Incredible rent increases won’t last forever. For asset managers, the inflexion point when market rents plateau is often accompanied by a pivot into ancillary revenue opportunities. In fact, smart multifamily operators are already re-examining fee structures, charge-backs, and creative ways to pass a portion of community management costs respectfully through to the renter.
At Maximize: 2014 Multifamily Asset Management Conference (Maximize), October 13-15 at the Omni Amelia Island Plantation Resort, we’ll examine the promise of these opportunities in our Incremental and Ancillary Revenue Strategies presentation led by Bell Partners Vice President Mark Vernon. It’s part of a full spectrum look at cost centers and savings opportunities that also includes panel presentations on utility management, new green building strategies and net-zero energy consumption.
For most apartment asset managers, ancillary revenue programs offer an almost immediate net operating income boost but come with the risk of resident push-back. Maximize will look at how progressive operators deftly manage the balance. “We never want to be seen as feeing our customers to death,” says Harbor Group Management Company Director of Revenue Management and Maximize advisory board member, Kevin Huss “But leveraging up ancillary revenue is becoming more consistent among our peers. Should we raise our application fees or charge pest control back to the resident? The exercise is always an attempt to dissect all of the services that we do and make sure they provide value both to us as owners and to our residents.”
AMLI Residential is also extremely sensitive about engaging in ancillary revenue initiatives that residents might perceive as nickel and diming, particularly when some communities can run the “other revenue” line item of rent rolls as high as 10 or 11 percent. “The last thing you’d ever want to do is alienate your residents, particularly when trying to achieve significant renewal rent growth on turns,” says AMLI Senior Vice President of Asset Management Ken Veltri, who also serves with Huss on the Maximize Advisory Board. “We’re likewise looking to recapture pest control fees, making sure we are appropriately charging for utility billing fees, and we are always looking for new opportunities to maximize income, but in a thoughtful manner that pays attention to pushing past a resident’s breaking point.”
Has your firm discovered any creative new ancillary programs to implement? Drop us a line and let us know, or better yet, register to join the country’s top multifamily asset managers at Maximize. We promise not to charge any extra fees for sharing your ideas. Your registration covers all of the strategies, tactics, tools and best practices that the conference is sure to deliver. We hope to see you there.