Buying, selling and operating apartments in Portland

Should I Self-Manage? – Questions

14 August 2018
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I own apartments and get asked if this is something I should do.  Instead, I think it’s better if you review what a property manager does and then determine if this is something you want to do.

Plusses:

  • Cost savings – Each situation is unique, but for a market-rate property, you’re probably looking at saving 8% of gross income (13% for LIH due to compliance paperwork).
  • Consistency – You’ll be there from the time you buy it until you sell it.  That is, no rotation of staff.
  • Control – Since you’ll be more involved, you can watch expenses like maintenance closer.  This assumes you’ll have a property management program that can track account receivable and payable with some degree of precision.

Minuses:

  • Changing rules – Portland is gaining a discomfiting expertise in creating new rules.  PMs, as part of their job, keep updated on all of this in addition to existing fair housing laws.  As a landlord, if you go to court (e.g. a FED), you may not even get one mistake and tenants are usually allowed a lot more latitude.
  • Marketing – Half of the tenant’s interest is still from drive-bys.  Is someone onsite to greet them?  Having a show of presence also serves as a check on bad behaviors by tenants and keeps your property attractive to tenants.  Can you do ongoing rent surveys to make sure you’re at a competitive price?
  • Recruiting tenants.  A PM will have more advertising than a CraigsList ad, including WEBsites, signage, print magazines.  They should also have a system to track applicants for feedback to you.
  • Liability shield – Having a state-licensed operator as the first contact makes it safer for you and reduces your liability exposure.
  • Handling Emergencies.  Tenants can call at any time for even minor annoyances.  With a tightening market, your response affects perceptions
  • Handling CapEx – Usually contracted out, but doing things in a timely manner works in the long run.  Waiting on moisture invasion issues only makes them more expensive
  • Handling maintenance – Once you get >50 units, you probably need staff to handle this.  The tendency of owner-operators is usually to delay maintenance.
  • Turnover – Can you do this in a timely manner?  With a tightening market, downtime may mean lost opportunity.
  • Accounting – While interfaces like AppFolio are making this easier, someone needs to do data entry and bill-paying.  In addition, a good accounting system can serve as a forensic device to find out where you not making money.  IF YOU CANNOT MEASURE INCOME & EXPENSES – YOU CAN’T MANAGE THEM.

I’m not discounting 3rd party management, however, for most owners, the 10%+/- cost is probably worth it.  However, you shouldn’t abdicate all of your responsibility in managing.  If your main concern is the size of your monthly check, you are probably missing income.

This means you need to understand where your rent money is going.  Sitting with your manager and setting goals (i.e. what are the 3 things we’re going to do this month to increase NOI), gives them guidance, help you understand what issues are with your property and defines what stops you from making more money.  The value of your apartment (whether you hold or sell) is directly related to your NOI.

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Portland Apartment Sales – Aug 17

28 September 2017
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To download the individual sales report, right-click the link below and “Save As”:

<<<Portland Apt Sales – Aug 17 vs Aug 16 >>>

Highlights:

  • Gross sales dollars Aug 17 YTD = $919M is a 28% DECREASE over Aug 16 YTD = $1267M
  • $/unit Aug 17 YTD = $172K is a 26% INCREASE over Aug 16 YTD = $137K.
  • $/SqFt Aug 17 YTD = $198.21 is a 26% INCREASE over Aug 16 YTD = $157.37

What saved Aug 17 sales was one large transaction in Hillsboro that accounted for 62% of the total sales for the month.  Inventory is starting to grow.  However, properties priced at a premium to market are sitting.  If you’d like a financial analysis / valuation using real numbers contact me. 

If you’d like more information on:

– Free financial analysis of your property, eMail me for a SAMPLE report.  It will be very helpful if you’re making decisions about futures or operations.

– Details/background on individual sales in the report or a breakdown by neighborhood

– Free copy of our 80-page book – Buying, Selling and Operating Apartments Using Financial Analysis

– A very useful financial analysis of your property, call.  It will include I&E comparison to neighboring properties along with recent sales and rent comparables.

Please contact me:

Steve Morris | Vice-President
IMG Northwest
1234 SW 18th, Suite 102
Portland, OR 97205
Phone: 503.970.4593 
steve@imgnorthwest.com | www.imgnorthwest.com
OR License # 200202054 | WA License # 24512

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


Why do I Need a Property Manager and How do I get the Most Out Of our Relationship?

12 September 2017
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Property management serves a vital function and while you can do it yourself and save a noticeable amount of fees,  here are some questions to ask yourself, in order to see if it’s something you want to do on your own:

  1. PAPERWORK – With all of the laws in place (and more coming) most will require more paperwork and proper notice to tenants.  Unfortunately, with a relationship between tenant and landlord that is growing more adversarial, you’ll need to understand what you are required to do and deliver notice tenants in a legally acceptable way.  Do you keep up with the rules and regulations constantly?
  2. TIME – It does take time and effort to pay bills, deliver notices, respond to maintenance items and make a plan on growing your NOI.  You’d be the most motivated individual for your property, but are you willing to invest the time from your other activities? 
  3. CONTRACTING – Some management companies have services like maintenance and billing in house.  In any case, you need to understand whats required to keep a property in good shape (which attracts good tenants) and just doing the day-to-day things (e.g. paying bills and collecting rents).  Do you have the organizational skills to manage this?
  4. TENANT MANAGEMENT – You’re striving to keep a cast of tenants that live well together and respect your property and other tenants.  This requires a lot of observation and then learning how to deal with bad actors.  Some properties require a major amount of effort to stabilize and get a good population in if things have gone sideways.  Again, do you have the time and experience to do this?
  5. PLANNING – While the state requires fee managers to give you a full and complete accounting of funds, on a small property, this can be a daunting stack of paper.  An ongoing conversation with your property manager should be on how to separate signal from noise, for example asking: “What are the 3 measurable things we’re going to do this month to increase NOI?”

If you’re new to apartment ownership or deal with low-income housing, hiring an experienced manager can be cheap tuition and train you on what to do or understanding what needs to be done running an apartment.

Steve Morris | Vice-President
IMG Northwest
1234 SW 18th, Suite 102
Portland, OR 97205
Phone: 503.970.4593 
steve@imgnorthwest.com | www.imgnorthwest.com
OR License # 200202054 | WA License # 24512

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


City of Portland Landlord Training – Spring 2017

21 April 2017
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I apologize for the short notice, but this is a very good training for anyone that runs properties in the Portland area.  It is all day, however, very well worth it since it’ll go over rules that are in effect today.

Unfortunately, due to the changing landscape rule changes will be a way of life for landlords anywhere.

To apply go to:

http://www.PortlandOregon.gov/BDS/LandlordTraining

I’ve attached a list of topics and app form for download:

CoP_LandlordTraining_Topics_Spring17

CoP_LandlordTraining_Application_Spring17

Steve Morris | Vice-President
IMG Northwest
1234 SW 18th, Suite 102
Portland, OR 97205
Phone: 503.970.4593 
steve@imgnorthwest.com | www.imgnorthwest.com
OR License # 200202054 | WA License # 24512

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


Rent increase notices from a lease to M-T-M

17 August 2016
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Cliff Hockley of Bluestone & Hockley has authored an article on you can raise rents if you let a lease roll over to a month-to-month tenancy.  To download, right-click the link below and “Save As”:

<<<WhenCanLandlordsRaiseRentOregon_10Aug16>>>

 

Needless to say a landlord needs to exercise caution with rent increases.  The article goes thru the current requirements for rent increase notices for increases.  A lot of these may need case law to resolve

Excerpted from the article intro:

“Many of our readers have expressed confusion over when a landlord can raise rent in Oregon anymore.  Specifically, they have asked us for help understanding how month-to-month rent increases should be handled after House Bill 4143 amended the Oregon Landlord Tenant Act.” 

Steve Morris | Senior Advisor
SVN | Bluestone & Hockley
9320 SW Barbur Blvd, Suite 300
Portland, OR 97219
Phone: 503.970-4593 | Fax: 503.222.6459
steve.morris@svn.com | www.svnbluestone.com
OR License # 200202054 | WA License # 24512

All Sperry Van Ness®Offices Independently Owned and Operated

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


City of Portland – Landlord Training Guide

10 June 2016
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On 16 May 2016, the City of Portland a day-long seminar on operating apartments in Portland.  These are annual events, free and well worth your time if you are an owner in or out of Portland.  They are annual events (usually in the Spring).  I will send out an eMail or can give you contact info on request.

To download the 100-page book from the seminar, click the link below and download:

https://www.portlandoregon.gov/bds/article/96790

Contents of the manual:

  • Preparing your Property
  • Portland Maintenance Code
  • Applicant screening
  • Rental Agreements
  • Ongoing Management
  • Signs of Drug Use
  • Crisis Resolution
  • The Role of Police
  • Appendix with forms and contacts useful to operator

 

If you’d like a Free copy of my 80-page book – Buying, Selling and Operating Apartments Using Financial Analysis

Please contact me:

Steve Morris | Senior Advisor
Sperry Van Ness | Bluestone & Hockley
9320 SW Barbur Blvd, Suite 300
Portland, OR 97219
Phone: 503.970-4593 | Fax: 503.222.6459
steve.morris@svn.com | www.svnbluestone.com
OR License # 200202054 | WA License # 24512

All Sperry Van Ness®Offices Independently Owned and Operated

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


Oregon / Portland New Rules for Apt Owners

25 November 2015
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Please download the PDF of a presentation by Leah Sykes of Hahs & Bittner on rule changes that will affect landlords in 2015 and 2016

<<<2015 Changes to Oregon Residential Landlord_19Nov15>>>

Portland backlash – City of Portland enacted a 90-day notice rule for rent increases >5% and no-cause evictions effective 14 Nov 15.

In addition, the state of Oregon has made changes effective 1 Jan 16.  Changes will affect:

  • Penalties
  • Damage assessments
  • What is a bedroom (don’t laugh)
  • Waivers
  • Timing of notices

If you’d like more information on:

– Details/background on individual sales in the report or

– A Free copy of our 80-page book – Buying, Selling and Operating Apartments Using Financial Analysis

Please contact me:

Steve Morris | Senior Advisor
Sperry Van Ness | Bluestone & Hockley
9320 SW Barbur Blvd, Suite 300
Portland, OR 97219
Phone: 503.970-4593 | Fax: 503.222.6459
steve.morris@svn.com | www.svnbluestone.com
OR License # 200202054 | WA License # 24512

All Sperry Van Ness®Offices Independently Owned and Operated

For the Oregon Real Estate Agency Pamphlet click here.
For the Washington Real Estate Agency Pamphlet click here. 


Multnomah County Weatherization Funds for Apartments – Sept 10

16 September 2010
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For apartments located in Multnomah County there are some very attractive grants available. (more…)


Apartment Operations Metrics

17 April 2010
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First-level financial performance metrics (more…)


Financial Measures

17 April 2010
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What are the major metrics used to determine an apartment’s financial performance? (more…)