One of the best ways to offer more amenities to guests and residents while also growing business is by establishing fees for extra services. People are willing to pay for additional features and understand that the fees go towards administrative costs.
Charging additional fees is a viable path for growing your business. It provides additional income to put back into the property, allowing it to stay up-to-date and in tip-top shape. These new upgrades make it appealing for visitors from younger demographics to revisit your facility and, better yet, bring their friends.
These are also known as ancillary-revenue programs—or any revenue outside of the main ticket price or rent. Those revenues could be significant. It’s why airlines charge you for baggage fees and food. United earns the most from this type of revenue, with $6.2 billion in 2015 non-ticket revenue.
Whether you run a multifamily community (like an apartment or condo), rent office space to small businesses, operate city parks, or something entirely different, property and facility managers can implement a solid plan for growing their business through extra fees. Here are a few ideas to get started.
Add a bike room
Bike rooms are becoming very popular as a place for long-term bicycle storage. They are more secure and protective, which is a priority for those who own and commute by bicycle. Property managers frequently charge tenants or employees additional fees to access the bike rooms. This means that installing a bike room can pay for itself in a few short years and then begin generating additional revenue for the property.
Fees range from $10 to $100 or more per month. Typically, higher fees come with more amenities, such as showers and bike repair stations. Individual storage bike lockers within the bike rooms can be an additional fee for tenants looking for ultimate security. Property managers who decide to add showers may qualify for LEED points, making their facility green certified if they reach a certain number of points.
Vending machines filled with simple repair supplies like bicycle tubes can also earn property managers a small side profit. No matter what you decide to install, cyclists will appreciate feeling supported in their goal of healthy commuting. Even traditional bicycle parking racks are marketable since it shows support for those who own a bicycle.
Add vending machines
Vending machines are ideal for making a little extra income at your park, office, or multifamily community. They are used by guests of all ages and backgrounds: from children and adults to residents and travelers, people are always drawn to vending machines to find a quick snack. Newer vending machines accept credit cards, which can increase your customer base outside of those who carry cash or coins.
Charge pet rent and a deposit
Whether looking for an apartment to call their own or traveling and searching for pet-friendly amenities, there’s no question that there is a market for pet owners. The trend of pet ownership in America is on the rise, growing from 66.5 million households to 79.7 million households, according to the Humane Society. It is estimated that 65% of households own a pet, which means that more than half of your customers are likely to bring a pet along. If you run a hotel, park, or shopping facility, consider adding pet waste receptacles and charging pet fees to accommodate guests.
For those who run multifamily communities, charge a pet deposit and small monthly pet rent. These fees have become standard protocol and pet owners know to expect them. Before you don’t allow pets, remember that you will be limiting the number of people who can live in your community. As Bigger Pockets cleverly put it, “If you do not allow pets, remember this: Quality renters can go anywhere, but most would rather sleep in the gutter with their pet than the Taj Mahal without it. Many renters would have a difficult decision to make if they could only bring their pets or their kids.”
Rent out cleaning supplies
Charging fees to rent out cleaning supplies like vacuums and carpet cleaners has multiple benefits: it can bring in some extra revenue, but it also helps tenants maintain your apartments, reducing the need to replace carpets and flooring. Charge fees for this bigger cleaning equipment to help pay for the supplies.
Offer a coin-operated laundry room with a change machine if there is no in-room washers and dryers. You can also charge for door-to-door trash service, allowing residents to simply place trash outside their door instead of hauling it to the dumpster.
Install pet equipment
If you want to keep up with your competitors and attract pet owners, consider adding simple dog park equipment. It’s a small addition that will definitely make pet owners smile as they experience fun memories at your facility. This equipment is great for all types of hotels, parks, and apartments. Small apartments can make rambunctious dogs feel crowded. The local dog park is a good option for exercise, but it may seem like a far drive after a long day of work. Apartments that offer their own miniature dog park can use this as a selling feature for pet owners, or increase their monthly pet rent to cover its cost.
Public and private parks can install dog park equipment and charge an annual or monthly membership fee for access. Keep your facility up-to-date with new dog park structures and signage stressing the importance of cleaning up pet waste.
Charge other fees at apartments
There are plenty of other fees for multifamily community managers to implement. A few ideas include:
- Clubhouse rentals
- Satellite TV or telecom programs
- Partial month leases (for when the apartment would normally be unoccupied)
- Extra keys fee
- Lease termination fee
- Holding fees for reserving an apartment
- Application fee to cover background checks
- Extra occupant fee
- Late payment fee
- Advertising space in elevators or hallways
- Covered parking fees
“With just a minimal investment in amenities, a facility manager can create an entirely new revenue stream,” said Adam Koonin, a senior executive with The Park and Facilities Catalog. “In addition, consumers are always looking for extras and this is another powerful marketing tool to attract new customers and stay ahead of the competition.”
It’s important to note that property managers should not become too greedy. Some higher end, all-inclusive condos might not get away with extra fees, since tenants expect everything to be included in the base cost. Residents know when they are being nickel-and-dimed, so make sure the fees are reasonable.
But as you can see, people are passionate about many things such as their bicycles and their pets. Provide amenities such as bike rooms, dog park equipment or other features that accommodate these passions and people will be glad to pay the few extra dollars.