Five ways to increase ancillary revenue in 6 months or less
As the multifamily industry grows and becomes more competitive, you (our owner and manager partners) must continuously seek innovative ways to increase revenue and differentiate yourself from competitors. Rest assured there are multiple effective strategies you can implement within six months (or less!) that will help you achieve your goals.
Below, you’ll discover five game-changing strategies to unlock new revenue streams, elevate retention rates, and provide an exceptional resident experience.
1. Offer short-term rentals
Short-term rentals are an excellent way to increase your revenue opportunities quickly. By renting out vacant units, or by converting existing units into short-term rentals, your company can generate additional revenue and increase occupancy rates. This is particularly beneficial for those communities located in areas with a high demand for short-term rentals, like urban city centers, tourist locations, and places with great views.
Consider transforming a vacant unit into a guest suite and offering it as an amenity to your residents. This provides a convenient option for residents who have visitors from out of town but do not have extra space to accommodate them. Alternatively, when the suite is not occupied by residents, it can be listed on popular short-term rental sites like Airbnb or Vrbo, increasing the potential for revenue generation. Additionally, the guest suite can be used as a model home when vacant. To incentivize lease renewals, consider offering complimentary stays in the guest suite to your valued residents.
2. Offer upgrades and renewals
Encourage residents to upgrade or renew their leases by offering incentives such as waived fees or rent discounts. This can be an effective way to generate additional revenue while also improving retention rates.
If a resident decides to upgrade their unit, they will typically pay a higher rent amount, which will increase your overall rental income (even if you offer a discounted or waived fee). Similarly, if a resident renews their lease, you will continue to receive rent payments, rather than facing a vacancy and having to search for a new tenant.
When it comes to incentives, residents may appreciate a complimentary home or carpet cleaning service, or an offer to paint an accent wall. Tactics like this can improve resident satisfaction, which can lead to positive word-of-mouth marketing and potentially more referrals, ultimately leading to more revenue.
3. Offer additional services and amenities
Offering additional services and amenities is another effective way to increase your revenue streams. By providing on-site laundry facilities, fitness centers, or pet-friendly amenities, you can increase the value of your communities and generate additional revenue in the following ways:
Increased rent: Offering desirable amenities can increase the perceived value of your community, allowing you to charge higher rent.
Increased retention: The right amenities can keep residents happy and increase their likelihood to renew, reducing the cost and effort associated with finding new residents and filling vacant units.
Additional fees: Some amenities can be offered as premium services that come with an additional fee, such as pet-sitting services or reserved parking spots.
Partnerships: Partnering with external vendors like Spruce to offer amenities like dry cleaning, or Rover for dog walking services can generate referral bonuses and establish mutually beneficial relationships.
Additionally, multifamily partnerships with companies like ChargePoint and EVBox that provide electric vehicle (EV) charging stations are on the rise. EV drivers are often willing to pay a fee for the convenience of charging at home rather than having to travel elsewhere to charge. Offering EV charging stations may also qualify your community for rebates or incentives from utility companies or government agencies, which can further increase revenue.
4. Implement energy-saving measures
Energy-saving measures, such as installing solar panels, energy-efficient lighting and appliances, or implementing a smart thermostat system can create additional revenue for your communities in the following ways:
Cost savings: According to a study by the US Department of Energy, energy-efficient upgrades in multifamily buildings can reduce energy use by up to 30%, resulting in cost savings of up to $0.22 per square foot per year on energy bills. The study found that the average annual cost savings for a community was approximately $5600.
Increased resident satisfaction: Residents appreciate the savings on their utility bills that result from energy-saving measures, which can increase satisfaction and result in higher retention.
Additional revenue streams: Installing solar panels can reduce your community’s electricity costs by generating your own electricity, and you can sell any unused power back to the utility company, generating additional revenue.
Higher property value: According to the National Multifamily Housing Council (NMHC) 2021 Resident Preferences Report, energy-efficient features were ranked as the 2nd most important amenity among renters. This suggests that communities with energy-efficient features are more attractive to potential residents, and may have a competitive advantage in the market.
5. Utilize technology to promote preferred providers
Did you know that people who are moving are 4X more likely to try a new provider? One of the most effective ways to increase ancillary revenue is by promoting your preferred providers of services such as TV, internet, and utilities to new residents. When residents purchase from your provider or a provider you have an established agreement with, you can earn commission.
But why stop there? You can supercharge this tactic by partnering with Updater. Updater is your branded, all-in-one solution that guides your residents through your community’s customized move-in tasks like paying move-in costs, registering pets and vehicles, uploading proof of insurance, and securing TV and internet service. With Updater, your preferred providers and services are showcased to new residents at the ideal time (right at move-in), increasing the likelihood of them choosing your community’s preferred providers. In fact, a recent study with Bozzuto revealed that 98% of residents shopping in the Updater marketplace selected the community’s preferred providers.
With these five powerful strategies, your operations and marketing teams can achieve major improvements in resident satisfaction, operational efficiency, and revenue generation, all within a relatively short time frame – we’re talking six months or less! So, why wait? Take action today and implement these strategies to stay ahead of the competition. Get your communities set up for long-term success and see the positive impact for yourself.
About Updater
Updater is the leading technology platform powering the relocation industry. Updater powers 25% of all US moves and is a preferred partner of over half of the NMHC Top 50. Our company works with all industry stakeholders to make moving – one of life’s most painful events – frictionless, painful, and even delightful.
Visit updater.com/move-ins to learn more or talk with one of our industry experts.
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