In the competitive multifamily housing industry, property managers are constantly seeking innovative strategies to boost Net Operating Income (NOI), increase resident retention, and attract new residents. Traditionally, rental income constitutes the bulk of revenue for multifamily properties. However, relying solely on rent limits potential growth!
As the Director of Growth Marketing at Elevated Living and former Corporate Marketing Manager for over 125 properties for two very large multi-family property management companies, I increasingly see developers and property management companies trying to offer the best amenity packages to their residents.
Property managers are turning to resident services to supplement their income and differentiate their offerings in competitive markets. By offering valuable amenities and desirable services, property managers not only enhance tenant satisfaction but also create new income opportunities that can significantly impact the bottom line. Increasing NOI demonstrates effective management and enhances property profitability, making it a top priority for property managers.
But the question remains, what is the best resident service offering when it comes to improving the resident experience while also driving additional ancillary income? Many properties implement a flat lifestyle monthly fee to offer these types of services, but we see here the potential for increased NOI by offering on-demand services.
We looked at the numbers from one of our clients who has implemented this strategy successfully. Residents spend on average $16,800 per month for on-site personal services at a 380-unit high-rise building in a major metro area in the United States.
Let’s see how these numbers are broken down by type of service:
#1: Home Services & Home Concierge
Home services and concierge include offerings such as housekeeping, handyman services (TV mounting, furniture assembly, etc.), and moving services. These services provide a positive experience for new residents upon move-in and a VIP lifestyle that encourages lease renewals. On average, these services generate $3,360 per month, accounting for about 20 percent of total resident services income.
#2: Fitness Center & Wellness Concierge Services
Fitness center and wellness concierge services encompass group fitness classes, personal trainers, massage therapy, nutrition counseling, virtual coaching, and even golf lessons. These services not only improve health and well-being but also create a sense of community and belonging among residents. These offerings generate approximately $2,688 per month, representing about 16 percent of total resident services income.
#3: Pet Spa & Pet Concierge Services
Pet spa and concierge services include grooming, dog walking, pet visits, and pet sitting. These services also extend to watering plants and taking care of other pets like cats, birds, lizards, guinea pigs, and fish, giving residents peace of mind when they work long hours or travel. These services generate about $2,520 per month or 15 percent of total resident services income.
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#4: Food & Grocery Delivery Services
Food and grocery delivery services can be as simple as a connection to local restaurants and retailers or could even be the creation of an on-site mini market. The Elevated Living app allows residents to order food or groceries directly, similar to DoorDash and UberEats. These services contribute approximately $2,352 per month or 14 percent of total resident services income.
#5: Automotive Services
Automotive services like mobile car detailing, car wash, and mobile mechanic services are particularly appreciated by residents who do not want to spend their free time maintaining their vehicles and are often popular with the front desk concierge team. Automotive services generate around $1,848 per month or 11 percent of total resident services income.
#6: Junk Removal Services
Junk removal services offer declutter assistance and large item removal, such as couches and pianos. These services benefit both residents and maintenance teams by keeping dumpster areas and trash rooms clear. Junk removal services generate about $1,344 per month, accounting for 8 percent of total resident services income.
#7: Private Chef Services
Private chefs have become a popular service. These gormands can either help with regular meal prep or help host dinner parties. They can also give cooking classes or can provide professional bartending services for a get together. Private chefs can also be utilized in amenity spaces for events like birthdays and bridal showers. These services generate approximately $1,176 per month or 7 percent of total resident services income.
#8: Beauty Services
Beauty services include facials, spa treatments, makeup artists, and personal wardrobe shoppers. These convenient and useful services are accessible through the building’s branded app, making it easy for residents to pamper themselves. Beauty services generate around $840 per month, accounting for 5 percent of total resident services income.
#9: Personal Assistant Services
Personal assistant services include laundry pick-up and drop-off, dry cleaning, shipping and returning packages, prescription pick-up, and fresh flower delivery. These services create a VIP experience for residents, leading to increased renewals, referrals, and positive reviews. Personal assistant services generate about $672 per month or 4 percent of total resident services income.
The benefit of these services goes beyond ancillary revenue. This property also used these services to offer fun renewal incentive gifts and resident rewards by awarding them credits for their favorite services while demonstrating care and recognition of their personal needs.
In today’s multifamily market, residents are not merely seeking housing, they desire a lifestyle that aligns with their values and preferences. Properties that invest in enhancing resident experiences through diversified services are better positioned to attract and retain residents, ultimately driving higher occupancy rates and rental income.
- Competitive Edge: Properties offering comprehensive resident services differentiate themselves from competitors by attracting a broader tenant demographic and reducing vacancy rates.
- Improved Retention: Satisfied residents are more likely to renew leases and recommend the property to others reducing turnover costs and maintaining consistent rental income. This also increases the retention of on-site staff!
- Enhanced Property Value: Increased NOI resulting from resident services directly contributes to higher property valuations and strengthens investor confidence.
Properties that implement desirable resident services enjoy more than increased NOI, they also benefit from downstream effects of increased resident referrals, increase in online reputation, and improved review scores that in turn help increase conversion rates of prospects into new residents and signed leases.
Property managers who prioritize enhancing resident experiences and increasing NOI through diversified revenue streams are well-positioned to succeed in today’s competitive multi-family landscape. In our previous example, the 380-unit, A-class property brings in $16,800 in revenue per month with resident services. This addition to your bottom line will make your investors and owners happy plus these funds can be put into resident events or community improvements to key amenity spaces.
Source: Propmodo
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