Apartment Management Professionals Discuss Inside Ways to Drive Ancillary Income

CHICAGO—The risk of “leaving money on the table” is forcing operators to think twice and use creativity to uncover new channels to boost revenue. Tactics on how to charge resident fees and to build services into the rent were among the ways panelists discussed how to improve the bottom line during a session Tuesday at National Apartment Association’s Apartmentalize Conference in Chicago.

Residents are willing to pay fees, “but only when they see the value,” Rick Ellis, Broker and Owner, ELLIS HomeSource Property Management, AMO, said. “But, if you are not doing all the basics in terms of maintenance and management, it’s going to be hard to charge more. You’ve got to be working in a ‘clean garden.’

Ellis cautioned against rising fees to levels the resident profile cannot afford. “Turnover is evil,” he said. “It costs more to turnover a home than you’ll get back in ancillary income from some fees.”

Know Your Market’s Capabilities

By continually examining the market, operators can uncover opportunities for fee or rent increases.

“If it’s a feature that everyone around you is already doing, you don’t have to call it a fee, just add it to the rent,” Victoria Cowart, a long-time property management professional who now is Director of Education for an apartment pet-screening provider.

Jacklyn Arnest, CAM, Senior Director Marketing, DTN Management, said, “if you know your market, when you present these fees or added cost to residents, it’s a much easier discussion to have.”

Ellis said the single-family home rental industry is ahead of multifamily when it comes to charging for a variety of functions.

He charges for property visits, application fees and move-in, among other things. He said operators should consider charge to reserve the elevator and premiums on maintenance calls that are “same-day,” after 5 p.m. or on the weekend.

Getting Creative in the Neighborhood

Arnest said it’s unwise to tell any owner that you can’t add revenue or that a property has peaked in how well it can perform.

She creatively drives revenue by partnering with local businesses. For example, as a manager of a large student-housing portfolio near Michigan State, she struck a deal where Panera pays DTN Management fees if it markets a deal where students receive free coffee from the fast-casual restaurant during the full school year.

“It’s as easy as us just handing the students fliers during the walk-through,” she said.

Arnest also partnered with her property management software company to create the ability for local businesses to send offers to residents through her community app.

She also recommended leveraging signage because it gets “so many eyeballs” from the residents. “Consider digitized billboards in high-traffic locations,” she said, “and display rotating messages of promos and community information.”

Check back with GlobeSt.com for more coverage from this event.