Malcolm Bennett: NAA Helps to Bring Education, Legislation
COMPANY: International Realty & Investments
NO. OF UNITS: 1,485
PLACE OF BUSINESS: Los Angeles and Long Beach, Calif.
Q. How long have you been an apartment owner?
A. The first apartment building I owned was a three-unit building that I purchased in 1973.
Q. What is the greatest value NAA and your local association provide to your business?
A. Education and information top the list. Through my NAA membership, I not only can access local legislative issues, but am involved with federal legislation through the National Multi Housing Council as well. My local association, the Apartment Association of California Southern Cities (AACSC), provides local information along with local advocacy. We’re able to work with elected officials carrying the voice of a larger number of property owners, as opposed to me carrying a single banner.
Q. Are there specific budgeting or operational strategies that you’ve employed to offset the hike in vacancies due to the economy?
A. Our firm has taken strategic steps to not only assist our owners, but my personal profile as well. Facing higher vacancies, we have increased our marketing efforts to include the expanded use of websites, rental listings and move-in incentives, and we improved our signage. We also offer a number of move-in specials in certain neighborhoods; however, we are careful not to lock in low rents in rent-controlled areas.
We spend more time in our market area to ensure that our vacant units are in superb condition. This helps us to determine how we can direct more traffic to our properties, which in many cases means improving the curb appeal.
Q. Partnering with other investors can be a key component to purchasing
property and leveraging financial obligations and risk. What recommendations can you make to those reaching out during this current
economic environment?
A. Partnering with investors can be worthwhile; however, key consideration must be given to how the relationship is structured. An investment partnership can have the same potential outcome as when a marriage goes bad.
With the proper legal advice on the structure of the entity, downturns in the market present excellent timing for investors to join together to leverage
financial positions while reducing individual risks.
I suggest that our clients look at current investments with the possibility
of long-term holding. I also believe there has never been a better time to
purchase investment property.
Q. How are you managing to control expenses such as utilities and maintenance given potential rising costs in these areas?
A. Controlling costs has always been one of our biggest concerns. The need for cost reduction has never been greater than it is today. We were successful in working with the Los Angeles City Council to get a “no” vote on a large rate increase proposed by the Department of Water and Power. This increase would have had a highly negative impact on rental property owners.
We have reached out to supplier partners who may be able to provide the same quality and level of service at a more competitive price based on the current economic environment.
We are performing more frequent interior inspections to reduce the possibility
of unreported plumbing leaks. We also changed many of our exterior faucets at a number of properties to reduce unauthorized use of water fixtures.