CREATE NEW REVENUE
- Utility reimbursement– Also known as RUBS (Ratio Utility Billing System), the pass-through of water & sewer charges to tenants is the most common new revenue stream for most apartment properties. This is called a ‘net lease’ in other commercial properties, and is now becoming the norm in multifamily. Plus, it incentivizes residents to conserve resources and participate in cost-saving measures.
- Pet rent– Pets are tenants, just like their owners. They create ongoing wear & tear on a property, and charging an ongoing pet rent is a much more logical method of covering that cost than simply charging a one-time deposit. People love their pets, and with so many properties not allowing any pets at all, most renters are willing to pay the additional rent.
- Storage rent –How many of your tenants are paying for storage off-site? You might be surprised. If space allows, consider adding storage units on-site. Once in place, they require very little management.
- Parking rent –Apartment development continues to trend toward higher density, and one side effect is an overall decrease in the average number of parking spaces per unit.
- Bike rack rental –If you own property in a bike-friendly city, it’s quite possible you have tenants who commute by bike. In that case, secure, covered bike storage could be quite valuable to those not wanting to get muddy tire tracks on their (your) walls. Add in a bike-wash and maintenance area, and you may have tenants for life.
- Furnished rentals –The market for furnished apartments may not be huge, but it will never go away. Consider charging a premium for furnished units.
- Appliance rental (vacuums, carpet cleaners, etc.) –You might be surprised how many residents take advantage of this amenity. The benefit for you, of course, is that your tenants are paying to help maintain your property.
- Clubhouse rental –Many properties with clubhouses offer them to residents for no charge. But quite often, tenants are willing to pay for their use.
- Cell tower/antennae lease –If you’re lucky enough to have a property in the right location, a cell tower lease can produce great passive income. See celltowerinfo.com for more info.
- Billboard/sign lease –Great for urban properties or high-traffic areas, these are another low-maintenance source of passive income, and they are often managed by third-parties.
- Tanning bed rental –Would your residents drive to the nearest tanning salon if one were already on-site? Probably not, and the revenue per square foot might surprise you.
- Install vending machines –Today’s vending machine technology is pretty impressive. With new features such as bank cards and automatic reordering, it’s only getting better. Save your residents a trip to the store, and they will pay a premium for convenience items.
- Concierge services –Another hot new trend, primarily in luxury apartments, is a dedicated concierge to cater to residents needs outside of basic living accommodations.
Stay tuned for More On the Economics of Rental Retention and How Keeping Residents Happy Drives Profit. In Future Newsletters, we’ll break down more on the economics behind tenant retention and look at how applying strategies to reduce turnover will have a positive impact on your profits, operating budget, and long-term success as a rental property manager.
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