Home > multifamily, Property Management, Uncategorized > Selling Ancillary Fees as a Value-Add Proposition

Selling Ancillary Fees as a Value-Add Proposition


Ancillary income can significantly increase your bottom line, but additional fees are not always an easy sell to potential tenants.

One of the most fruitful programs enlisted at Dallas-based Riverstone Residential properties is its Bulk Telecom program, where it bundles television, Internet, and phone services. The bundle is presented as a separate line item fee to the resident and included in their monthly obligation to the property – but it’s benefit makes it an easy sell. The package is priced at about a 30 to 40 percent discount to the market’s primary telecommunication providers.

“It’s very lucrative to both properties and to residents,” Rees says. “A resident is going to pay $140 for high speed internet and television services directly with a provider, however in a bundled program at a property, we can sell it to the resident for $75. Who would rather pay $140 than $75 for the exact same product?”

He also suggests that operators follow through with less-direct methods to make money, like renter’s insurance.

“Don’t dismiss renters insurance,” Rees says. “There might not be a lot of ancillary income in renters insurance for the property, but the amount of money that a property can save by not having to pay for losses caused by residents, where those losses will be covered by a renter’s insurance policy in place is paying is a huge factor.”

A tenant is more willing to come out of pocket to pay $10 a month knowing that everyone around them has a policy, and that their personal belongings are insured.

Similarly, Seattle-based Pinnacle takes a thoughtful approach to communicating mandatory fees with tenants.

“Ultimately, the last thing we want is to have residents upset about a great new service that was intended to create higher satisfaction,” says Woody Stone, Pinnacle’s senior vice president of operations. “If we fail to understand and provide the services that have a clear value proposition to the resident, they will undoubtedly feel ‘nickel and dimed,’ which means they won’t stick around.”

Reprint from Multifamilyexecutive.com       ByLinsey Isaacs

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: