Consistent with our core fundamentals of Technology, Education, and Industry Involvement, we spent this fall participating in numerous industry events. A number of team members attended five different industry events, and we are now in the process of digesting all the new industry trends and knowledge we obtained, and determining what and how to apply this new found information.
Education plays a large roll at Birch Management and we are proud to announce that Amanda Bailess, Director of Operations and Personnel has earned her NC Real Estate Brokers License. Mrs. Bailess attended 90 hours of classroom sessions and then passed 2 tests to earn her Brokerâ€™s License. Way to go Amanda!
Lee Porter, our CEO was elected to serve as a counselor for the Institute of Real Estate Management (IREM) Chapter 56. The counsel is made up of 6 Certified Property Manager (CPM) members of the local IREM chapter and serve a 2 year term. Additionally, Mr. Porter was re-elected to the NC Association of Realtors Property Management Division for another 2 year term. Lee currently serves as the Boardâ€™s Chairman for 2015.
We feel that it is of utmost importance to be involved in our industry to promote the efforts of our industry for the benefit of our clients. Additionally, our team members receive invaluable information for the benefit of our clients. For example, very seldom do we take over a property, whether self-managed or from another firm, that is fully compliant with legally mandated life safety measures. These laws have changed multiple times over the last several years and is among the landlordâ€™s greatest liability.
As we head into the traditionally slower period of the year, we will be digesting and planning our enhancements for 2016.
It has been no secret that massive amounts of capital has been plowed into the single family rental space since 2008, some reports have the estimates in excess of $1B. We have well documented the changes that this investment has brought to the industry, the typical renter, and the typical landlord. As the Real Estate Investment Trusts (REITs) have tapered their acquisitions and focused on operations, we are seeing some trends that are noteworthy.
Net operating margins for 3 of the largest publically traded REITs has been recently reported in the range of 49.9-58.6% over the past year. For the entire Birch Management portfolio, we have achieved a net margin of 71.94% for the first 3 quarters of 2015.
Turnover is the biggest expense that a landlord typically has. In looking at the turnover rates and costs, the numbers paint a very strong picture for Birch Management. Of the same 3 publicly traded REITs, a consensus turnover (when 1 tenant leaves and the another comes in) number was 49.6%. Turnover expenses have been reported at an average of $1,250 per turn, exclusive of advertising, leasing, and other tenant placement fees, which easily shows the cost associated with turnover.
Birch Management has a very strong tenant retention program and consequently has a turnover rate of 24% through 3Q2015, indicating a retention rate of 76% of our residents.
Property maintenance is a necessary evil of the rental business, but presents a great opportunity to shine. Not only are you more likely to retain a resident if maintenance requests are responded to promptly, but typically the cost of future repairs will be lower if the property is well maintained. REITs recently reported and average per unit annual maintenance cost of $1,500. Through 3Q2015, Birch Managementâ€™s per unit maintenance costs were running $885, indicating annual per unit cost of $1,180, 21% lower than national operators.
One of the biggest drivers of occupancy and rental rates is a marketâ€™s labor market. The obvious impact of a positive labor market is a landlordâ€™s ability to reduce vacancy and raise rental rates, another impact that is little talked about is the supply of skilled construction workers.
The lack of job, and income, growth in our market has hampered the ability to push rental rates anywhere near the levels that many markets across the country have been able to. Our market has only created 2,500 (0.73%) net jobs over the last 27 months, which is anemic by any standards although better than the 90,000 jobs that our region lost from 2000 to 2010. Multi-family statistics indicate steady rent increase (see page 2 for historical data), however, remember it was commonplace to have rent concessions equaling 30% +/- prior to the rise.
As referenced in the preceding article, maintenance costs are a significant portion of a landlordâ€™s expenses. The national construction labor market has led the jobs numbers with a 6.0% annualized growth rate as of October 2015. The result of this growth has pushed many workers into the construction area, versus maintenance, reducing the number of skilled maintenance workers to perform maintenance on both commercial and residential properties. Obviously, this has led to fewer qualified maintenance workers and higher prices.
Toll Free Direct Number: Our clients can now simply dial a toll free number 1-844-5CLIENT (525-4368) to be routed to our entire Client Services Team. If someone is available your call will be answered, if you get our client voicemail please leave a detailed message so we may return your call as soon as possible. Do keep in mind that our Client Services Team is always on the go evaluating the needs of
Owner Web Login: Our industry leading owner web login on our website is our clients' link to their information. Here is a sample of the information that is available by logging into your secure account on our website:
- Account Balance
- Open Payables
- Open Receivables (has my tenant paid)
- Service Issues
- Posted Invoices- retrieve and store copies of all invoices posted to yur account
Operating Schedule: Our regular operating hours are Monday to Thursday 8:30am-5:00pm and Fridays from 8:30am- 4:00pm. Our next scheduled office closings will be November 26 & 27, followed by December 24, 25, 31, and January 1, 2016.
Our mission is to offer personalized and professional service to both our clients and customers by building strong relationships, utilizing the latest technology, implementing effective marketing strategies, following consistent systems all with honesty and integrity throughout every facet of our business.