As a landlord, your goal is to maximize your net operating income (NOI) to achieve the best return on investment. While rent collection is a significant source of revenue, there are other ways to increase your NOI and differentiate yourself from other landlords. Offering on-site services such as housekeeping, personal trainers, dog groomers, TV mounting, and other ancillary services can be a great way to boost your income and provide added value to your tenants. In this article, we will present a case study and discuss how landlords can leverage these services to increase their NOI.
What are on-site services?
On-site services are additional services offered by landlords to tenants in the same building or complex. These services can include housekeeping, laundry, fitness centers, personal trainers, dog grooming, pet care, car wash, TV mounting, and more. These services are designed to provide convenience and added value to tenants.
How can landlords leverage on-site services to increase their NOI?
Increased Rent:
Landlords can increase the rent of the units that include on-site services. For example, if a tenant is interested in renting a unit that includes a personal trainer, housekeeper, or dog groomer, they may be willing to pay a higher rent. By offering these services, landlords can increase their rental income.
Retention of tenants:
On-site services can improve tenant retention. Tenants who are satisfied with their living arrangements are more likely to renew their leases. By providing additional services, landlords can make their properties more desirable and increase the likelihood that tenants will remain in their units.
Additional revenue:
On-site services can provide an additional source of revenue for landlords. For example, landlords can charge a fee for housekeeping, pet care, or car wash services. By charging a fee, landlords can increase their NOI and generate additional income.
Differentiation:
On-site services can help landlords differentiate their properties from other rental properties. By offering unique services, landlords can attract tenants who are willing to pay more for added convenience and value. This differentiation can also lead to a competitive advantage in the market.
Cost savings:
On-site services can also result in cost savings for landlords. For example, if a landlord hires a full-time housekeeper for a building, they can negotiate a lower rate than if each tenant hired a housekeeper separately. By providing economies of scale, landlords can reduce costs and increase their NOI.
Case Study: 349 unit community in TX produced an additional $223k/year!
A client who implemented Elevated Living at their property was able to reduce the number of apps the residents use, improve the resident experience by offering hotel style concierge services, and increase their NOI. This building has 349 units, and on average, each unit generates approximately $30-50 per month in additional revenue. By offering services such as housekeeping, car wash, dog grooming, personal trainers, and other ancillary services we were able to generate an additional monthly revenue ranging from $5,000 to $15,000 per month. For example, if 20% of tenants use the car wash service with a cost of $20 per wash, and the landlord charges a 20% commission fee, the monthly additional revenue generated would be approximately $1,400. Similarly, if 30% of tenants use the housekeeping service at a cost of $100 per service, the monthly additional revenue generated would be around $10,500. Overall, these on-site services can provide a significant boost to a landlord's revenue stream and help to differentiate their property from competitors, potentially leading to higher tenant retention rates and increased property value.
In conclusion, implementing resident engagement apps such as Elevated Living that offer on-site services can be a great way for landlords to increase their NOI beyond just rent collection. These services can provide added value to tenants, improve tenant retention, differentiate properties, generate additional revenue, and provide cost savings. By leveraging on-site services, landlords can maximize their ROI and provide an excellent living experience for their tenants.
