Revenue Opportunities for Property Managers and Owners
Is it possible to easily add revenue streams to your existing real estate or property management business? Yes! In this post I’m collecting a list of value-add services available to property owners & managers. I spoke to a representative at each company to confirm the details for this article.
I have have not used any of these companies nor do I have any ownership interest in them, although some of these are referral links. If you decide to contact any of them, I’d appreciate you mentioning my name.
Resident Benefit Package
These services can be offered to residents as part of a Resident Benefit Package (RBP) bundle. For example, you might bundle a master renter’s insurance policy with monthly air filter delivery for residents. Your actual cost for that would probably be something like $25 to $30 per unit. But you could charge residents $45, thereby profiting ~$15 per unit per month. You can make these programs mandatory per the lease, and include other benefits not provided by mom-and-pop landlords such as after-hours emergency maintenance, access to the tenant portal with free online payments, etc.
Air/fridge filter delivery with Second Nature (previously FilterEasy). Second Nature will mail your residents HVAC filters (fridge filters too, if you want) on a regular schedule. This not only provides a nice benefit to the resident, but also encourages & reminds them to change it regularly, which prolongs the life of the equipment. Second Nature helped pioneer RBPs and has expanded to offer a suite of up to five products that can be bundled for residents: filters, credit building, identify theft protection, resident rewards, and utility connection concierge. Cost to the property manager approximately is $15 to $25 per month depending on frequency of delivery and services provided.
Renter’s insurance master policy with Arcana (via Insurance Management Group, or IMG). Arcana has a true Master Renters Insurance (HO-4). By enrolling in this program, you can provide legal liability AND contents coverage to every resident that lives at a property you manage. That way you can be sure they (and the owner) are covered. No need to manually collect insurance declaration pages every time a resident moves in or renews their lease. Huge win for residents, managers, and owners alike. Great product to bundle with a TBP. Cost is approximately $11 to $20 per month, depending on coverage amount and other details.
After-hours maintenance coordination with Latchel. The concept here is a two-fold: A personal concierge (HomeAssistant) for residents to assist them with tenant-responsible repair items, plus after-hours emergency maintenance coordination for the property manager/owner. Maintenance coordination is free with HomeAssistant. Tenants can call or text for service. Tenants get $300 in credits for the service. Some examples of the services available with HomeAssistant: Dog walking, TV hanging, lockouts, pest control, lawncare, fixing clogged toilets. The property manager/owner gets $5 any time tenant books a service. Cost is $10.99/door per month and includes $600 in credits and reimbursements per lease term.
Pest control coverage for residents with PestShare. Cost is approximately $5/month for basic coverage (bedbugs, fleas, ticks, weavels, and mites). Other pests can be added to the coverage for an additional cost. They can handle anything even if it’s not covered as part of the monthly program. Available in all 50 states. They reach out to the pest control company you already like working with to try to sign them up, if they are not already a partner. Your resident requests service at PestShare.com, where they simply enter their address and the details of the pest issue. If the pest is outside coverage, PestShare reaches back out.
Utilities & Banking
Utility concierge with Citizen Home Solutions. CHS will assist incoming residents with setting up utilities at their new home, so you don’t have to. They call the incoming resident (on behalf of your firm) to start the process. They can help your resident set up water, gas, electricity, internet, phone, cable, satellite, and security. Revenue share is 20% gross revenue on any services CHS gets paid on (service must be installed & funded). CHS can sometimes save residents money on cable/phone/internet pricing versus what they would find publicly advertised. Assuming 15 move-ins per month, the revenue calculator on the website shows approximately $3,500/year in revenue sharing with the property manager.
Analysis banking with Enterprise Bank & Trust (previously Seacoast Commerce Bank). Analysis banking is a special type of banking relationship where the bank looks at your company’s average balance across all accounts, and instead of paying interest, provides credits which can be applied toward bank fees and 3rd party invoices paid by the bank on your behalf. When considering analysis banking options, don’t focus just on the rate; the bank fees matter. Enterprise Bank has a great reputation among property managers for being easy to work with, low-fee, and very rewarding in terms of the credits they provide through their analysis banking program. To use your credits, the bank has to pay the invoices (you submit the invoice to the bank). Your state may require the bank to have a local depository branch within the state. Enterprise has branches in 26 states. Contact Allison Disarro for details & mention my name: adisarro@enterprisebank.com.
Security Deposit Alternatives
I wrote an entire huge article on this topic, but it’s worth mentioning two companies here that do offer some sort of revenue share or referral program. The more of your residents that sign up, the more money you can make.
Obligo (billing authorization model). Their model is based on the familiar “credit card hold” used by hotels. When a prospective tenant applies to live at a property that uses Obligo, the company links the tenant’s bank accounts and credit cards to verify identity, income, and funds availability. If the resident is approved by both the property manager and Obligo (who does their own underwriting) and moves in, instead of collecting a security deposit, a “billing authorization” is created. This means that after the resident moves out, if the landlord makes a charge for unpaid rent or damages, Obligo can start collecting from the resident using those pre-existing bank account and credit card links. Obligo provides revenue share option to property management partners. They told me you can expect approximately $1 per unit per month in revenue share once Obligo is fully saturated across the portfolio.
Rhino (surety bond model). In this model, Rhino promises to pay the landlord in the event the resident does not uphold the financial obligations in the lease agreement or return the apartment in good condition. Rhino stated in an email to me “Rhino doesn’t have a standard revenue share program. Rather we work with our partners on an individual basis to create the most impactful programs possible.”
Insurance Programs
Rent guarantee (default) insurance with Steady. This program can be included as part of a higher-tier management package. For their 2-month rent default insurance product, the overall average cost is $23/mo (based on $1800/mo rent). It provides reimbursement of rent losses due to eviction, lease break, abandonment, etc. Requires certain tenant & lease qualifications. Documentation (tenant screening report, income verification, lease) required at time of claim but not at purchase. Steady does not provide revenue share with landlord/property management partners, but their product is attractive and can be used to up-sell higher-tier property management packages as a way to drive revenue.
Landlord (property) insurance with Steadily. They specialize in single-family through 4-unit properties. Property managers can refer their owner clients. In return, Steadily provides monthly payments equal to $5 per active property per month, or one-time $50 commission per lead. They have coverage in all 50 states with their partners. They are an agency and work with 8 different carriers. Your owner client can receive a bindable quotes within 10 minutes. Your property management company can automatically be added as additional insured (huge timesaver)!
I hope you found this collection of information useful!
I’m Peter Lohmann, CEO and founder of RL Property Management, a residential property management company located in Columbus Ohio. If you enjoyed this article, you can connect with me on Twitter, subscribe to my podcast Owner Occupied, or sign up for my mailing list.