Welcome to 2010! Doesn’t it just seem like yesterday we were all concerned that the arrival of 2000 would wreak havoc with our computers and our banking systems. What a difference ten years makes. We did end up in trouble however it turned out to be man-made, not a computer glitch.

Yes we have all gone back and kicked ourselves for not doing something different with our investments.

We should have sold, we should have been in cash we should have done (a million things). As bad and as painful as this last year was, there is a lot that we can learn from it. In economic investing, it’s perhaps paying more attention to our investment portfolios. In commercial real estate it’s rethinking leverage. Over the long term, our lessons will help us. More importantly, what can we do in the short term? I would like to suggest that we all take as step back and create a new year’s resolution for our properties. A good start is, how we can put our best foot forward when it comes to our buildings and rental units.

Let’s start with the outside of the building. Are the plants and landscaping done to give the exterior the best possible look? As a professional property manager, I spend most of my time driving looking at different buildings. Much to my wife’s horror, I typically am looking left or right at the buildings instead of straight ahead. I am always surprised at how many buildings are languishing without any exterior foliage, or if there is, how often it is left unkempt.

How about the for rent sign? Is it professionally done or is it a $4.50 sign purchased from the hardware store? If you are using an A board, is it fresh and looking good or is it scratched, dented, and barely legible? One of the worst, which I see all the time is a board that has another number pasted over the original one. If management can’t keep up a small sign, how do you think they are doing in the rest of the building? I’ll say it once … “First impressions are VERY important.”

Try acting as a prospective renter. When you come in the front door, are the hallways clean? When you look at the common areas such as the laundry room, is it swept? More often than not, I find that area is one that is disregarded by owners. Is it well lit? Think about it. How much time do your tenants spend in that area? From my rental days, it is a lot. I’ll say it twice … “First impressions are VERY important”.

I spend a lot of time visiting different properties that we do not manage to keep my fingers on the local market. I am absolutely shocked how often I am shown a unit that is not “RENT READY.” The unit has been partially painted but is not finished, the blinds are bent or missing, the stove and floors are dirty, or one of the biggest sins, the lights are inoperable because the bulbs have not been replaced. I always ask about it and I always get the same answer … “Oh, we are still working on it.” How many tenants are lost because of a bad first impression? OK, third and last time, “First impressions are VERY important!”

One last issue I would like to touch on and perhaps the most important is the on-site manager or in many cases, you the owner. As professional managers and owners, we are always doing rental comparables. I cannot tell you how many messages (perhaps 40% or more) go unanswered by the managers. Sometimes we will call and leave a second or third message. All go unanswered. I am not surprised to see the same “for rent” sign stay there for the same unit, often times for several months.

Yes, 2009 was tough. I believe 2010 will be better. The rental market is tough and will remain so. It is imperative that building owners or management keep their properties looking sharp and the person responsible for leasing on the ball. You would not sell a car without washing and polishing it, so why treat your rental unit any differently? The results may surprise you and your properties bottom line will certainly be enhanced.

We would be glad to walk through your property and give you or comments or suggestions. In any case, put putting your best foot forward a new year’s resolution when it comes to your rental properties. You will be glad you did!

About the Author

Bruce A. Kahn, CCIM, CPM is a Managing Director of Foundation Group Investment Real Estate Solutions, a full-service property management and brokerage company. He has earned the designation of CCIM (Certified Commercial Investment Member) issued by the CCIM Institute, and is a CPM (Certified Property Manager) with the IREM (Institute of Real Estate Management). For further information or for a property analysis, please contact him at 206-324-9424 or by email.