SF Apartment : May 2016


Top-Tier Turnovers

by Jennifer Pittman

Step up your apartment turnover game by following the advice of the experts. 
Outdated fixtures, dusty blinds and occasional lingering smells are just a few of the issues on every property manager’s long maintenance checklist as they prepare rental units for new tenants. To step up your game and turn over apartments efficiently, however, owners would do well to heed the advice of people who oversee maintenance for thousands of units in San Francisco. Go beyond the basic painting and cleaning and hold a long view, these experts say.

Use a checklist, the experts advise, and be as specific and thorough as possible. Each item needs to be checked off to make sure it’s been tested for a new tenant.
Cleanliness, lighting, and operational appliances are on every tune-up list. Each unit needs bright bulbs and freshly paint-rolled walls. Windows need to be cleaned on both sides—especially if the unit looks out onto a busy street, as soot and exhaust can quickly build up on the panes.

“Anytime you turn over an apartment, you want it to be immaculate,” says Craig Berendt, a broker with Berendt Properties, a full service property management company in San Francisco. “You’re trying to find small problems before they become big.”

Add smell and an updated color scheme to the shortlist of top priorities.
“You open the door and the waft will hit you, and it better be good,” says Phill Boersma, a real estate broker and executive managing director of ARA, A Newmark Company, which is involved in ownership management of over 200 units 
in San Francisco.

For paint schemes, the color palette has shifted from the warm, earthy tones of the ’90s to cool whites and grays, several managers say.

Touch-Up or Update?
Just how much to do between tenancies depends, of course, on the previous tenants themselves. How long were they there, and how well did they maintain the premises? Additionally, the consistency and regularity of your ongoing maintenance and repair program factors in as well.

Property owners in San Francisco’s tight housing market might not feel an urgency to upgrade. “I don’t think you need updates,” Boersma says. But the question is, Who is your preferred tenant?

“If you have a unit that’s ten years old and you do a paint and clean, that’s fine,” Boersma says, and you’ll get another long-term tenant. But, if you’re looking to achieve top market rent, you need to do the upgrade. “The nicer your unit is, the better your tenant profile will be,” he says, adding, “The tenants that rent the nicest units tend not to stay that long.”

The level of the work will also depend on the locale. Neighborhoods differ in character as well as in price point.

For example, Pacific Heights units require better upgrades than units in the Tenderloin, according to Eric Andresen, owner of West Coast Property Management and president of the San Francisco Apartment Association Board of Directors.

“The overall condition of the rest of the property also plays an important role in the successful and quick turnaround of a vacant unit,” Andresen says. Clearly, building-wide systems such as plumbing, heating and electrical have to be maintained and monitored at all times, no matter what, he says. “These systems all have to be maintained for the sake of the total property.”

For more of Andresen’s thoughts on best maintenance practices, please see his President’s Report.

The World of Regulation
After the basics, property managers focus on municipal regulations, updates and details, long-term issues and tenant relations.

“The most important thing is the Health and Safety and code compliance,” says Berendt. “That’s where it all begins. When we take over a building, we have a whole checklist and then yearly we go through each apartment and inspect for lead, mold traps, radiators and potential leaks.”

The long running list of safety certifications includes annual boiler inspections, five-year sprinkler tests, requirements for exit signage, keeping fire escapes in good condition and maintaining a shut-off tool near the gas meter. San Francisco conducts periodic inspections of the exterior and common areas of residential buildings with three or more dwelling units as well as hotels consisting of six or more guest rooms. The San Francisco Department of Building Inspection posts an information maintenance checklist online, which can be accessed here.

The Finer Touch
While there are hundreds of apartment maintenance checklists available online, property managers say it’s attention to the small touches that can make a profound difference to prospective tenants.

Perhaps it’s a nicer light fixture, an upgraded faucet, light dimmers or clean trim. 
Boersma recommends wiping down baseboards, having appliances professionally cleaned and spending a little extra money on wooden blinds rather than hanging cheap aluminum slats. Something as simple as replacing outlets and outlet covers can help the unit look and feel cleaner.

Many of the finer details can be detected emotionally before they’re consciously observed. “Visually, tenants react to things even though in my opinion they don’t know what they’re reacting to,” Boersma says. “It just looks better.”

Even when you’re turning over a unit after a short-term tenancy, the goal is the same: to bring the unit back to the pre-rental condition, says Craig Lipton, a general contractor and owner of Maven Maintenance. “A good cleaning goes a long way.” Lipton suggests paint-rolling walls, changing toilet seats and replacing blinds as needed.

“We always check the kitchen and bathroom for leaks, and check the caulking in the kitchen and bathrooms. We replace light bulbs and the batteries in the smoke and carbon monoxide detectors, clean the carpets, and if needed we coat the hardwood floors,” Lipton says. “My resident manager checks our units for leaks once a year, and I always remind her to look at the ceiling in the kitchen and bathrooms to see if there is any indication of a leak from the unit above,” he adds.

For San Francisco’s older housing stock, updates can be somewhat tricky. Renters are often drawn by the city’s historic charm, but simultaneously, they want everything new. It’s a fine line to balance a period-appropriate look with upgrades.

How do you differentiate your unit from the next apartment a potential tenant sees?

Just as the color palette has evolved, so have interiors. The contemporary look includes square-edged stone counters, an open layout for the kitchen and dimmer switches on lights. It’s this kind of attention that can make a profound difference to prospective tenants.

Attention to detail can boost the unit’s online marketing presentation as well—especially since prospective tenants are often culling through hundreds of units on the internet.

The Long-Term List
After a longer-term tenant vacates, in most cases a full paint job is required. Carpets are replaced and hardwood floors are refinished. Even if there were no complaints, the turnover checklist includes new blinds, radiator valves, light fixtures and maybe some appliances, Lipton says. After a very long-term tenant moves out, the list grows again and includes retiling bathrooms; replacing kitchen cabinets, counters and faucets; replacing toilets; and possibly upgrading electrical panels.

“We really have to assume that every tenant is going to be there for ten years or more,” Andresen says. “A unit needs to be brought up to the best condition for the market segment it fits in.”

Boersma agrees. After a ten-year tenant, owners need to seriously think about upgrading kitchens and bathrooms. The all-white appliances and the ceramic tiled countertops should be replaced with stainless appliances and a quartz counter top. Put in a new medicine cabinet in the bathroom, and upgrade to modern lighting fixtures.

The biggest problems in multifamily apartment buildings often come from plumbing-related issues, so it’s critical to keep an eye on roofs, pipes, walkways, corridors and exterior windows. Prevent costly leaks by cleaning gutters, inspecting the roof and checking for peeling paint inside and out.

Owners shouldn’t overlook long-term upgrades, especially since most of the rental properties in San Francisco are older buildings. Staying ahead of long-term maintenance issues is critical to keeping both individual units and the building as a whole in good shape over the long haul. Keeping a preventative eye on your building systems, roof and pipes will pay off. Regular maintenance can prevent expensive emergencies and after-hours work.

For many owners, their investment property is one of the most valuable assets they own. “For this reason, I always suggest that my clients spend the extra money to upgrade their properties and units if they can afford to do so,” Lipton says. “It reduces maintenance costs down the road, generates higher revenue today and increases the value of the property.”

“I have several clients who have recently asked for advice on their elevators that are constantly breaking down,” Lipton says. “Should they consider switching elevator companies? The issue generally is not the elevator company—most elevators in San Francisco are nearly 100 years old, well past their intended useful life. A long-term plan for protecting and improving a rental property is always encouraged.”

In the last 24 months, Lipton has been focused on renovations of not only apartments, but back stairwells, lobbies and laundry rooms.

What kinds of things are often overlooked or hard to catch?

“Old plumbing and electrical,” Andresen says, “especially if you’re only doing a standard cleanup to prepare a unit.” Full remodels will open walls, exposing aging systems to permitting and inspection.

The Tenant Conversation
The best way to ensure a more efficient, speedier turnover is to keep up with repairs while a unit is occupied. That means cultivating a reporting relationship from the beginning. It starts with the initial walkthrough, continues with regular correspondence and a works best when there is a rapid response to problems. 
Some managers send quarterly reminders to tenants to report any problems, and to keep their eye on potential issues related to the coming season.

Do It Right
Turning over an apartment is a great opportunity to not only upgrade your unit and maximize its rental potential, but to also take preventative measures to ensure your unit and building are in great, safe shape. Having good communication with tenants and making timely repairs means you’ll be in for fewer surprises when the unit does turn over. Working with a checklist will increase your efficiency as you ready the unit for the next tenant, who will surely appreciate your efforts.

Jennifer Pittman is a freelance business writer in Soquel, California. She can be reached at jennifer@jenniferpittman.com.