Establish Policies for Smooth Operations

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Every business, large or small, is confronted constantly with situations and problems that demand decisions. One way of handling this decision- making responsibility is with policies, which are prepared answers to anticipated problems. Some of these policies will eliminate many problems in the first place. Others will permit recurring problems to be dealt with swiftly and competently.

The development of proper policies is critical to the smooth functioning and successful marketing of multifamily housing. Every property management organization needs to have policies. Even a one-person management operation needs them, because it will face the same problems that the large management company faces. For the large company with hundreds or thousands of units to manage, problems are much the same in kind; they simply are more numerous. Without policies, management would have to make decisions on a case-by-case basis. Not having policies would not only lead to chaos and be time consuming but also produce inconsistent results.

Policies help to eliminate all this. They clear the air. Policies let all persons involved know where they stand, what’s expected of them, and what will be done when something goes wrong.

The right policies permit the scheduling of management activities on a routine basis and thus enable the manager to concentrate on the really demanding aspects of the business. Certainly policies have to be developed in accordance with the owner’s goals and objectives, but the best Policies are shaped by the expertise of a professional property manager.

With policies, it is not necessary to spend time constantly reinventing the wheel, so work becomes more efficient. Once a pattern has been set, it can be followed until something occurs to indicate the policy is no longer useful.

Yes, policies should be reviewed and changed when necessary. Policies are guidelines, not straitjackets. It is not possible to anticipate every contingency. From time to time, you will encounter problems that cannot be dealt with unless policies are bent a little or changed entirely. But for the most part, policies will save you the trouble of making time consuming decisions on an individual basis.

Policies are also important because they compel you to study your business and understand it thoroughly. Good policies cannot be made until you know everything about your business. When taking over a property for the first time, you must do a lot of creative thinking—just like a chess player does—to plan moves and consider alternatives.

Policies are important not only for you, the manager, but also for rental agents and the maintenance staff, prospects and residents in the building, as well as the owner. Each has a right to know what to expect. The time to examine those expectations is before a crisis erupts when there is time to reach a cool, unimpassioned decision rather than being forced to act in haste.

To be useful, policies should be in writing and made available to every one concerned. When policies are changed, these changes should be communicated to all appropriate parties. Confusion can he prevented by dating your printed policies and including revision dates on all changed pages.

Policies should be reasonable and enforceable. The manager’s position will be weakened if policies are established that cannot be enforced, and he or she will appear dictatorial if the policies are unreasonable.

You do not have to rely entirely on your own ability to anticipate problems. In the beginning, property management had to innovate, because there was no history of professional expertise. You are more fortunate since you can learn from the experiences of others.

The following discussion will focus on some policies that ensure high levels of efficiency. In a very real sense, much of this guide is a delineation of policies that address the various aspects of apartment management. Special areas that call for policies will be pointed out, and alternative policies will be suggested. In some cases, specific policies will be recommended. But in the end, it is often up to the manager to determine the policies best suited to a particular situation.

To ensure an efficient management operation, general policies are needed in several major areas. Specifically, policies should cover the rental and management office, recreational facilities, amenities of the property, and parking. When these policies are formulated, they will be a useful framework from which specialized personnel, rental, and resident related policies can be approached.

THE OFFICE

Let’s begin with policies that relate to the rental and management office. Apartment complexes may have one or two such offices depending on the size of the development. One thing is certain: Policies are as important to the management of an apartment building with a single office as they are to a building with two offices.

Office Location

There probably will be several possible locations for the rental and management office. Since the purpose of the office is to serve both prospects and residents, it should be located where it will be easy to find, especially for prospects. From this standpoint, the closer the office is to the road or visitor parking lot, the better.

One of the best places to locate the office is close to or in the property’s recreational facility. There are several advantages to this arrangement.

• It ensures that prospects will see the recreational facilities. In the later stages of a rental program, agents showing the property may skip that part of the tour. The prospect who must come to the recreational area to get to the office sees the facility, which should be a real plus in the marketing program. Unfortunately, in some properties, the recreational facility is closed or even locked during day light hours.

• You can supervise the recreational facility without adding the extra staff you would need if the office and facility were separate.

• Finally, when the office is located in the recreational facility, you can easily check on its maintenance and make sure the facility is kept clean at all times.

Complexes without recreational facilities obviously exist; and in these cases the office should be in an easy-to-find location—probably close to the main entrance. Ideally, the office will have a separate outside entrance so prospects do not have to enter the building lobby.

Some managers like the idea of making the rental office part of the model apartment or setting up the office in a regular apartment next to the model. When alternatives are available, these are poor choices. They breach security by bringing outside visitor traffic into the building and by having a commercial purpose intrude into a residential area.

Combining the office with the model apartment usually destroys the merchandising appeal of the model. If only one unit is available, it would be better to have only an office and no model. Taking over a next-door apartment for the office eliminates the rental revenue from that unit. Circumstances may force you into this situation, but avoid it if possible.

One Office or Two?

The function of the rental office, or, as it should be known, the rental in formation center, is to serve prospects; the function of the management office is to serve residents. For this reason, you may consider having two separate offices. However, it is generally better to combine the two functions in a single office, since such an arrangement uses personnel more effectively. If, at slack periods, there is only one person in an office, there would be no staff present if that individual had to leave for a few minutes. When the two functions are combined, rental and management people can fill in for each other when necessary. This arrangement also allows the staff to gain a better understanding of the property’s total operation. Possible exceptions are extremely large complexes.

Some managers prefer to separate the two functions in all cases to avoid the risk of having a complaining resident come into the office and discourage a prospect who overhears the complaint. Most managers do not encounter this problem frequently, especially when their properties are operated properly. If a resident complains, it’s generally at the time of rent payment (usually early in the morning or late in the day) or just be fore a major holiday (like Thanksgiving or Christmas) when it’s important to get things looking right for visiting friends and relatives. These are light rental periods when prospects are not apt to be present.

If the thought of having residents and prospects running into each other is still a concern, a private area in the same office can be set aside for residents. The fact remains that a combined office is more efficient than two separate ones.

Office Appearance

Despite the old saying, “you can’t judge a book by its cover,” people can and do judge by appearance. A disorderly management office with service requests stacked in the file tray, half-empty coffee cups lying around, wastebaskets overflowing, and old plumbing parts on the floor may make a rental prospect wonder just how well the rest of the building is maintained.

Maintaining an attractive appearance is essential. Desks should be clean and uncluttered. Ashtrays should be emptied several times a day and wiped clean each time. Coffee pots and cups should be kept out of sight, except when coffee is being served. If there are magazines for prospects to read while they are waiting, the copies should he current and appear fresh. Windows should be sparkling and the floor cleaned or vacuumed daily. Good housekeeping in the rental office will pay off in increased prospect confidence.

Office Hours

Again, because the office exists to serve prospects and residents, the hours of operation should conform to the habits of the people being served.

Consider prospects first. My experience shows that Sunday is the day when you can expect the greatest activity. Some managers dispute this. They say they never see any prospects on Sunday. (Why? Probably because their offices are not open!) Don’t doubt the importance of Sunday; it is almost always the busiest day.

Holidays are as important as Sundays. The only exceptions are Thanks giving Day, Christmas, and New Year’s Day, when most people stay home. But Easter, Memorial Day, Fourth of July, and Labor Day bring out apartment hunters.

Monday evening is another prime time for prospects. Saturday, contrary to what some may believe, is a relatively poor day, because people reserve it for grocery shopping and other chores.

Knowing this, it’s a good idea to keep the rental office open on Sundays and holidays in addition to weekdays. That means seven days a week.

A study of prospect traffic in our office revealed that few people show up before 11:00 A.M. So generally, with rental hours from 11:00 AM, to 6:00 P.M., you’ll catch most of the prospect traffic. When establishing your hours, avoid changes from one day to the next. Consider the fact that it’s unwise to show apartments after dark. You may want to extend your hours in the summer when daylight saving time is in effect. Also, you should post your rental hours so prospects know when the office is open.

Quite possibly, rental hours may differ from actual office hours. For example, even with rental hours of 11 AM, to 6 P.M., the workday might begin as early as 7:30 AM. This allows the office staff to plan the day and start work before problems begin to take precedence. Banks and landlords were probably two of the last holdouts against adjusting business hours to meet customer needs. Banking institutions today are certainly open and ready to serve their clients at all sorts of odd hours. Apartment managers .should follow suit. We need to be open when the customer is most likely to have free time. That will include early mornings, some evenings, and all weekends. Be aware that service is the property manager’s goal. If you need to change hours to better serve prospects and residents, do so!

RECREATIONAL FACILITIES

From the single room with a ping-pong table to a lavish clubhouse, all the property’s recreational facilities need policies to govern hours of use, guests, and fees. Otherwise, these facilities will be uncontrolled, a situation that will irritate residents and reflect poorly on management.

In setting hours, consider residents’ preferences as well as the effect on those who live near the facility. For example, it would not he wise to permit the clubhouse to be open until midnight if it is immediately adjacent to dwelling units.

Guests can be a problem. There is a thin line between being so restrictive that residents will be discouraged from having guests (and may move Out for that reason) and being so relaxed that the entire neighbor hood can use the facility. A policy that many managers have found work able is to limit guests to two at a time in the company of a resident.

As for guest fees, avoid them if possible. Residents dislike them, and they make your place seem unfriendly. Guest fees, a negligible revenue source, also create extra bookkeeping work.

Do not staff the facility with any more personnel than absolutely necessary. Once you do, you’ve established a precedent that you may have to maintain. Unless you are legally required to have a swimming pool life guard, don’t hire one unless it’s a service you wish to extend indefinitely.

If your development has a nice facility, make sure that the established policies allow the residents to use it. Sometimes management is reluctant to let the residents use the recreational facility for fear it will become less “showable” to prospective renters. If this feature cannot be used by residents on a regular basis, it really will have little value in the rental process.

The character of recreational facilities has really evolved over the years. They are used less for seasonal parties, or as space to be rented for private gatherings. Many have been converted to private clubs for the residents and their guests. Evening offerings such as snacks, beverages, and entertainment (piano music, for example) are often used to attract residents. Renting the facility to one resident prohibits its use by all others. The private club concept benefits all residents and encourages a general camaraderie among them; this, in turn, prompts residents to re new their leases.

Neighboring rental developments may get together to develop jogging trails or, more commonly, exercise courses in which participants run or walk between guideposts and complete exercises on various apparatus. Few developments have the acreage to make an interesting and challenging course. Together, several competing apartment complexes can easily provide the land needed for something that will be beneficial to all.

Some types of equipment such as basketball standards and pool tables can attract groups that behave like gangs; this certainly should be avoided in apartment complexes. If the manager sees unruly teenagers beginning to congregate around apartment facilities, a change in the rules or removal of the equipment should be considered. It’s always better to take the initiative than to be forced to respond to complaints.

Finally, establish a policy governing use of the recreational facilities by special-interest groups, such as political organizations or commercial enterprises. Generally, such use should be discouraged.

SUPPORTING AMENITIES

Most properties have supporting amenities designed to meet basic resident needs and make life more comfortable. Carefully consider what policies are needed for these facilities.

Laundry Room

This is a basic facility that is important in satisfying residents and will be of interest to prospects. Expect it to get heavy use.

Equipment is of primary importance. Availability of off-site facilities will influence your need for laundry room appliances, but a good method of defining equipment requirements estimates the ratio of washers and dryers to residents by taking resident type into account:

Young families: One washer and dryer per ten to twelve apartments Career people: One washer and dryer per twelve to sixteen apartments Upper rent level: One washer and dryer per twenty to twenty-four apartments Senior Citizens: One washer and dryer per thirty to forty apartments Dryers should be the single-load, stack-on variety rather than the large double-load models. The latter type is hard on clothes and does not offer the flexibility or revenue potential of the smaller dryers. Provide a sorting table, clothes hanging rods, and laundry tub in adequate numbers for the size of the facility. The laundry room should be properly ventilated, brightly decorated, well lit, and cleaned daily. To encourage neatness, add a wide-mouth trash receptacle. For resident convenience, a bulletin board is a good idea; but do keep an eye on the items posted and remove the undesirable ones. The laundry room should remain open the maximum number of hours each day, depending on its location. For security reasons and to minimize the disturbance to nearby residents, 11 P.M. is a typical closing time. If conditions permit, consider keeping it open twenty-four hours a day; residents who work odd hours will appreciate this. It may be necessary to keep the laundry room locked at all times. If so, residents should be issued laundry room keys; residents’ apartment keys can also be designed to operate the laundry room lock.

Soap dispensers are usually cheaply made and are subject to failure and pilferage. Residents who come to depend on them will be irritated when the machines are empty or not working. It’s best not to install them. In the absence of dispensers, residents will bring their own soap. Also, avoid having the management office make change; you might find yourself constantly interrupted by people asking for change. In my experience, most residents prefer using only one type of coin to operate the machines, even if it means paying slightly more.

Should the property own the laundry machines? From a financial standpoint, it is better to do so. But the burden and expense of maintenance, plus the risk of coin theft, are major drawbacks. If a manager deals with a concessionaire, he or she should reserve the right to approve prices charged to operate the machines. Otherwise, residents may be come irritated and blame the manager if the concessionaire raises prices unreasonably.

Vending Machines

Cigarette, candy, soft drink, and ice dispensers are appreciated by many residents. These machines are best housed in a separate facility, prefer ably in or near the recreation room or clubhouse, in their own separate room, or in the laundry room.

The disadvantage of these vending machines is that they are subject to vandalism and theft. In time they create a maintenance problem and become unsightly, especially if exposed to the weather.

Pay Telephone

This can be a big convenience to residents on moving day, employees on the site, delivery people, and subcontractors. But it should be located out side the building in an out-of-the-way spot. If it is inside, the telephone may become a gathering place and will probably collect litter.

If you feel strongly about locating a pay telephone indoors, the laundry room is a good location. The lack of privacy in the laundry room would discourage people from spending too much time using the phone. Remember, a pay telephone in a locked laundry room is of no use to outsiders. Admitting other individuals to your laundry room to use the phone creates a breach of security.

Pay telephones are subject to vandalism and seldom generate enough revenue to pay for themselves. Cost is a consideration. Telephone companies offer different kinds of pay telephone service. “Public” Phones do not necessarily involve a monthly fee; but there are requirements to meet (e.g., proximity to a business, a minimum number of daily calls). If these requirements can’t be met, the alternate service is likely to involve installation fees as well as a monthly charge. Obviously, phone companies are your source of information regarding service and fee structures.

Storage

A well-kept, organized, brightly lit, and secure resident storage facility is a building asset. Some complexes have a storage room that’s nothing more than a large room where residents can store items at random, without benefit of lockers or other separation. This arrangement has a major draw back: Even though the lease may have a disclaimer denying landlord responsibility for items stored in the facility, there still may be liability for theft or damage.

It is better to have separate resident lockers. They should be identified by apartment number to avoid confusion and to help the manager locate a particular residents’ locker. To prevent residents from using unauthorized lockers or more than one locker, all vacant lockers should be kept securely locked until assigned.

PARKING

Parking is one of the perennial problems of management. Unsupervised Parking of automobiles, motorcycles, boat trailers, and bicycles is a major detraction from the neat appearance of a property and adversely affects marketing. We’ll pursue the subject of parking again in reference to readying your property for residents. For now, we’ll make one key policy making recommendation: Don’t establish reserved parking. This rule always applies, except where parking spaces are enclosed or specially delineated, as in high-rise garages, covered carports, or individual garages.

The reason for this recommendation is simple: Reserved parking is extremely difficult to enforce. Residents who have reserved parking Spaces naturally expect them always to be available. If they find another car in their space, they become upset and create a scene; this usually occurs late at night. Reserved parking that cannot be enforced is bound to irritate residents. You should avoid such policies because they erode good resident relations. Throughout this guide, you will see examples of the importance of building your relationship with residents.

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