The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
There are many different ways you can increase revenue in an apartment building setting, and even more when you think creatively. Charging $20 a month for covered parking, installing your own laundry units, using technology to your advantage, and charging a premium for views or premium residence locations are simple but effective methods. One method that requires little to no investment at all is charging a premium for reserved parking spaces.
Richard Wilson: What are the 3 most uncommon ways that you have found you can drive net operating income in apartment buildings?
Brian Burke: One of those we’re using right now is we’re using artificial intelligence to analyze our lease rates, move out notices, vacancy, projected move-ins, to price units almost the same way that airlines price seats. So, as demand goes up, we can increase pricing. As demand wanes, we can decrease pricing. This happens in real-time, every single day. That’s an incredible way to drive revenue at the property. Other ways are charging rent premiums for view units, upstairs or downstairs depending on which are more popular in that area having premiums there. One thing that we did recently is we had a laundry contract with a third party service that was expiring, so we didn’t renew it. Instead we bought our own laundry equipment and now they’re all operated off of card readers, so you don’t have to worry about somebody stealing the coins. That was a dramatic increase in laundry revenue, which far exceeded the cost that it cost us to do that.
There’s other revenue generating things you can do like installing covered parking, especially in warmer climates or maybe even where it snows, I don’t know, having that covered parking your can charge $25 to $30 a month for a covered parking space. One that’s interesting that we’ve done that costs nothing is giving someone a reserved parking spot. So it might be right near their front door, it doesn’t even have to be covered, but you can stick a sign there that says reserved, and charge $10 or $15 a month for the tenant to have that convenience. Those are probably the biggest ones. Solar is another one, putting in solar on a covered parking and then using that to power the parking lot lights is another interesting way to increase revenue. A lot of different little ways.
Richard: Yeah, great.