So you’ve trimmed your operating costs to the bare bones. You’ve raised rents as high as you dare. You’ve done everything you can think of to lease those vacant units. Now, what do you do if your bottom line still needs a boost?
Maybe it’s time to pay more attention to non-rent income. You might be surprised at the amount of extra revenue you can generate — and at some of the clever ways you can go about it. To get you started, we’ve put together a list of ideas — from A to Z. (Read A through M.)
N: Nonrefundable deposits and fees. Nonrefundable pet deposits have been used for a long time — and now properties are discovering that the concept can be used in other ways as well. For example, Brookwood Apartments charges a $100 nonrefundable amenities fee. Brookwood’s property manager, Nahla Somogyi, says that selling the fee to residents was challenging at first, but her staff eventually found the right approach. The fee currently generates around $1,000 income per month — making it well worth the extra trouble.
O: Office services. Charge residents a small fee for using your fax and your copier. You might also keep a stash of office supplies including large mailing envelopes, copier paper, stamps and more to sell. Although this won’t generate tons of revenue, it is an excellent extra.
P: Pets. By now, everyone should be aware of the income-generating potential of critters, but just to recap: Nonrefundable pet deposits and monthly pet fees can add up to serious extra income. In addition, some communities now offer pet care services, such as feeding and walking, which are billed on a per-day basis.
Plant care. Some of the same communities offering pet care are also offering plant care. For around $5 a day, residents can have their houseplants and flowers tended to while they are away.
Poolside service. Earn extra points and cash by making your residents feel like they’re at a resort. Have a poolside stand that provides beverages, snacks, tanning lotion, towels, floaties and so on — for a fee.
Q: Quick-stop market. Joanie Milar, of Flournoy Properties, says some of her properties maintain their own mini-convenience stores, selling sundries and snacks during regular business hours.
R: Relocation services. The average new resident has to conduct a large number of business transitions during the move-in process — to set up phone, cable, utilities, renters insurance, etc. You can make life easier for them and generate extra income by offering to handle the various relocation transactions for a fee. While you’re at it, you might offer other move-in assistance — such as providing packing supplies or arranging for moving trucks or vans.
Referrals. Squeeze some extra income out of residents you lose to homeownership. Establish a program with local builders and Realtors, under which your community gets a referral fee for any business you send to them.
S: Storage. One of the well-known drawbacks to apartment living is the lack of storage space — which is why many residents are quite willing to pay for any extra storage you can offer them. Look for areas of your property that are currently unused, and convert them into storage. The monthly rate you can charge will depend largely on the size of the storage space you are offering: Rates between $1 and $2.50 per square foot are not uncommon.
Satellite TV. You can structure this as either a monthly fee, included in the rent or as an upfront fee built into the move-in costs.
T: Trash pickup. A number of companies are currently charging for door-to-door trash pickup. Fee structures vary, with some companies charging by the bag ($5) and other charging a flat monthly fee ($10 to $15).
Tanning. Add a tanning bed to your fitness center, and charge between $2 and $5 for a half-hour session.
U: Upgrades. Offer minor apartment upgrades — such as a repaint, a carpet cleaning, a ceiling fan or lighting upgrade, etc. — for a fixed fee. This kills two birds with one stone and allows you to maintain and add value to the property while generating income at the same time.
V: Vendors. There are a number of vendors you can partner with — such as coin-operated laundry machines, soft drink and snack machines, prepaid phone card machines and more. Depending on the vendor, you might either lease space for the machines for a flat fee or receive a portion of the income generated by the machine. Either way, don’t miss these opportunities to both serve your residents and enhance your revenue. Gerry Hunt, of Paragon Properties, says that leasing space in each building to a laundry vendor generates more than $255,000 in ancillary income per year.
W: Water. Submetering might still be a dirty word with residents, but its benefit to property owners is undeniable. Jennifer Stull, of RAM Realty Service, says that her properties can recover around 85 percent of their water costs through submetering.
X: X-tra services. When you put yourself in a service mindset, there’s almost no limit to the number of extras you can offer your residents. Think five-star hotel concierge — and then start creating a menu of fee-based services. They might include making restaurant reservations, ordering tickets to events, picking up or dropping off dry cleaning and groceries, arranging for transportation to and from the airport and so forth.
Y: Yard sale. We’re all familiar with “leftovers” — those odds and ends residents leave behind when they move out. Sure, sometimes it’s just junk. But one man’s trash is another man’s treasure. Store anything that might be worth selling, and have a big community yard sale once each year. You can make your sale pay off even more by allowing residents to purchase “booth” space and sell their own items.
Z: Zero in on your residents’ needs. This list is by no means comprehensive. When it comes to finding new ways to generate ancillary income, you are limited only by your imagination. And the best way to unleash your imagination is to look at the world through your residents’ eyes. Try to understand their lifestyles and their needs. Then look for ways to meet those needs — for a small fee.
To read “The ABCs of ancillary rental income: Part 1,” click here.
Tami Siewruk has held leasing, marketing, management, and business development positions up to and including vice president of property management. As president of Siewruk Development, she has completed a 192-unit apartment community in Austin, Texas; and in partnership with Conine Residential Group & The Huizinga Group, developed 305 units in Dallas, Texas. She currently is working on a small resort in the Bahamas.