The Apartment Consultant eBook:
Create a Financial Fortress in 90 Days or Less Investing in Apartments. Start Here>>
Why Invest in Apartment Buildings?
Many investors have found that investing in apartment buildings is a great choice because of the huge demand and the low risk. More>>

QUIZ: How Healthy is Your Apartment Building?

Check Your Apartment Property Vital Signs Right Now!


Just like when you go to the doctor’s office for an exam and they check your vital signs (height, weight, temperature, and blood pressure), likewise you should give your apartment building a check-up regularly and check its vital signs.

We have developed a short and quick self-check exam you can administer on your property with little effort. Just answer a few questions and total your score below.

The exam grades you on levels of EXCELLENT, PASS,or FAIL.

  • EXCELLENT is a great score and your health is great. Keep doing what you’re doing. All systems are working well.
  • PASS is an average score and there several areas you need to improve quickly. Don’t rest on your laurels and don’t settle for average.
The exam grades your apartment in seven areas of performance: Accounting, Revenue, Internal Controls, Property Staff, Marketing System, Maintenance, and Marketplace.

Take this exam by answering the questions and by choosing yes or no, you’ll be assigned points. Total the points in all 7 categories to complete the test.

Accounting
    Yes No
1 You personally know the cash flow status of the property 3  
2 Mortgage payments are current 5  
3 Property real estate taxes are current 5  
4 Payables (bills) are not 60 days old or older 3  
5 Monthly property financials are accurate and readily available 3  
6 You operate from an operating budget and keep track of it 3  
    Total  


Revenue
    Yes No
1 Rents have increased over the last 12 months 2  
2 Lease renewals are getting rent increases 2  
3 Occupancy rate has increased over the last 3 months 3  
4 Tenant turnover has decreased over the last 6 months 3  
5 Overall tenant profile is not getting worse 2  
6 Rent concessions have decreased or remained the same over the last 6 months 2  
    Total  


Internal Controls
    Yes No
1 Expirations of leases are being tracked and managed 4  
2 Delinquent (late) rents is below 5% of the gross potential income 3  
3 You have a system to get vacant units rent ready quickly 3  
4 Operating expenses are at or below local market average ($/unit) 3  
5 You have and use an operating budget 3  
6 Tenant turnover is lower than local market averages 3  
    Total  


Property Staff
    Yes No
1 There is ample money, equipment, or people to carry out normal and daily operations and functions 5  
2 All management personnel are qualified, experienced, and motivated 4  
3 Personnel turnover is less than 50% over the last 12 months 3  
4 Good communication exists among all property personnel 3  
5

Property's policies and procedures are consistently adhered to

 2  
6 Key manager(s) work a normal week and not late nights and weekends 2  
    Total  


Marketing System
    Yes No
1 An agreed upon marketing plan exists with goals, action items, and measures 5  
2 Market surveys are completed every month 3  
3 Leasing traffic is tracked and reviewed 4  
4 Surveys of lost rentals are done to find out why prospect didn't rent 3  
5 Property has a target market, an ideal tenant profile it markets to 3  
6 Supervision and sales marketing is ongoing 3  
    Total  


Maintenance
    Yes No
1 Ongoing capital improvements are done to maintain curb appeal 5  
2 Overall the property is clean and shows well 4  
3 There is a preventative maintenance program 2  
4 Relationships with local contractors are good 3  
5 You do not strip vacant unit parts for maintenance of other units 3  
6 Maintenance budget exists and is tracked 3  
    Total  


Marketplace
    Yes No
1 The local apartment market is weak, lots of apartments available for rent    
2 Local economy is weak, job losses    
3 There is new local direct competition    
4 The property is obsolete and not desirable for the market    
                                                Total      
                                                                                                                                         
                                                                                                                                         
Total Points                       

 
Scoring System
1.    Add up the points in each category
2.    Total all the points in all 7 categories
3.    Write in your score into Total Pts box
4.    Compare your score to the grading system table to see how healthy your apartment investment is
 
Grading System
Points Grade
108-131 Excellent
85-108 Pass
0-85 Fail

If you scored:

EXCELLENT: congratulations and job well done. Your systems appear to be working very well. Keep doing what you’re doing, but there is always room for improvement. In a nutshell, here is every apartment owner’s or managers overall goal:
          I.    Maximize potential rental income and reduce operating costs.
        II.    Strengthen tenant retention and relations.
       III.    Enhance visual appeal of property and increase property value.
 
Having all 7 categories working together in unison allows this to take place. If one of the categories begins to fall, it will definitely start to affect other categories.
 
 
PASS: you have work to do and you’re vulnerable. Improvement is needed and quickly. Keep in mind that once an apartment building starts to not perform well, it takes twice the effort and money to regain the momentum. Here’s the key to stability: Don’t lose the momentum! A passing score is actually a warning signal. It’s a signal that several categories need swift attention and correction. What you don’t confront will not change. This is also a signal of great opportunity for your property to make excellent gains in cash-flow and in value. Analyze each category and begin to implement first the improvements that will give you the “biggest bang for your buck”. Next, implement the longer range strategies. Your goal is to eventually be upgraded to Excellent.
 
 
FAIL: You are in danger and in a deepening tailspin. Foreclosure and loss of all of the equity is imminent here if you don’t get emergency help right now. Call The Apartment Consultant at 1-415-657-3397 or a company that specializes in turning around failing apartment investments. There is no time to waste.

 
Consult with Peter
If you’d like to set-up a free consultation with Peter to discuss your distressed apartment property, please either call the main office at 1-415-657-3397 or e-mail your request to peter@theapartmentconsultant.com. Your request will be promptly answered usually within one day.