There's no place like home.
It's kind of weird being a renter who also works in the apartment industry. I often feel like Dorothy asking the Wizard to grant me my wishes--if Dorothy also worked behind the curtain as a personal assistant.
By day, I write about ancillary revenue opportunities. By night, I ask for cheaper rent. It's all a bit confusing.
But so, too, is the concept of resident-friendly ancillary revenue. And according to Steve Lefkovits, Joshua Tree Conference Group Principal, learning to leverage ancillary revenue without incurring resident ire is key to any successful revenue management program.
"Incredible rent increases won't last forever," Lefkovits says. "For asset managers, the inflexion point when market rents plateau often is accompanied by a pivot into ancillary revenue opportunities. In fact, smart multifamily operators are already reexamining 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), Convened by NAA in partnership with Joshua Tree Conference Group, October 1315 at the Omni Amelia Island Plantation Resort, the Incremental and Ancillary Revenue Strategies presentation, led by Bell Partners Vice President Mark Vernon, will explore the promise of these opportunities.
Lefkovits, conference Co-Executive Producer, says 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. As a resident, I can vouch for this. I'm already paying a large sum of money on monthly rent; my parking space should be included in this. One day I will work up the courage to express such thoughts to my management company.
If I only had a backbone.
Fortunately, 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."
Because at the end of the day, there should be no place like home. For more, check out "Resident-Friendly Ancillary Revenue" on pg. 66.
Editor's note: NAA staff writer Lauren Boston writes a humorous blog on APTly Spoken every Thursday at www.naahq.org/blog.