december, 2016 - national apartment association · december, 2016 . dear cam participant, thank you...

December, 2016

Dear CAM Participant,

Thank you for your participation in the Certified Apartment Manager credential program. The CAM credential is a critical step in the career of the apartment industry professional.

Some changes were made to various sections of the CAM courses since the original Onebook was produced in the summer of 2016. To ensure that you have the most up-to-date version of all materials, we are enclosing the edited pages for your reference. Please exchange these pages for the originals in your binder. The module name and page number can be found on each page.

Good luck on your path to obtaining the CAM credential.

Sincerely, Shana Treger Director of Education NAAEI

© 2016 National Apartment Association 6

Certified Apartment Manager SM Participant Workbook Industry Essentials

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Certified Apartment Manager SM Participant Workbook Financial Management

Income Statement Figures Figure Description Formula

Gross Potential Rent (GPR)

The amount of rent that would be collected if a property was 100% occupied & all residents were paying market rent.

# of occupied units x avg. market rent

Gross Potential Income (GPI)

The income of occupied units at existing lease rates and vacant units at current market rents.

# of occupied units x avg. mo. rent + # of vacant units x avg. market rent

Vacancy, Concession & Collection Loss (VAC)

Total value of rent loss from vacant units, concessions, collection losses, and non-revenue units.

Total Rent Revenue The amount of GPR less vacancy, concessions, collections loss and nonrevenue units. Also called Net Rental Income (NRI).

GPR-VAC=TRR

Other Income (OI) Income from items other than rent e.g. laundry, vending, parking, late fees, pet fees, etc.; can be up to 10% of total property income.

Effective Gross Income (EGI)

The amount of GPR less vacancy, concession, collection loss and nonrevenue units plus Other Income. Total property revenue from all sources.

GPR - VAC + OI = EGI

Operating Expenses (OE)

Includes all expenses, fixed and variable, incurred in the course of managing the property. Capital Expenses are not typically included.

Net Operating Income (NOI)

The total net revenue that remains after all operating expenses are deducted from total income.

EGI - OE = NOI

Operating Expense Ratio

An expense to income ratio showing the percentage of Effective Gross Income (EGI) needed for Operating Expenses. It is used to measure property performance and expense control.

OE ÷ EGI = OE Ratio

Capital Expenses (CE) Non-recurring capital expenditures such as appliance replacement, renovations, roofing, etc. intended to add to the life of a property.

Replacement Reserve (RR)

Replacement Reserve (RR) is an account used to set aside money for anticipated future expenses/large projects.

Debt Service (DS) A mortgage or loan payment (principal and interest). Oftentimes the RR payment as well as real estate taxes and insurance premiums are paid as part of the Debt Service.

Cash Flow The money remaining after all sources of income are collected and all property expenses (including CE, RR & DS) are paid.

Full calculation: GPR - VAC +OI = EGI EGI - OE = NOI NOI - CE - DS - RR = CF

NOI - DS - CE - RR = CF

Break Even Occupancy Ratio

Calculates the occupancy level needed to earn enough to pay the operating expenses and debt service.

(OE + DS + RR) ÷ EGI

Break Even Rent Per Square Foot

Calculates the rent per square foot needed to pay the operating expenses and debt service. Helps identify necessary rents needed to cover all property expenses (including Debt Service).

(OE + DS + RR) ÷ Total Sq. Ft.



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Return on Investment

Gain: Cost:

Cash-on-Cash Return

Annual Cash Income: Total Cash Invested:

Capitalization Rate

Purchase Price: Cap Rate:



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Certified Apartment ManagerSM Participant Workbook Marketing

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Certified Apartment ManagerSM Participant Workbook Marketing

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Certified Apartment Manager SM Participant Workbook Property Maintenance for Managers

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Types of Maintenance Types of Maintenance You will oversee the Maintenance Supervisor or Service Manager, but the Maintenance Supervisor or Service Manager is responsible for the “market-ready” condition of a property.

Type of Maintenance

Description What is Included

Exterior Repairing or replacing items to keep building exteriors in excellent condition

• Landscape irrigation • Exterior lighting • Siding and roofs • Fences and retaining walls • Drives and parking lots • Sidewalks and other concrete surfaces • Trash enclosures • Doors and windows

Interior Repairing or replacing items to keep building interiors in excellent condition

• Walls, ceilings, windows, floors • Safety components

o Smoke/CO detectors o Fire extinguishers

• Doors, cabinets, counter tops • Electrical and mechanical • Appliances, plumbing, HVAC

Make Ready Repairing or replacing items to make a unit “market ready” and meet the expectations of prospective residents

1. Pre-inspection 2. Trash removal 3. Pest control 4. Mechanical systems –

electrical, plumbing, appliances, HVAC

5. Retrofits & rehab items

6. Drywall, doors, windows, screens, locks, cabinets, counters, vanities

7. Shelving, towel racks, ceiling fans

8. Storage rooms, pantries

9. Painting, caulking 10. Flooring 11. Drains, sinks, tubs,

showers 12. Post-inspection 13. Final cleaning and

welcome gift



Type of Maintenance

Description What is Included

Capital Expenditure

Projects

Large, non-recurring property expenditures that add to the “useful life” of a property Note: Depreciated over an expected life rather than a single year and are not used to calculate NOI

Non-recurring expenses, such as: • Replacing a roof • Painting buildings • Repaving a parking lot • Adding a swimming pool

Preventative A proactive approach to protect and maintain the value of property. It maintains the property so deferred projects do not overwhelm staff and helps meet requirements for inspection set by authorities.

All aspects of interior and exterior areas of a property.

Moisture Management

Plan

A plan outlining how to deal with maintenance issues related to water damage, moisture infiltration, visible mold, or musty/moldy odors

• Many lenders and insurance carriers require properties to have a plan

• Treat issues of this type as emergencies and follow a specific protocol

• Know what actions to take for water damaged materials

• Carpet, backing and pad • Ceiling tiles • Cellulose insulation • Fiberglass insulation • Concrete or cinderblock surfaces • Hard surface, porous flooring (linoleum, ceramic

tile, vinyl) • Non-porous hard surfaces (plastics and metals) • Upholstered furniture • Wallboard (drywall and gypsum board) • Window drapes • Wood surface



Maintenance Technician Skill Levels This is a list of examples and is NOT a comprehensive list.

Entry-Level skills Mid-Level skills Senior/ Supervisory skills

• Basic knowledge of tools • Interior make-ready skills

including minor painting • Basic electric: changing light

bulbs, testing outlets and switches

• Follows directions well and understands safety requirements

• Good communication and organizational skills

• Willingness and ability to learn new skills

• Certified Pool/Spa Operator

• CAMT or equal • Legibility in writing • Repair/replacement of building

components • Troubleshooting • Familiarity with appliances • Lock and key security • Interior repair including

carpentry and drywall • Electrical: ohms low, meter • Read and explain diagrams • EPA if required • Ability to perform emergency

on-call visits • Plumbing: toilets, faucets,

fixtures, drains • Basic computer skills

• Budgeting skills • Building codes • Ability to train others • Research • Accountability and mentoring • Read and understand property

management and hearing reports

Additional Considerations

• Number of years and type of experience • Formal education • Training in industry designations • Experience working with contractors and suppliers • Ability to take/give directions • Ability to maintain schedules • Computer skills

• Administrative skills such as: o Organizing and prioritizing o Time management o Record keeping o Communication skills

• Professional attitude and appearance



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Certified Apartment ManagerSM Participant Workbook Risk Management

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Certified Apartment ManagerSM Participant Workbook Risk Management

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Certified Apartment ManagerSM Participant Workbook Legal Aspects and Responsibilities

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Certified Apartment ManagerSM Participant Workbook Legal Aspects and Responsibilities

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Classifications of Modifications The cost of maintaining a modification depends on who uses it. If it is used only by the resident, such as a ramp to the front door or grab bars, the resident would maintain it. If it is used by others as well, such as a ramp to the laundry room, the owner is responsible for maintaining it.

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May or may not be required to be restored to original condition

Can be required to be restored to original condition

Can be required to be restored to original condition

n/a Does not require escrow account Does require escrow account


Certified Apartment ManagerSM Participant Workbook Human Resources

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Cost of an Employee Scenario Part One:

Earnings: Your full-time maintenance technician earns $15 per hour. He regularly achieves performance goals, earning him an additional $500 non-discretionary bonus per quarter.

Benefits: His benefit plan includes health insurance and 401k employer contributions. The company also pays his workers’ compensation insurance and unemployment insurance. The total cost of all benefits is 30% of the employee’s total pay.

Housing: He receives a 50% discount on his three-bedroom townhouse. The market rent for this unit is $1,200/month.

1. How much is the maintenance technician’s total payroll cost?



Cost of an Employee Scenario Part Two:

Each month the same maintenance technician logs an average of 20 hours of overtime each month to get 3 vacant units turned and ready for occupancy.

2. Assuming overtime is paid at time-and-a-half of the regular rate, what is the total overtime cost per hour of this employee?

3. At 20 hours of overtime per month, what is the total annual compensation of this employee?

4. If the manager hired a contractor to turn those 3 vacant units per month for the entire year at $500/unit, what would the cost to the property be?



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Conflict Resolution Approaches

Approach Description Avoidance If the conflict is minor, sometimes it is best ignored. Interference

can often cause even more conflict. Accommodation If a solution can be reached with an easy accommodation, give

it a try. It is not always worth risking damage to relationships or causing more conflict.

Win/lose You really are in charge and occasionally you must force the issue.

Compromising All parties give a little and a compromise is reached. Often there is more than one way to reach a goal.

Problem Solving Open communication can help develop a mutually beneficial solution for all parties.


Certified Apartment ManagerSM Participant Workbook Resident Experience

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Certified Apartment ManagerSM Participant Workbook Resident Experience

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Creekwood 2017 Budget Activity WorksheetUse 2015 year end numbers for all calculations

Current

Instruction

Increase rents by 3% across the board

Reduce vacancy loss to 6.5%

Total Rent Revenue

Increase Other Income to $500 per unit

Effective Gross Income

Amount

Current

Annual Budget

New Total Answer

Annual Budget

Position

Manager

Leasing

Maint. Supt.

Porter

No. of Units

6

74

42

122

Current Pay

$21.00

$11.00

$19.00

$10.00

Total Pay

Sq. Ft.

415

620

715

Mo. Rent

$560

$630

$730

Free Apt.

2 BR / 1 BA

8,760

Total Sq. Ft.

Allocation

100%

60%

100%

50%

Total Rent

Surcharge

25%

25%

25%

25%

Rent/Sq. Ft.

$1.35

$1.02

$1.02

$1.03

$12.36

Rent/Sq. Ft. New Mo. Rent

Total Payroll Total Payroll

Unit Type

Studio

1 BR/1 BA

2 BR/ 1 BA

Total/Mo

Total/Yr

Payroll

Unit Information

Creekwood Second Quarter Summary and Marketing Plan

New Total Rent

47 Creekwood Second Quarter Summary and Marketing Plan

Instruction

All employees get a 2.5% Increase

Management fee goes to 4.5%

Total Operating Expense at 45% Ratio

Net Operating Income

Debt Service - same as 2015Capital Expenses - same as 2015

CASH FLOW

Amount New Total Answer

At a cap rate of 7% - what will the property value be?

Expenses

december, 2016 - national apartment association · december, 2016 . dear cam participant, thank you...

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