apartment budgeting
Apartment Budgeting: Washer and Dryer Income
It’s Tuesday and we are back with another installment of Apartment Budgeting. Today we are writing about income opportunities as it relates washers and dryer income. Believe it or not this is an area where you can make a little ancillary income with just a little amount of effort.
Washer and Dryer Income Defined
This is money your community makes when you help someone lease a washer and dryer for their apartment. We are presupposing you have washer and dryer hook-ups in your apartments. If you do, simply find a local appliance provider that is willing to lease direct to your resident(s) while providing you a share of the revenue. Or, you lease the machines from the provider and re-lease them to your residents for an up charge. I personally like the first option better – less risk. It’s not a ton of money but every dollar counts.
The goal in my head is to make at least $10 to $15 per set per month depending on where you are in the country. Be it through the vendor revenue share option or your up-charging the resident, the aim is $10 to $15 per month.
Budgeting Strategy
If your lease program is already in place, this is a simple exercise of running out your current income based on your trailing information. If you are starting up a program, I would be conservative in the first year. And, use a conservative ramp up schedule for future years. Maybe start with two to five sets of machines depending on the level of interest you think you can generate. And, ramp up at the same pace unless demand allows for a more aggressive schedule.
Marketing Washers and Dryers
This is grass-roots kind of stuff whereby word of mouth is likely your most powerful medium. Get the conversation started by providing information in all of your marketing materials to include any print and all internet. Make sure your leasing team makes it a part of their programming. Give the first set away in lieu of any leasing special you might be offering.
It’s not huge money but again, every dollar counts when budgeting and running a multifamily community.
Your really liking ancillary income opportunities multifamily maniac,
M
Share this:
Apartment Budgeting: Laundry Income
To continue with our Apartment Budgeting conversations; this week we are penning on the subject of Laundry Income.
Laundry Income Defined
Laundry Income can otherwise be termed as revenue share. This comes in the form of upfront concessions given at the time of contract signing. Or, in the way of refurbishment of your laundry facility. In addition to the aforementioned, one can negotiate a long-term share of washer and dryer collections. The payments can be set to arrive monthly or quarterly.
There are an endless number of ways that these contracts can be negotiated ranging from the vendor coming out-of-pocket to completely update your laundry facility to paying for a small share. In lieu of that, you can negotiate for a larger share of the ongoing revenue and forego the upfront incentives. You really have to consider this on a case by case basis. And, if you don’t know which way is best – reach out and ask.
Laundry Income Budgeting Strategy
If you are setting up anew – request a collection analysis from your vendor of choice. Ask them to pull trailing data from a comp that is similar in size and demographic. Consider drivers that could cause differences in your property versus another. Drivers such as; in unit washers and dryer connections, in unit washers and dryers present in select units, usability of room (is it centralized or located in the basements of each building), number of machines in the room, etc.. All things should be considered to give you a fair idea of what to budget.
If you are set and forecasting the new year – consider your most recent twelve to eighteen months trailing. Consider any foreseeable causes for disruption to up or downside. And, consider your timing. Plug the numbers accordingly.
Laundry Income Marketing Strategy
Not to over stress the marketing is everything mantra but it really is and producing Laundry Income is no different. Make sure you rooms are dialed in multiple times throughout the day. Make sure that the floors are swept and mopped. Make sure the folding tables are clean and free of clutter. Make sure the trash cans are emptied regularly. Make sure the machines are clean to include the lent traps. And, make sure the lighting is 100% working 100% of the time.
And, by all means – hand out free tokens or swipe cards from time to time. Host a – do your laundry for free – happy hour every Wednesday night. Call is Duds and Suds – they bring the duds you supply the suds. Make it social. Have T-shirt folding races. Have the neatest fitted sheet folding contest. Blow it all out on Facebook. Share the love of duds and suds. Above all – give people are reason to love the laundry room so that they come back and spend money using your machines.
Your lovin’ laundry income multifamily maniac,
M
Prop pics: Apartment Therapy
Share this:
Multifamily Apartment Budgeting: Month to Month Premium
Photo by Mediamodifier on Unsplash
Welcome back to our series on Multifamily Apartment Budgeting for Tuesdays. I apologize for any confusion last week when I accidentally published Tuesday’s post on Sunday. This week, we will be discussing Month-to-Month Premiums.
Month to Month Premium Defined
The month-to-month premium, also known as the month-to-month fee or MTM fee, is a charge that is applied to residents whose lease has expired without renewal. This fee can either be a significant flat rate or a healthy percentage of the monthly rent. The main goal of this fee is to encourage residents to renew their lease instead of continuing on a month-to-month basis. However, if a resident needs to remain on a month-to-month basis, the fee helps to offset the risk of too many leases expiring in a given month.
Month-to-Month Budgeting Strategy
Including your month-to-month leases is crucial when reviewing your lease expirations every month. For instance, if you have 100 units and five leases expiring in August but also have five month-to-month leases, you have ten expiring leases in total. This means that ten leaseholders could provide notice to vacate, which may result in a significant drop in occupancy.
As for budgeting month-to-month fees, I would use twelve months of history to forecast the future. Charge-up is the more significant thing you must deal with regarding this line item. This fee is often waived out of sympathy for the leaseholder’s situation. Gentle reminder: we are in a business to make money, and part of making money is pricing in a risk premium on items with potential downside effects, like the scenario above. So, charge the fee and collect it.
Share this:
Apartment CapX Budget Over Again
The Apartment CapX Budget is Over Again? How many times have you heard that statement in some form of fashion? And, I am sure – if you are anything like me – you just can’t understand it. Nor, in all fairness, do you take the time to understand it because you have a million other things that need your attention. But, I do have an idea as to why…
Humans Make Mistakes
Simply put – humans make mistakes. And, or they are innately incapable (not a dig – just plain reality) of thinking about every little nuance of a project. Or, they are too confident in their ability to forecast. But, most of all there are just too many steps in the process. And, the more steps there are the more opportunity there is/are for mistakes.
Apartment Project Management
A project is set up as a series of steps and each step has a probability of failure. With that in mind, I thought I would list a few examples of where exactly things can go wrong:
bad process, choice of vendor, equipment/mechanic, technology, your expectations are mis-communicated or not well understood, wrong leadership, wrong manager, inexperienced leader, poor choice of incentives, deciding to try something new, ordering the wrong product, product ordering mishaps, shipping delays, delivering the wrong product, weather, ignoring the canary in the coal mine, killing the canary in the coal mine (no canaries were harmed when writing this post), no tracking, loose tracking, leaning on our ability to track it in our heads.
And, the list goes on and on and on.
Solution: Fewer steps.
I think it is easy to assume that the weak link defines the extent of the success or the failure of the project. And, with all of these areas of opportunity for error – it’s no wonder that many times we come in over. But, still not acceptable in my head.
It’s a problem I am thinking through from an operational perspective. It’s one I think is solved with less steps and fewer people. And, I’m sure it will result in some posts along the way.
Hope your weekend is a crazy good one.
Your consistently thinking about apartment project management multifamily maniac,
M
Share this:
Apartment Budgeting: Damages
From time to time people vacate apartments and believe it or not they leave the space damaged. It could be anything from a cigarette burn on the kitchen counter top to fist hole in the bedroom wall. Whatever the case may be; it is considered damage and it can and should be charged for.
Fees associated with damages made to an apartment. Charges are applied at the time of move out and are taken out of apartment security deposits. Nearly every company I have worked with and for has a standard set of charges that are applied for specific damages. For example, if the apartment is left full of trash and debris, most companies will charge a fee to bag (per bag) and remove it. If there are pet stains on the carpet – depending on the extent of the damage a charge will be levied. If it is extensive and the carpet has to be replaced charges might apply for a full carpet replacement. There really is no end to what you can charge for provided it is within reason and according to city, state and national law.
Budget Strategy
This one is fairly straight forward. The line is typically built on twelve months of trailing information given the fact that it can and will fluctuate over any bit of time. You take the full twelve months of trailing numbers, add them up and average them. You can then straight line the information. That is to suggest that you can use the average number to budget each month. Another strategy might be to average the numbers quarterly so as to catch seasonality. Either way is appropriate.
Your getting pumped for budget season multifamily maniac,
M
Pic Props to ITSOGS