Just as a “Cat 5” hurricane packs the most wallop, missing out on key ancillary service opportunities could have a devasting impact on your bottom line. ASM’s, Andrew Smith, developed five categories or “5 Cats” of multi-family, ancillary services to help ensure your bottom line doesn’t take a hit.
Are you taking advantage of all “5 Cats”? Check them out to see how your community measures up.
1. Partner Marketing – Partner marketing is when you agree to promote a company to your residents in return for revenue or service discounts. Foremost for most communities are telecom and cable company service agreements. Any community over 75 units should investigate this option if they do not have a marketing and access agreement in place.
Other options are furniture rental stores, fitness clubs and training services, pet walking services. Retail stores in your neighborhood also may provide opportunities. This is one of the most productive categories, with some communities generating more than $110/unit per year.
2. Accessorizing – When you physically install a product or set up a service at your community. Prominent examples are ATMs, vending machines, and common area laundry rooms. In return for the use of this space providers pay rent, revenue share or commissions.
3. Space Reallocation – This is when you take an existing under-used space and repurpose it. For example, creating a car wash/vacuum or car charging area, pet washing station. This also includes storage lockers or reserved parking. You can then apply a charge for residents who use those amenities.
4. Non-resident Use – This option is not talked about frequently as it isn’t available at all locations. It is more common in urban or dense areas or in communities adjacent to traffic arteries. A provider pays to use space on your property for an application not intended solely for residents. Some examples are billboards or roof top cellular antennas.
Before they renovated Wrigley Field, property owners got significant revenue for billboards and seating for games. Opportunities in this category don’t directly benefit residents but you garner revenue, which can help keep rent rates more affordable.
5. Expense Reduction – Lots of areas to mine in this category, the broadest category, because virtually anything you purchase can be included here. Some of the most common examples are utility submetering, trash services, reduced cost of paint and supplies. This is where you perform regular reviews of existing contracts to investigate possible volume discounts or better rates or service by changing vendors.
If your community or portfolio is not taking advantage of all “5 Cat’s”, you are missing out. Start with a review what you are doing today and see if you are participating in all categories. And if you need help from a company focused 24/7 on ancillary services, contact us at ASM by clicking below.