This article was posted on Tuesday, Oct 01, 2013

Internet entrepreneurs are working diligently to create free online resources for everything of interest to the general public.  These efforts have resulted in a more transparent world, and if it hasn’t happened already, will soon have a direct effect on your existence as a multi-family owner.  Your properties, your managers, and you personally, if you have personal involvement with your tenants, will soon have a significant online presence, and it will be created legally without your consent.

Yelp is an excellent example of a company you should be familiar with.  YELP, Inc. is a San Francisco based company, and their website allows users to review hundreds of thousands of businesses located in every city.  If the business does not exist on Yelp, any user can create a profile for that business and write the first review.  Eventually, other users will add more reviews, pictures, and ratings.  Popular restaurants, clothing stores, car dealerships and a wide variety of other businesses in major cities often have hundreds of reviews.  Be aware, an individual apartment building is considered a business by the Yelp community.  Your apartment buildings may already have profiles on Yelp where your tenants are praising or criticizing you for the entire world to see.  Yelp users serve up harsh criticisms or high praises for businesses depending on their unique experiences.  In addition to their commentary, users rate each business using a scale of one to five stars (one being the worst / five being the best).  The site is entirely free to the general public, and it receives millions of daily views.  Yelp is one of the most heavily trafficked websites in Los Angeles.  It has become the norm for many of our city’s residents to conduct some research on Yelp before driving to any place of business.  Yelp, Inc. is now a publicly traded company valued at nearly $1 billion and has over 1,200 employees.  Yelp and companies like it are here to stay, and it is a mistake to think otherwise.

Hundreds of apartment communities in L.A. already have well established Yelp profiles.  Many of them have very low ratings, and this negative online presence can make leasing exceptionally difficult at those properties.  Conservatively speaking, many experts in this field (myself included) believe that most apartment communities in the core parts of L.A. will have an established Yelp profile within just a few years.  Soon, people will not even have to manually look up a business on Yelp, meaning your building’s profile will be instantly available to them without them even looking for it.  We are fast approaching a reality where most people’s devices (smart phones, tablets, vehicle navigation systems, etc.) are instantly connected to the entirety of your online profile via any relevant data point.  Silicon Valley’s finest are working hard to seamlessly connect these billions of data points so that all relevant information is instantly provided to any person with an internet connection.

A clear way for you to understand this new reality is with this simple example:  Imagine you own a 12 unit apartment building in West Hollywood.  One of your tenants has a negative experience with you, so he creates a profile for your building on Yelp and writes a one-star review of the building.  In this review, he mentions you by name and calls you a liar, labels you a terrible landlord, and claims you refused to give back his security deposit even though he caused absolutely no damage to the unit.  Keep in mind, he may exaggerate and lie, and you have no recourse through Yelp.  This tenant can state anything he wants, and you cannot remove his commentary.  His one-star review and negative commentary are instantly live on Yelp for all to see.  The next time you have a vacancy, your phone number appears on your FOR RENT sign and it also appears in your online ads for your vacancy.  Every time a tenant calls your phone number from his/her Smartphone, your building’s negative Yelp profile immediately pops up on their phone as they finish dialing your number.  This happens because your phone number appears in your Yelp profile.  Your phone number is an obvious, easily connected data point that will immediately connect you to that negative Yelp profile that has your name and phone number listed.  From now on, whenever someone calls you from a Smartphone, they will immediately see your negative online profile where you are labeled as a terrible landlord.  Eventually, other tenants will write reviews of your property and will make very specific references to you, your on-site manager, your property management company, etc.  It is absolutely imperative that you understand how much damage several negative reviews will do to your ability to rent your units in the future.  A negative online presence will scare off future tenants before you have the opportunity to meet them in person.  They will never even make it to the property.  Tenants will skip over your vacancy, and seek out a property with a positive rating on Yelp and other sites.  On the other hand, if your online reviews are overwhelmingly positive, this will benefit you tremendously.  Imagine you and your next door neighbor both have comparably priced two bedroom, two bath units that are of similar size and quality, but your property has 10 positive online reviews and his property has 10 negative online reviews.  Who do you think will rent their vacancy first?

Your best course of action is very simple: conduct yourself and your business as though the world is watching, because it is.  The market place has changed.  Landlords can no longer be passive and operate in anonymity, and neither can their support staff.  If you are difficult and dishonest in your dealings, it will be publicized.  If your managers are disrespectful, inattentive, and unfriendly, that behavior will be noted publicly, and people will have immediate access to that information.  On the positive side, if you and your tenants have a positive relationship, any type of encouragement for them to post a positive comment on Yelp can pay rich dividends in the long run.

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This is an opportunity just as much as it is a challenge.  Some landlords will thrive in this new environment and others will struggle mightily.  Accountability for your actions as a landlord will soon take on a whole new meaning for you.  This is the case for all business owners in this new digital era.  Restaurants now live and die based on their online reputations.  If you don’t believe me, I encourage you to ask your local restaurant owners how important their Yelp profiles are to them.  They will curse the authors of those one-star reviews and tell you how grateful they are for their positive online reviews.  You cannot control the evolution of the Information Age, nor can you opt out of it by looking the other way.  I encourage you to learn about and be pro-active in this new environment, and to find ways to thrive.  Many of your neighbors will stubbornly refuse to evolve, and their practices will not change.  Their unwillingness to change can benefit you tremendously.  Opportunity is knocking, and I suggest you and your support staff answer the door with a smile and a friendly greeting.

Alex Moran is the Founder of PACIFIC LISTINGS.  His company provides leasing services to hundreds of multi-family owners throughout Southern California. For more information, please call (310) 220 0065 or e-mail [email protected]



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