal and negotiations, legal expenses, insurance issues, etc.
Another option for investors that are looking for a 100% passive investment is a DST (Delaware statutory Trust). A DST is an entity that can hold investment real estate structured to take 1031 Exchange monies and after tax dollar investments. DST properties can be used as opposed
to NNN properties but still providing access to net lease type properties (FedEx, Amazon, Walgreens, CVS and many others).
Potential Diversification – Don’t put all your eggs into one basket! It is important to note however that diversification does not guarantee protection against losses or guarantee profits.
You can close potentially on a DST in 2-3 days – helps to potentially reduce 1031 exchange
closing risk.
Non-recourse financing with DSTs as opposed to partial and full recourse with NNN
properties.
Back up – Use a DST as a backup ID in case your NNN deal falls apart.
DST as a home for leftover funds to cover your exchange and avoid boot.
Professional asset and property management in place.
DST examples:
DST # 1
A portfolio of 15 corporate backed FedEx distribution facilities, Walgreens pharmacies and CVS pharmacies located throughout the country.
DST # 2
A portfolio of 20 single tenant net leased properties to tenants such as CVS, Tractor Supply, McDonald’s, Advanced Auto Parts, Auto Zone, DaVita Dialysis, Dollar General and Dunkin Doughnuts.
DST # 3
A single tenant VA Medical Hospital on a 20 year lease with the General Services Administration (GSA) – The United States Government
Potentially protect yourself and your family by investing in multiple DST’s. This allows your 1031 equity to be diversified over 100 to 300 million dollars worth of institutional quality real estate, instead of buying one 1-3 million dollar net lease property and having to actively manage it yourself.
About Kay Properties and www.kpi1031.com
Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market. Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over $21 Billion of DST 1031 investments.
This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services. Member FINRA/SIPC. Kay Properties and Investments, LLC and Growth Capital Services are separate entities.
Rental markets across the United States have been upended by the COVID-19 pandemic. The struggling economy has shown signs of slow recovery, but renters remain unemployed with months of unpaid back rent.
However, an innovative program in Los Angeles County provides stability and support to property owners by matching those who have vacant units with tenants who need housing. Powered by PATH and backed by Los Angeles Homeless Services Authority (LAHSA), LeaseUp has worked with more than 600 property owners and managers across South California since 2018.
The majority of LeaseUp tenants use government subsidies, like Section 8, to cover a significant portion of rent. While government-backed housing subsidies offer a solution to the monthly rent check quandary, signing onto this kind of agreement with tenants can raise a variety of concerns among property owners and managers. See how LeaseUp addresses these questions head on.
Consistent Rental Collections
Property owners and managers can count on LeaseUp for monthly checks at a fair market rate. Unlike open-market tenants, LeaseUp’s tenants have secured income through their government-backed housing programs.
Dedicated Support
Upon entering the program, every property owner or manager is assigned their own dedicated housing specialist. LeaseUp offers 24/7 concierge support, which includes handling inquiries and scheduling viewings, assistance with applicant paperwork, and mediation if any issues arise with tenants.
Protection Against Property Damage
One of the great benefits of working with LeaseUp is protection for property managers and owners. LeaseUp can cover property damage and unpaid rent up to $10,000 after the security deposit (covered by the agency responsible for rent) has been applied.
Tenant Support
LeaseUp tenants have been carefully vetted by experienced service providers, and all tenants must be enrolled in a program that provides relevant supportive services. Prior to move-in, tenants meet with supportive services to discuss their specific needs. From there, tenants are connected to resources, such as job training, healthcare, mental health counseling or addiction treatment, and education.
Interested in applying? LeaseUp is open to property owners and managers throughout Southern California. The program works with properties of all sizes, including empty rooms and ADUs. In other words, it’s a great way to transform your extra space into a mortgage payment.
Sign up at Leaseupla.org today to see if you’re eligible to participate.
LeaseUp is a PATH initiative that partners with property owners and managers to fill vacancies and help people at risk of homelessness stay housed. By providing an easy-to-use online listings portal, consistent support, and financial incentives, we ensure a smooth, streamlined process for property owners and managers, service providers, and people seeking housing.
*Please note that leaseupla.com is a commercial real estate company and is in no way affiliated with LeaseUp powered by PATH.
The nation’s largest third-party operator is testing a more affordable apartment smart home technology to integrate with other systems.
By Paul Bergeron
Smart-home technology is generating greater efficiencies for apartment residents and their communities’ onsite teams alike. Innovation in this space has created a surplus of providers with a variety of solutions and price points.
Given all the options, multifamily C-suites wonder: If only the decision on which provider to choose was made more efficient.
The global rental-housing company Greystar has both recognized the necessity of offering competent smart-home technology and has discovered an interesting option in a growing field of emerging providers, said Andrew Livingstone, its executive managing director.
“The pandemic created a large shift in how we operate, and it moved us forward a decade,” Livingstone said. “It changed how we think about operating apartments. It forced us, out of necessity, to think more futuristically, given the circumstances.
“It firmly created opportunities in apartment-access technology, making how we enter our apartment homes a fundamental cornerstone. We’re seeing unprecedented changes with access given recent transactions involving companies that offer this and their valuations.”
Livingstone said access and smart-home technology are now an “absolute must-have,” not a “nice-to-have:” “It won’t just be in some apartment buildings; it has to be in all the buildings, he said.”
There are several players in smart-home tech technology – but there is not a clear winner, he said.
“It’s an exciting time as brands continue to innovate their services to establish themselves as leaders in this space,” he said.
Greystar is working with owners who want to try this, Livingstone said. Greystar has been the largest third-party management company in the country for 11 years running, “and right now we know that we do not have as much of this technology in our portfolio as we would like.”
Livingstone said his team realizes it needs to evolve to serve the needs of its residents, clients “and the ever-changing times we live in.”
For example, “We need to find out what smart-home technology platforms integrate best with the various components (thermostats, lights, window blinds, etc.,” he said. “What kind of battery life these systems have; what kind of after-hours service we can provide; and most importantly, how this technology can facilitate greater convenience for prospects wanting self-guided tours?”
iApartments was chosen to deliver smart-home technology to 2Bayshore, a 367-unit community built in 2015 and one of the premier buildings in the Tampa commercial business district, a popular neighborhood for young professionals.
No IoT Dedicated Wi-Fi Networks Necessary
The breakthrough aspect of the technology is that each unit is equipped with the proprietary 4-in-1 smart-hub thermostat designed for 24/7 connectivity. The system allows communities to have smart-home technology without the property (or its owners) having to invest in dedicated IoT Wi-Fi networks, which can cost from $600 to $1,000 per door.
2Bayshore’s system’s ability to provide smart-home technology access through the apartment home’s thermostat gives each unit water-leak detection and additional plug-ins for lighting and other connected devices.
“These are the things our residents want,” Livingstone said.
2Bayshore retrofitted with an enterprise smart-home platform in a move to help it compete with amenities offered at nearby new apartment developments. With existing apartment communities playing catch-up in this way, cost and intrusion have become key factors.
Installation at 2Bayshore did not require high-voltage power or Wi-Fi infrastructure, so the transition was of minimal disruption to residents, and without any damage to the physical structure.
“Many of our clients don’t have the capital or budget to invest in an intelligent apartment program,” Livingstone said. “Those kinds of networks can be expensive, and we’re finding this system works really well out-of-the box. I’ve seen it in action. I’ve spoken to our onsite teams. This checks all the boxes without having to make additional Wi-Fi investments.”
Calculating Net Operating Income
Company founder Dave Magrisso has more than 20 years’ experience in multifamily onsite products; he played the lead role in one of our industry’s first amenities as a service (AaaS) – Valet Waste (now Valet Living) – and understands how additive features and services represent value to residents and property owners. It’s an economic model he used during due diligence on smart-home technology installation benefits.
Magrisso shows that a 350- to 400-unit garden-style community could potentially bring $118,000 in additional annual net operating income (NOI) based on a $35 per month smart-home rent premium. This would increase the overall asset’s net value by roughly $2.3 million based on a five-percent cap rate.
Furthermore, using $2,200 per month as the average rent, this will could create an estimated $150,000 total increase in NOI based on modest numbers of new leases signed because of the amenity and improved retention rates.
Why Water-Leak Alerts are Crucial
Like many communities, 2Bayshore is mostly made of concrete, and concrete can present moisture issues. As part of 2Bayshore’s smart-home package, three wireless smart water sensors were placed around the residence, plus a built-in humidity sensor was placed in the thermostat, which automatically sends emergency alerts to both the resident and maintenance team when these sensors detect water or moisture.
These sensors discover slow leaks, giving 2Bayshore a preventative solution instead a reactive one.
Installing leak-detection alert systems in apartment communities (they are required in some markets) has resulted in less wear-and-tear on the apartment home and reduced maintenance work orders.
The system’s float-switch alert is saving maintenance technicians 30 minutes per HVAC system repair event, and is helping to decrease overall work orders related to clogged HVAC drains. (Clogged HVAC drains represent approximately 80 percent of HVAC-related work orders at communities.)
2Bayshore residents also can access their smart-home system’s energy management capabilities by controlling their home temperatures from anywhere through an app on their phone.
Once inside the apartment, residents experience a lifestyle upgrade by using their smart wall plugs to control things such as lights, coffee makers and personal devices.
Cutting Costs by Not Cutting Keys
That resident app also is the key to activating the community’s smart-lock access for renters or to generate temporary guest codes for deliveries and other common services such as dog-walkers or package delivery.
Physical keys are not only out of date, but can easily be replicated and used to enter the property without consent. Common places to find a key (under the mat, under the flower pot, inside the fake rock, or lock boxes) may be unsightly or not allowed on some properties.
The access system also has helped 2Bayshore save on expenses and staff time. The company was able to cancel a current contract to manage its key tracking, saving it $2,940 per year along with eight team hours per month needed to cut keys.
There are times when onsite teams need access to every unit in a community, such as during fire inspections. In that case, at 2Bayshore, it required 367 keys to be pulled to ensure easy access into each unit. There are security issues with tracking the keys, and knowing that keys are easily copied creates a significant liability for the management team.
Needing to access various apartments approximately 150 times per month, the smart-access system saves its onsite team roughly 456 hours per year in service time.
Livingstone said as he continues to implement these technologies at more communities, and the onsite teams work with it more, “we are able to provide valuable feedback that helps smart-home technology providers improve the quality of their offerings.”
About the author:
Paul Bergeron
Paul Bergeron has been reporting on the apartment industry since 2002 and served 20 years as editor-in-chief for the National Apartment Association’s UNITS magazine. He currently is editor of his LinkedIn media platform, Thought Leadership Today, and can be reached at [email protected].
How can you help out a tenant with bad credit is is the question this week for Ask Landlord Hank. Remember Hank is not an attorney and he is not offering legal advice. If you have a question for him please fill out the form below.
Dear Landlord Hank,
My daughter and I have relocated to Lubbock, Texas, for her job. We have been having a hard time finding a place to rent because her credit score is low; while mine is decent, I don’t make three times the rent. Is there anything someone can do for a person in this situation? Miranda
Hi, Miranda,
Owners of rental property are very concerned now about tenants being able to pay the rent, as so many people have been harmed by the pandemic, with loss of jobs and the closing of so many businesses.
You want to make yourselves look like a good bet to a landlord.
You want to be the candidates about whom the owners won’t have to worry about being able to pay the rent. If your daughter has poor credit, which means she hasn’t paid her bills, you can offer to pay the last month’s rent up front so the owner will feel more comfortable.
You can point to your great rental history (if you have that).
You can try to rent something that is a third of your gross income. Or you may need to ask someone to co-sign for you, so the owner has one more person with good credit to rely on for rent. This could be a challenge for you as you are asking an owner to take a risk on you and your daughter when your daughter has shown that she is not a good risk.
Best of luck.
Sincerely,
Hank Rossi
Landlord Hank says for a tenant with bad credit, “you may need to ask someone to co-sign for you, so the owner has one more person with good credit to rely on for rent.”
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