Should you lease your appliances?

Some management firms are adding ancillary income and improving customer service to residents by leasing their appliances--particularly in-unit laundry systems. This strategy can allow companies to net thousands of dollars in income with little or no out-of-pocket expenditures.

In the apartment industry, "leasing" is synonymous with renting apartments. With appliances, "leasing" refers to renting washers and dryers--and in some cases, refrigerators--to place inside apartment homes. According to statistics provided by national apartment industry rental magazines, in-unit washers and dryers rank sixth in a list of amenities most wanted by current and future residents. Providing this amenity through an appliance leasing company not only can be hassle-free for management companies and owners, but it also can generate an overlooked revenue source for the community.

"We like leasing the appliances because that allows us to avoid a major capital expense, eliminate the maintenance cost of the washers and dryers and generate extra revenue for our properties," said Ivan Jecklin, General Counsel and Executive Vice President of Central Virginia-based Weinstein Properties. "Choosing the appliance provider carefully is critical to the success of this program because a provider with poor customer service will turn a nice revenue stream into a liability by alienating our customers."

Many owners and management companies have suffered financially by trying to provide in-unit laundry directly to the resident. Often, the cost of upkeep and maintenance and the loss of equipment turns this potential money-maker into a nightmare of old parts, warehouses full of broken appliances and huge worker's compensation claims from lifting and moving equipment.

When an appliance leasing company provides appliances to a community, the leasing company's staff handles the delivery, setup, maintenance and tracking of each appliance. If a property chooses to lease directly from the appliance leasing company, it can request one bill every month, which details each unit at the community. The leasing system also allows apartment companies to set prices for the rental appliances and pass those costs to residents, allowing the apartment company to accurately budget this steady ancillary income stream.

Many apartment professionals find that although providing washers and dryers to residents is a great idea, the maintenance staff cannot keep up with the hundreds of maintenance requests that residents make. However, service on leased appliances is completely outsourced. As apartment professionals become smarter, faster and more efficient, they re-examine old thinking and find new strategies to provide better resident service and generate more revenues without sacrificing service. Both of the largest appliance leasing companies in the United States provide for referral fees to be paid directly to the property or owner every time a resident leases a washer and dryer set. This has become the one true "free lunch" program available for properties of all sizes with in-unit washer and dryer connections.

Larry Bellack, CAS, is Vice President of Sales for AZUMA Leasing. He can be contacted at 866/477-6416 or [e-mail]. Nan Cavarretta, CAPS, Director of National Sales for Appliance Warehouse of America, can be reached at 704/297-9259 or [e-mail].