Colorado Rental Housing Journal - January 2015

Advertise in Rental Housing Journal Colorado Circulated to over 6,000 Apartment owners, On-site, and

Maintenance personnel monthly.

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January 2014 - Vol. 7 Issue 1Rental Housing Journal Colorado

DENVER • COLORADO SPRINGS • BOULDER

Monthly CirCulation to More than 7,000 apartMent owners, property Managers, on-site & MaintenanCe personnel

www.rentalhousingjournal.com • Professional Publishing, Inc

2. Multifamily Green Light3. Buying Twice as Affordable as Renting 5. Property Management Reference Checks

5. Is Print Advertising Dead? 6. Secret Shopper7. Innovators Beware: Dangerous Intersection Ahead

continued on page 2

www.rentalhousingjournal .com

IRVINE, Calif., /PRNewswire/ --

Auction.com, LLC, the na-tion's leading online real estate marketplace, today

announced the findings from its No-vember Real Estate Investor Activ-ity Report™, a nationwide survey of real estate investors bidding on properties offered for auction dur-ing the month. This research pro-vides insight into real estate invest-ment trends on both a national and regional level. Survey data collected

from investors bidding on property online and at live events across the country reveals that buying property to hold and rent is currently favored

over flipping nationwide, although investor intent varies considerably by vehicle (online or live event) and investor profile.

...continued on page 4

U.S. Investors Favor Renting Over Flipping

According To Auction.com Real Estate Investor Activity Report

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Strong job gains in the Denver metro will drive apartment demand this year, pushing up

rents and increasing property in-comes. Nearly every employment sector will add jobs, strengthening economic growth. Lockheed Martin recently announced plans to create roughly 500 high-paying aerospace jobs over the next eight years. Em-ployment increases will keep devel-oper optimism high; however, after a near record-setting pace in 2014, the construction pipeline will be-gin to ebb this year. Nearly half of all completions in 2015 will still be heavily concentrated near the urban core. Over the past several years, ab-sorption has kept pace with increas-ing development; however, this year deliveries will outpace demand, el-evating marketwide vacancy into the low-4 percent range. Yet, the rise in vacancy will be temporary as con-struction slows and new projects lease up. High demand for rentals will enable operators to lift rents at one of the fastest paces nationwide. Over the last few years Denver has

ranked among the top major metros for rent growth, posting annual gains

well above 5 percent since 2010.

Growing Denver Economy, Surging Rents Stir Investor Demand

National Findings: Investor IntentInvestor Profile Flip Rent UndecidedOne-time purchase 24.4% 72.2% 3.3%Real Estate Investor 46.7% 50.4% 2.9%Working on Behalf of Another Investor

60.4% 36.8% 2.8%

TOTAL 46.6% 50.5% 2.9%

By John Wilhoit Jr.

In multifamily property manage-ment, there is always more to do, but there are certain things that

must be done. In the effort to main-tain full occupancy, these five tips are in the “must be done” category.1. Renewals!

The straightest line to maintain-ing high occupancy in multifamily is focusing consistent attention on renewals. Ignoring this makes main-taining full occupancy near impossi-ble.2. Be Ready! Never show a unit to a potential ten-ant that is not ready to occupy. This includes “almost ready” and “gon-na be ready next week” multifam-ily units. It’s either ready to occupy or… wait.3. Know Thy Competitors!

Know where you can compete and where you cannot. Wendy’s res-taurant has tried many times to get in on McDonald’s breakfast revenue. They just cant do it. Know thy com-petitors and what concessions they are offering in the present tense. Leasing agents should know ameni-ties of competitor properties and how/where your property can out-perform. Example: older units almost always have greater square

Five Tips to Full

Occupancy

Rental Housing journal Colorado • January 20152

RENTAL HOUSING JOURNAL COLORADO

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cost effective way to reach your target.

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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 pub-lications does not, in any way, comport an endorsement of or support for the products or services offered. Metro Apart-ment Manager is produced monthly and is published by Professional Publish-ing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2015 All rights reserved.

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feet than newer product. Accentuate the positive!4. Social media is a main-stay! Integration of Internet based ad-vertising/media is a must no mat-ter how small the multifamily mar-ket. The renter market is younger people (still). Young people are glued/stuck/fastens to their smart phones…. smart phones with con-nectivity to available apartment homes.5. Two-way communication! Leasing Agents are far from order

takers- they are the front line rep-resenting your asset. A potential tenant coming to your Leasing Office is looking for a place to live and insight on the lifestyle repre-sented. A big part of leasing, then, is to dialogue and convey to potential tenants what they are buying.

This is accomplished best by cre-ating two-way communication. Leasing Agents should be asking open-ended questions that draw information from potential tenants to better understand their needs and wants. This allows Leasing Agents

to provide information on features and benefits offered by the develop-ment that meet potential customers lifestyle desires. People may look for features, but they buy benefits. The only way to know what benefits they are looking for is to ask.

Multifamily Insight is dedicated to assisting current and future multifami-

ly property owners, operators and investors in executing specific tasks

that allow multifamily assets to operate at their highest level of efficiency. We

discuss real world issues in multifamily

management and acquisitions. This blog is intended to be informational

only and does not provide legal, finan-cial or accounting advice. Seek profes-

sional counsel. We discuss best practic-es in multifamily management and

methods related to how to buy apart-ment complexes. Our focus is sharing

strategies and tactics that can be imple-mented and measured. For more infor-

mation, visit: http://www.Multifamilyinsight.com

Forecasters have begun to warn of potential overbuilding in the multifamily sector, but con-

cerns from pundits are premature. Multifamily development in the U.S. has yet to meet pent-up demand, and annualized effective rent growth was 4.1 percent in August 2014, the high-est since October 2011. At the current rate of development, we anticipate production capacity and demand will reach equilibrium by mid-2015. Subsequently, the industry could enjoy up to six additional years of sustainable production, if develop-ers and lenders carefully monitor demand and modify deliveries ac-

cordingly. It has been said that multi-family is in the middle innings of an extra inning game.

Statistics on the U.S. supply of multifamily units clearly show the sector is not in danger of being over-built, although a few markets are the exceptions. Even areas such as Northern Virginia, which recently experienced oversupply conditions, are showing signs of improvement. Here are notable signs of a robust multifamily sector:

• The national multifamily occu-pancy rate rose to 95.2 percent in August 2014 after being at 95 per-

cent since May, according to research firm Axiometrics. Occupancy rates are holding steady despite the new supply from developers.

• There is fresh demand each year for 400,000 to 450,000 units, but developers are completing only 325,000 units a year.

• 1 to 1.25 percent of the existing multifamily inventory in this country is demolished each year, a metric that when not taken into consideration, skews perception of demand. With considerable attention currently on urban

development, the trend will con-tinue in the near term.

“In The Top 100 U.S. Markets, Demand for Apartments was More than Double that of the Number of Units Delivered.”

Fundamentals remain strong on the demand side as the need for rental units continues to rise. In the top 100 U.S. markets, demand for apartments was more than double that of the number of units deliv-ered, with 55,561 units completed and 129,162 units absorbed, accord-

Multifamily Green LightU.S. Development Pace is Sustainable for Years to Come

Five Tips ..continued from front page


Rental Housing journal Colorado • January 2015 3


Even first-time buyers with low down-payments can expect to pay just 17 percent of their

income toward mortgage payments as rents soar

• Home buyers should expect to spend 15.3 percent of their incomes on mortgage payments for a typi-cal home. Renters should expect to pay twice as much -- 29.9 percent of their median incomes -- to rent.

• Likely first-time, 23-to-34-year-old buyers should expect to spend 17.4 percent of their monthly income on house payments. Historically, they spent about 22.5 percent of their income to pur-chase a home.

• It was 30.8 percent more afford-able to buy a home in the third quarter than it was in the pre-bubble years (1985 -1999). It was 19.8 percent less affordable to rent, compared to the pre-bubble years. It's more affordable to buy a

home now in most U.S. metros than it was 15 years ago, even for millen-nials putting down less money on a home, according to a Zillow analysis of third quarter income and home value data. Renters, however, con-tinue to pay an increasing share of their income to their landlords as

rents soar and incomes remain flat.On average, U.S. home buyers

making the nation's median income and purchasing the typical U.S. home spend 15.3 percent of their income on their monthly house pay-ment, down from the historical norm of 22.1 percent during the pre-bubble period from 1985 to 1999. On aver-age, U.S. renters spent 29.9 percent of their monthly income on rent in the third quarter of 2014, up from 24.9 percent historically.

Younger buyers, earning less money in many areas and making smaller down payments on a home, should expect to spend slightly more of their income on mortgage pay-ments – 17.4 percent. Homes for younger buyers remain affordable thanks to continued low mortgage interest rates and their tendency to shop for less expensive homes.

Continuously rising rents across the country could drive more people into the home-buying market, but they also make it more difficult for first-time buyers to save for a down payment. Washington, DC renters can expect to spend 27.1 percent of their income on rent, up from 16.2 percent historically. In Miami, rent as a percentage of income has risen from 26.5 percent before the bubble to 44.5 percent currently.

Buying Twice as Affordable as Renting Says Zillow Study

Metro Area Q3 2014 Me-dian Household Income

Zillow Home Value Index

% of monthly income devoted to mortgage payments in Q3

% of monthly income devoted to mortgage payment for first-time home-buyers in Q3

% of monthly income devoted to rent in Q3

United States $53,620 $176,500 15.3% 17.4% 29.9%New York, NY $69,337 $381,600 25.6% 30.6% 40.5%Los Angeles, CA $60,650 $531,000 40.8% 50.7% 47.9%Chicago, IL $62,652 $188,200 14.0% 16.2% 31.5%Dallas, TX $61,310 $148,400 11.3% 14.5% 27.7%Philadelphia, PA $64,823 $202,700 14.6% 18.1% 28.8%Houston, TX $59,953 $150,300 11.7% 15.0% 29.4%Washington, DC $92,610 $359,300 18.1% 24.0% 27.1%Miami, FL $47,896 $205,200 19.9% 21.2% 44.5%Atlanta, GA $59,927 $151,900 11.8% 15.2% 24.1%Boston, MA $75,059 $362,700 22.5% 26.3% 34.1%San Francisco, CA $77,409 $689,900 41.5% 43.3% 45.9%Detroit, MI $52,694 $113,500 10.0% 10.6% 24.1%Riverside, CA $54,085 $277,900 23.9% 28.8% 36.4%Phoenix, AZ $53,487 $193,700 16.9% 20.9% 27.3%Seattle, WA $70,352 $333,700 22.1% 27.3% 30.8%Minneapolis, MN $69,569 $213,100 14.3% 17.7% 26.1%San Diego, CA $63,607 $466,100 34.1% 42.9% 42.5%St. Louis, MO $54,746 $129,100 11.0% 12.5% 24.1%Tampa, FL $46,050 $145,400 14.7% 14.7% 32.4%Baltimore, MD $72,010 $241,800 15.6% 19.0% 28.5%Denver, CO $64,120 $271,200 19.7% 25.4% 32.9%Pittsburgh, PA $51,668 $123,800 11.2% 11.7% 26.6%Portland, OR $60,071 $274,100 21.2% 28.3% 30.5%Sacramento, CA $59,161 $325,800 25.6% 31.1% 32.2%San Antonio, TX $51,884 $144,300 12.9% 15.1% 29.6%Orlando, FL $48,905 $168,100 16.0% 19.7% 32.1%Cincinnati, OH $55,093 $135,900 11.5% 13.9% 26.0%Cleveland, OH $49,842 $120,600 11.3% 13.9% 27.7%Kansas City, MO $58,212 $137,400 11.0% 13.2% 24.2%Las Vegas, NV $51,609 $181,600 16.4% 19.3% 27.5%San Jose, CA $99,230 $813,500 38.2% 43.7% 37.9%Columbus, OH $55,836 $144,300 12.0% 14.1% 27.0%Charlotte, NC $55,332 $155,900 13.1% 15.3% 26.3%Indianapolis, IN $55,238 $128,100 10.8% 13.5% 25.8%




Respondents who indicated that they were making a one-time pur-chase preferred a hold-to-rent strat-egy, as did – to a lesser extent – respondents identifying themselves as full-time "real estate investors." Meanwhile, flipping was favored by the majority of respondents indicat-ing that they were working on behalf of another investor.

Auction.com's findings based on responses given at online auctions

show that investors bidding online generally tend to hold properties to rent rather than flipping them. This data also suggests that purchasing property to rent is more prevalent in the Midwest and South, whereas there appears to be a higher propen-sity for flipping among real estate investors in the Northeast. The flip vs. rent split is nearly even in the West, with a very slight preference toward renting.

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Conversely, investors bidding at live events appear to be more likely to flip the properties they purchase, but there were very strong regional variances. November survey data collected at live events in states where Auction.com is active revealed that flipping was favored overall,

with only Georgia, Tennessee and Texas bucking the trend. Meanwhile, respondents at live events in the Western states such as California, Arizona and Nevada showed an overwhelming preference toward flipping.

November Online Investor Data: Intent of All Investors SurveyedRegion Flip Rent Undecided West 49.5% 50.5% 0%Midwest 43.5% 51.8% 4.7%South 40.5% 57.1% 2.4%Northeast 54.1% 41.9% 4.1%Nationwide 43.3% 54.0% 2.7%

November Live Event Investor Data: Intent of All Investors Surveyed State Flip Rent Undecided Arizona 66.7% 19.0% 14.3%California 65.6% 32.2% 2.2%Georgia 41.9% 54.3% 3.9%Idaho 69.2% 30.8% 0%Nevada 88.9% 11.1% 0%Tennessee 39.4% 60.6% 0%Texas 38.7% 60.0% 1.3%Washington 62.5% 37.5% 0%Nationwide 49.3% 47.6% 3.1%

Renting Over Flipping ..continued from front page

"Real estate investors appear more likely to flip a property in those regions where home values are higher," said Auction.com Executive Vice President Rick Sharga. "Higher prices can translate to a faster and potentially more significant short-term return on investment. The hold and rent strategy seems most popu-lar in markets where home prices are lower, allowing investors to charge a more competitive monthly rental

rate and still produce reasonable returns over an extended period of time."

Flipping was also the more popu-lar strategy among investors pur-chasing multiple properties per year – particularly institutional investors (those indicating that they purchase 50 or more properties per year). This was true for both online auctions and live events.

November Online Auction Investor Data: Intent By Purchase ProfilePurchase Profile Flip Rent Undecided0-1 Property/Year

30.0% 65.6% 4.4%

2-49 Properties/Year

52.8% 45.5% 1.7%

50+ Properties/Year

60.0% 40.0% 0%

November Live Event Investor Data: Intent By Purchase ProfilePurchase Profile Flip Rent Undecided0-1 Property/Year

41.3% 56.3% 2.5%

2-49 Properties/Year

49.8% 48.0% 2.2%

50+ Properties/Year

55.4% 38.6% 6.0%

Auction.com, LLC, is the nation's leading online real estate marketplace.

Founded in 2007, the company has sold over $26 billion in residential and com-mercial real estate assets. Auction.com has over 900 employees and headquar-

ters in Irvine and Silicon Valley, California as well as offices in Austin

and Plano, Texas, Atlanta, Denver, New York and Miami. Visit www.auc-

tion.com for more information.SOURCE Auction.com, LLC

Flipping was also the more popular strategy among investors purchasing

multiple properties per year – particu-larly institutional investors (those indi-

cating that they purchase 50 or more properties per year). This was true for

both online auctions and live events.

Advertise in Rental Housing Journal Colorado Circulated to apartment owners,

on-site, and maintenance personnel monthly.

Call 503-221-1260 to advertise with us.



According to the Society of Human Resource Man-agement {SHRM} over 50

percent of the information presented on a resume by a job candidate may be false or misleading. These are alarming statistics, and as the execu-tive of your property management company, it continues to be increas-ingly important to understand the mindset of the job candidates that are applying for positions within your company. This article will help you and your company strengthen your reference checking process and eliminate those who will not be a perfect fit, long before a position is ever offered.

Some reference checking statis-tics: A recent SHRM survey at www.shrm.org was sent to 2,640 human resource members regarding refer-ence checking. The survey conclud-

ed that job candidates frequently present misleading information about their length of stay with for-mer organizations, their past/cur-rent salary levels and their college credentials. More specifically, 53 percent of companies involved in this survey discovered falsified infor-mation about length of employment from job candidates and 51 percent discovered falsified information about past salaries. In addition, 61 percent of job candidates falsify their college credentials, a credential that can be easily researched during the reference checking process.

Tip From The Coach: Based on the above survey information, con-ducting thorough reference checks must continue to be an important step in the selection and interview process of hiring SuperStars for your property management company.

Developing a reference checking process: The first step is to deter-mine how reference checks are going to be done in your property manage-ment company and to establish or strengthen your written policy for how reference checks fit into your interview process. With some of our property management clients, their human resource department handles this important step before a formal job offer is made. With other prop-erty management clients, all hiring executives handle their own refer-ence checks, based on the specific level of position being offered or the compensation range being present-ed. As for references, three or more business references should be sup-plied by a job candidate as early in the interview process as possible. We highly recommend asking for references early in the interview pro-

cess because this will give your hir-ing executives additional time to contact each organization submitted by a job candidate. This also means that your hiring executives will not be rushed to do reference checks in the final hours before making a job offer. This makes for a more thor-ough and complete reference check-ing process.

Tip From The Coach: In addition to reference checks, many property management companies are now asking permission to do background checks, credit checks and criminal checks as part of their hiring process. Based on the SHRM survey statistics above and your own professional experience, have you recently reviewed your reference checking process? This process will help to link talented SuperStars to compati-

Property Management Reference Checks… Are They Really Necessary?©

Ernest F. Oriente, The Coach {Article #224…since 1995}

ing to a second-quarter 2014 report from MPF Research. Job growth is expected to continue for the next five years, according to economists at Axiometrics, barring an unforeseen shock to the economy. Job growth will drive demand for multifamily projects, and as more job formation drifts to the suburbs, so will rental demand. In a somewhat surprising observation, the National Multifamily Housing Council reports that almost 50 percent of new renters are Baby Boomers, rivaling Millennials as the biggest driver of demand. Baby Boomers are becoming “renters by choice” who trade house and yard maintenance for convenient live/ work/play environments.

For the time being, several factors are holding the supply/demand ratio in check. The number of Millennials entering the renter pool continues to increase a circumstance that will not change in the near term. Millennials will constitute 24 million new households between 2015 and 2025, thus driving up demand for rentals and starter homes, according to “The State of the Nation’s Housing 2014,” a report by the Joint Center for Housing Studies of Harvard University. Immigration is also driv-ing additional household formation in ever-increasing numbers. Renter growth in 2013 remained well above the 400,000 average annual absorp-tion rates of the last few decades, the study reports. In addition, stringent mortgage underwriting and growing student debt push homeownership further out for many young individ-uals and families.

Also curtailing supply are barriers to entry, which exist in coastal mar-kets as a result of the high costs of

land and construction. Artificial bar-riers in other U.S. markets are a con-sequence of zoning restrictions and public opposition to higher density projects that are necessary to make some deals financially feasible.

Finally, the lack of skilled labor is putting stress on construction capac-ity, driving up labor costs and length-ening construction timetables. Many former and would-be construction workers have been lured to the oil and gas industry by higher wages, leaving the development community without enough tradespeople. While commodity prices are increasing moderately, contractors are pushing up margins to recoup losses incurred during the recession, and the addi-tional costs will price some projects outside the realm of feasibility. The same labor dynamic is slowing the building of homes, which, conse-quently, also adds to the number of people in need of rental units.

Opportunity still abounds in the robust multifamily sector, but future projects will face greater scrutiny from debt and equity sources, par-ticularly as interest rates begin to rise. The “easy” opportunities are largely done and developers must be creative in originating the next round of development opportunities. As long as developers exercise con-straint, it appears we will have a number of years of positive invest-ment environment for multifamily.

By Mark Culwell, Managing Director, Multifamily Development

Transwestern Development [email protected]

214.534.1458

By Devan Gilbert, Staff Writer, Rental Housing Journal

Rumor has it in the marketing and advertising world that print advertisements are out-

dated and inefficient. The numbers, however, say otherwise. It’s time to squash this misinformation and get to the truth about the power of the print.The younger generation doesn’t read print anymore:

False. Many like to claim that print advertising is incapable of reaching the younger generation, but research proves differently. While social media is an effective way to target the 18-30 year old demograph-ic, it is not the only way.

National Public Radio reported a study that found a quarter of 18-24 year olds had read a newspaper within the past 24 hours. The New York Times announced that 10 per-cent of its hard copy subscribers are between the ages of 18 and 24. According to Mediamark Research and Intelligence, magazine reader-ship has increased by 4.3 percent in the past five years. The Association of Business Information and Media Companies reported that 96 percent

of business-to-business clients still read print publications. If businesses made the fateful decision to disre-gard print advertising all together, they would be disengaging from a massive list of potential clients.

Multimedia is the only way to get readers to spend with my company.

False. A December 2012 Valassis survey was conducted, focusing on the connection between print adver-tisements and the spending habits of the generations born in the 1980s and 1990s. Here is the break-down of the results.

Over half said they would spend less money if they didn’t look at print ads.

91 percent said they used coupon cutouts from print advertisements to save money.

51 percent admitted that print ads inspire their spending habits.

30 percent said they refer to online websites seen in print ads to obtain more information

87 percent use print to choose a restaurant. Print ads make it easy to target

certain demographics. Instead of throwing an advertising banner on

Is Print Advertising Dead?

The Evidence Says No!

Multifamily Green Light ..continued from page 2





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Journal Colorado

Official Publication of the Colorado's Leading Advocate

for the Rental Housing Industry

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more info.

Secret ShopperAsk TheNorthwestNorthwest

As strong market conditions continue to prevail in the Pacific Northwest, many

apartment communities are main-taining high occupancy numbers, and others are full with a waiting list. Conditions are optimum for rais-ing rents and increasing property values. Residents of these communi-ties are getting an education in the high cost of relocating and are opting to stay put, even if they receive a significant rent increase.

What all this means is that those on the leasing end are in the driver’s seat: It is a seller’s market! However, just because you are full does not mean you quit selling or stop provid-ing quality customer service. Unfortunately, after several years of tough market conditions, some leas-ing staffs are ready for a break and they are taking it during regular office hours!

Based on some disturbing trends that started showing up a couple of years ago and that are still going strong, the Secret Shopper is won-dering if some leasing consultants

have the following questions:

When I have no vacancies or unrented notices, is it really necessary for me to answer the phone, return calls or set appointments?

When I have no apartments available to rent, do I really have to keep appointments that conflict with my lunch break?

When my community is full and I’m having a slow day, do I really need to stay open until closing? While the above are “imaginary”

questions, I can’t help but wonder how many of these are real, unspo-ken thoughts in the minds of some leasing employees.

It may be true that the “leasing” side of the rental office becomes less challenging when your community is 100% occupied. However, even without apartments to rent, you have an existing customer base. Your resi-dents still must be able to conduct business with you in order to renew leases, pick up packages, request

maintenance service, etc. If you choose not to answer your phone, return calls or keep your office open, then you are not providing the level of customer service you promised when they were prospective renters

Regarding your 100% occupancy Congratulations! - It took a lot of hard work to get there. Of course, depending on how you treat your residents will determine if you STAY there. Oh, and one last thing: How are you coming along with your waiting list? Are you keeping in touch with the people who expressed interested in renting at your commu-nity or did you just take their name and number to “humor them?” Remember: The future is unpredict-able, but a current, updated waiting list is a “sure thing.” Instead of “clos-ing up shop” early on a slow day, how about making some follow up calls. You and your future renters will be glad you did!

If you are interested in leasing train-ing or have a question or concern that you would like to see addressed, please

reach out to me via e-mail.

ASK THE SECRET SHOPPER

Provided by: Joyce (Kirby) Bica former owner of Shoptalk Service

Evaluations Phone: 425-424-8870

E-mail: [email protected]©

Joyce (Kirby) Bica

www.rentalhousingjournal .com

"Despite rising home values, home ownership remains very acces-sible for buyers that can scrape together a down payment – even if that down payment is relatively modest – find a home to buy and secure financing," said Zillow Chief Economist Dr. Stan Humphries. "But what keeps me up at night is the fact that it still remains so difficult for so many potential buyers to make those particular stars align, largely because renting is so unaffordable these days. It's very difficult to come up with a down payment when so much of your monthly paycheck – especially on an entry-level salary – is going to your landlord instead of into your savings. Buying conditions are get-

ting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into home ownership."

Home ownership rates in the U.S. have steadily declined, even as the housing market has recovered, in part because millennials have delayed their entry into the housing market. But it is likely that by the end of 2015, millennials (aged 23-34) will overtake Generation X as the biggest group of U.S. home buyers, a transition aided by widespread home affordability.

Twice as Affordable ..continued from page 3



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ble positions within your property management company and will reduce the chances of hiring low per-formers.

Questions to ask when calling a reference: It has been our experience that all of our property management clients want to create their own cus-tom reference checking form. Here are some sample questions to get you started with yours: How would you characterize his/her success with your company? How would you characterize his/her energy level? How was this person viewed by his/her peers? Describe the types of decisions this person made on a daily basis? How did this person manage their time? Tell me about a disagreement or a challenging situa-tion and how this person handled it? Specifically, how was this person paid? Why did this person leave your company? Based on what you shared today, would you hire this person back?

Tip From The Coach: We know that many companies are no longer giving references on past employees based on legal and liability concerns. Most of our property management clients now ask a job candidate to sign a reference authorization form giving permission to their previous employers for a full and candid ref-erence while also waiving any legal liability. In addition, we strongly advise our clients to call each refer-ence given by a job candidate and when the reference conversation is complete --- ask this person, “Is their someone else within your company who can give me an additional refer-ence on this job candidate?” Speaking to a second person within the same company is the secret to getting accurate and detailed references.

Want to hear more about this important topic or ask some addi-tional questions about how to build a custom reference checking form or to see a sample reference authorization form? Send an E-mail to [email protected] and The Coach will E-mail you a free TeleForum invita-tion.

Author’s note: Ernest F. Oriente, a business coach/trainer since 1995

[33,000 hours], serving property man-

agement industry professional since 1988--the author of SmartMatch

Alliances™, the founder of PowerHour® [ www.powerhour.com ],

the founder of PowerHour SEO [ www.powerhourseo.com ], the live weekly

PowerHour Leadership Academy [ www.powerhourleadershipacademy.

com/pm ] and Power Insurance & Risk Management Group [ 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, competitive sales

strategies, and high leverage alliances for property management teams and

their leaders. He provides private and group coaching for property manage-

ment companies around North America, executive recruiting, invest-

ment banking, national utility bill auditing, national real estate and apart-

ment building insurance, SEO/SEM web strategies, national WiFi solutions

[ www.powerhour.com/propertyman-agement/nationalwifi.html ], powerful tools for hiring property management

SuperStars and building dynamic teams, employee policy manuals [ www.

powerhour.com/propertymanagement/employeepolicymanuals.html ] and

social media strategic solutions [ http://www.powerhour.com/propertymanage-

ment/socialmedialeadership.html ]. Ernest worked for Motorola, Primedia

and is certified in the Xerox sales meth-odologies. Recent interviews and arti-

cles have appeared more than 8000+ times in business and trade publications

and in a wide variety of leading maga-zines 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 225+ articles for the property manage-ment industry and created 400+ prop-erty 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

By: Neal Thornberry, Ph.D.

Innovation is not for the faint of heart, as Galileo learned when he said that the Earth revolved

around the sun. He was scorned, threatened with death and eventu-ally put under lifetime house arrest.

Innovators are not always wel-come guests even within their own organizations, and their challenges are heightened by a dangerous orga-nizational intersection: where Complexity meets Wackiness. The more complex an organization, the more difficult it is for the innovator to figure out where to go with a good idea and how to weave it through the organization to implementation and eventually value creation.

Growing organizations cannot avoid complexity. They add process-es and people, divisions and special-ists. Since we can now measure almost everything, they often believe if one measurement captured in a report is good, then more are better.

One company, with whom I worked, learned that its sales people were losing a month of selling each year because of the time spent filling out reports required by the finance department. This example of com-plexity gone awry drove the organi-zation into Wackiness -- sacrificing revenues for reports.

There are many other examples of Wackiness getting in the way of innovation – and examples of stealth innovators circumnavigating them. One of my favorites is the tale of Jim Repp, head of Jeep design at the old Daimler Chrysler Corp.

Jim knew that many Jeep lovers spent thousands of dollars upgrad-ing their Wranglers for serious off-roading. This gave him the great idea for a mass-produced Jeep with all the upgrades built in at half the cost. When he shared his idea with mar-keting, they said there was no mar-ket for that type of vehicle and besides, you’re an engineer, not a marketer.

Undeterred, Jim and a small band of innovators I call Innovation Judo masters built a secret prototype. They took it out on the Rubicon Trail in California for off-road trials and invited the senior executives to watch. Jim’s prototype outperformed the other Wranglers and, as crowds gathered around it, the executives saw their enthusiasm. They immedi-

ately authorized production of what is now a best-selling icon, the Jeep Wrangler Rubicon.

Fortunately for Chrysler and other companies, there are a few pas-sionate innovators like Jim who won’t let go of their idea no matter what. They’ve developed a special set of skills (I call them Innovation Judo) that allow them to bypass those blocks.

They are:

• Discipline

• Leverage

• Speed

• Openings

• Circling

• Unbalancing

• Redirection

The Jim Repp story illustrates the application of several of these prin-ciples. The discipline to plan for building a secret prototype; leverage in getting senior executives to sup-port his idea; utilizing the opening at the Rubicon Trail; and then using the surprise (a tactic of unbalancing) of a Jeep that looked like all the other jeeps on the trail but outperformed them.

Since it takes so long to correct the dangers at the Complexity/Wackiness intersection, identifying and supporting a few Innovation Judo Masters can go a long way in overcoming some of the most diffi-cult barriers to innovation.

Neal Thornberry, Ph.D., is the founder and CEO of IMSTRAT, LLC a consulting firm that specializes in help-ing private and public sector organiza-tions develop innovation strategies. He serves as the faculty director for inno-

vation initiatives at the Center for Executive Education at the Naval

Postgraduate School in Monterey, Calif. Thornberry, author of “Innovation

Judo:Disarming Roadblocks & Blockheads on the Path to Creativity” (www.NealThornberry.com), holds a

doctorate in organizational psychology and specializes in innovation, corporate entrepreneurship, leadership and orga-nizational transformation. A respected

thought leader in innovation, Thornberry is a highly sought-after

international speaker and consultant.

Innovators Beware: Dangerous Intersection

Ahead

Referance Checks ..continued from page 5



Facebook or Twitter, you can send magazines, flyers or catalogs to homes in certain areas. Nordstrom, a billion dollar company, still spends a pretty penny on print advertising. Strategically, different versions of catalogs are printed and are distrib-uted according to how much a spe-cific customer spends annually and which departments they shop in. Nordstrom is able to target where and who its catalogs should be mailed out to. Finding the appropri-ate audience for a company’s adver-tising is made easy with print result-ing is less wasteful marketing spend-ing and increased profits for a com-pany.

Why should I use print ads? Large companies aren’t using them anymore.

False. Nordstrom isn’t the only company not falling for the rumors. In 2011 Nike spent $113 million on advertising that did not involve the Internet. Google spent $1 million on non-internet advertising that year as well. We all know these companies have some of the most brilliant mar-keting teams in the world, which is exactly why they are still using print advertisements. Madison Hildebrand, a star of the Bravo show, “Million Dollar Listings,” has had massive success as a Realtor and is well-known by most television view-

ers and Internet users. However, it should not be assumed that every potential client uses the Internet or watches cable TV. Mr. Hildebran knew this and recently advertised himself in a four-page spread in Homes and Land magazine. If busi-ness thriving people and companies are still using print advertisements then why shouldn’t everyone else?

What makes print ads “work”?

Great question. As stated before, print is easy to target. People also tend to pay more attention to mate-rial they are subscribed to rather than a pop-up ad or an ad interrupt-ing their music on Pandora. Websites tend to be skimmed quickly, adver-tising on TV or on the Internet is only there as long as it is paid to be there. A magazine tends to find a home on a coffee table or in a dentist’s office where it is picked up and sifted through by dozens of people over several months. The Internet these-days is full of scams and fake “news”. Print advertisements are more trust-worthy to potential customers. The Internet has helped bring us a fast-paced world. Many people turn to the Internet to accomplish something quickly and efficiently, but that is not necessarily the best place for an advertisement. Can you recall the last advertisement that popped up

on your computer screen? What about the company that was adver-tising itself? Most likely not, and you are not alone. These ads don’t pique most people’s attention. It is not uncommon for somebody to unwind by reading a magazine or newspa-per. In a relaxed environment is where information, in this case an advertisement, will be noticed.

New advertising techniques are always better.

Wrong again. “Out with the old, in with the new” shouldn’t apply to everything. People may argue that spreads with advertisements are flipped past, happens to the hun-dreds of emails consumers receive a day titled “Cyber Monday sale” “Going, going, gone” or “All orders over $50 take $5 off!” They go direct-ly into the deleted items folder. Although the saying “print is dead” has been echoing through the adver-tising world, research shows differ-ently. Penn State conducted a study, that concluded that print ads stick with customers more than online ads. Print is also an advertising tech-nique that can stimulate multiple senses. Take sample perfume ads in magazines, or shopping catalogs, or sample textures in home improve-ment magazines and pamphlets. A potential customer is not going to be feeling, or smelling anything through

the Internet. By stimulating senses, an advertisement becomes more interesting and memorable.

Internet and multimedia ad-vertising is important

True. Although print advertising continues to prove itself in the mar-keting world, other forms of adver-tising are important as well. Many print ads include the company’s website to provide more informa-tion. Integrated marketing programs have been proven to be extremely successful if correctly executed and almost always involve print ads.

The use of print advertising is increasing.

True. The biggest myth of all is that print advertising is quickly slip-ping through the cracks. This couldn’t be more wrong. According to Media Radar, the medical and pharmaceutical, home furnishings, technology, and beverages categories have all published more print ads than the year before. Ralph Lauren, Chanel, Calvin Klein and Louis Viton amongst other luxury brands have dramatically increased their print ad spending since 2012.

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Print Advertising Dead? ...continued from page 5

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