A prospect sees the "base rent" listed and assumes that's the rent
Prospects Aren’t Dumb-Let’s Talk Fees
“So… what’s the real rent????”
This question is being asked at apartment communities all across the nation, right now.
Why? Because a prospect sees the “base rent” listed and assumes that’s the rent. Then, the prospect goes deeper into the process and realizes that it’s the base rent PLUS pest control, landscaping, locker, technology and other assorted fees.
And this creates pain.
I know there are legitimate reasons operators itemize fees. It helps communities show up in more searches. It gives operators flexibility as costs rise. It protects NOI, and in some markets it helps navigate government regulation.
All of that may be true, but it doesn’t change how the experience feels from the prospect’s side of the desk. To a renter, base rent PLUS feels like they’re being “nickel and dimed” by a large company, and also seems unnecessarily complicated. The deeper issue is not fees themselves. It is how those fees are perceived.
People understand paying extra when the value is clear and optional. On a cruise, no one is surprised by having to pay for the alcohol package or a paid excursion. You know what you are paying for, and you decide whether it is worth it. Now, if you were charged an “amenity fee” to use the public pool on a cruise ship, you’d probably be ticked off, right?
What frustrates prospects in multifamily is being charged for things that feel like they should be “included.” When a fee feels like, “This used to be included, and now it’s not,” that doesn’t feel like added “value.” It feels like being ripped off.
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Some of you just got irritated at me, thinking that you are being transparent.
Perhaps you’ve argued that rolling fees into rent would make pricing look higher. Or doesn’t reflect the reality of what you offer. All of that may be technically correct, but that young couple looking for their first apartment are not evaluating the fairness of your pricing strategy, they’re trying to figure out, “What’s the real rent every month? And, does this feel fair to me? Does this feel good? Do I feel ripped off?”
When there is a disconnect between the rent they saw on the website, and the real monthly payment, that is when their warning lights go off. That’s where they lose trust in the industry, not because the math doesn’t add up, but because it feels “wrong.”
Whatever the genesis for itemizing fees, I don’t think there is a doubt that it creates pain, friction, increased government scrutiny and erodes trust. Onsite teams feel this every day when they have to answer questions and defend pricing policy decisions they didn’t make…and still try to get the prospect to say, “YES.”
Here’s my take…if a cost is mandatory, it should be included in the rent.
If something is optional, it should be positioned clearly as an upgrade with obvious value.
Prospects are smart. They understand paying more when they can see what they are getting in return. (I would include things like pet rent, pet fees, fees to rent a clubhouse etc. in this regard.)
All-in pricing may prevent a few prospects from clicking but I actually think it’ll help in the long run. I think people will gravitate towards knowing the rent is the rent, and I think they’d respond to a message that told them, “We don’t nickel and dime you here-we just provide great service.”
I think being viewed as clear, safe and trustworthy isn’t a liability, it’s an advantage.
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