4 Ancillary Income Ideas for Today’s Student Housing Communities
How to improve bottom lines with more strategic amenities and services
College students may or may not have the luxurious amenities available at some schools, but there are a few things they expect regardless of how posh an accommodation is. Internet, for one, is playing a larger role in how students connect with the world and entertain themselves. But there are other services that apartment community owners and managers can experiment with to see what works with their target demographics.
Ricky Brown, vice president of revenue for the Collier Companies, shared some of his observations on successful service add-ons — what’s expected and what may no longer be considered valuable.
1. Internet speed. College students do everything on the Internet, from watching TV to completing course work, so quick upload and download times are very important.
“Their academic schedules and a lot of their classes they’re allowed to do online nowadays, so that is the most crucial thing that you can have for them,” Brown observed.
Streaming video has become so popular that some college and universities are even offering students free HBO GO accounts, Brown shared. The increased interest in streaming video hasn’t killed requests for cable bundles completely, though. Instead, the Collier Companies is finding value in partnerships for upgraded equipment and services, “whether it be an HBO package or a Showtime package or pay-per-view or an HD box or DVR box,” he added.
“So, therefore, we can get revenue sharing as a company at the same time it gives them the ease of access if they wanted to upgrade above the normal bundle that we actually provide for them.”
2. Convenience. Anything that can make students’ lives easier is appreciated. The question becomes what they expect and what they are willing to pay for.
For example, most students expect laundry facilities not only on the property but also in individual apartment homes, so residents can conveniently wash and dry their clothes at any time. In small units, Brown noted that the Collier Companies has installed stackable units to accommodate this interest.
One area in which the company has seen added income is valet services such as dry cleaning and trash pickup.
“They see [taking out the trash] as a nuisance, especially when you’re living in a shared apartment with three other people — and it’s just the ease of access of putting that trash outside your door once a day instead of trying to make it to the compactor across the community or down the trash chute that could be on the other end of the building,” Brown explained.
Paying for convenience also applies to transportation, whether it’s a $20 ride to campus on a community shuttle or increased fees for preferred parking. The Collier Companies has participated in cost-sharing ventures with popular ride-sharing services such as Uber and Lyft, in which the apartment community provides the first ride free (up to $25) through a promotional code.
“I think that that's a huge thing, and I think that's just only going to get stronger and stronger,” he observed, adding that the company is pursuing more of those types of opportunities versus more passé amenities like DVD libraries.
3. Green initiatives. Smart-home technology is spotty for college students, Brown noted. But what has worked both to engage residents and decrease the bottom line for certain properties owned by the Collier Companies is hosting conservation contests.
“[Utilities are] one of the biggest costs that we deal with every single year,” he stated. “We try to hold monthly contests for the apartment that uses the least amount of water or the least amount of electric[ity].”
Prizes for the winners have included free dinners, event tickets, theme park tickets — even an iPad.
“It's a win-win for us and them,” he added.
4. Pets. Students are increasingly interested in bringing their pets to school with them, Brown noted. That affords apartment community owners and managers the opportunity to bring in ancillary income through pet deposits, fees and rent. Dogs are the most popular, he shared, with cats a close second.
“And that's generally the only type of pets that we actually allow,” he noted.
To figure out what will work will work best for your apartment community, consider polling residents or establishing focus groups. The Collier Companies sends out surveys at least twice a year, Brown said, with focus groups convened about once a year.
“The students, especially Generation Z and the Mmillennials, have no problem telling you what they like and what they don't like, and what they would pay more for, and what's a nuisance, what's not,” Brown stated. “So the biggest thing is listening to your residents.”
For more on topics like this and other issues related to the student housing industry, plan to attend the 2016 NAA Student Housing Conference & Exposition, Feb. 16-17, in Chicago.