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What are the Top Sources of Ancillary Income?

Ancillary income for multifamily properties is always a hot topic, both for punitive fee-based charges, as well as service upgrades, and was a compelling session topic at the 2017 National Apartment Association Education Conference and Expo.  According to Chase Harrington, COO of Entrata, ancillary income averages 4.4% of scheduled monthly charges, and he shared their research on the top 20 sources of ancillary income: Additionally, the panelists at the session, Gunti Weissenberger of Westover Companies, Kellie Hughes of Mill Creek, and Robert Speck of Bonaventure, shared their top 10 sources of ancillary income: Westover Companies Mill Creek (Modera Brand) Mill Creek (Alister Brand) Bonaventure Utilities Garage Early Termination Fees Late Fee Income Early Termination Fees Parking Parking Garage Income Laundry Early Termination Fees Laundry Income Bldg Facility (Renters Insurance) Month to Month Fee Amenity Fee Late Fee Pet  Rent Pet Income Storage Pet Premium Month to Month Premium Water Application Fee Administration Fee Laundry Income Billing Fee Pet Premium Application Fee Valet Trash Cable Internet Initial Pet Fee Initial Pet Fee Application Fees Late Fee Administration Fee Misc Income Pet Move-In Fee Short Term Premium Late Fee Storage Parking Income   The session also shared some data from NAA on actual ancillary income averages in some top metro areas:   The panelists also shared some insightful comments about specific ancillary income options: RUBS - Gunti Weissenberger indicated that they don't prefer using RUBS as their residents don't like the way utilities are broken out.  He mentioned that when they switch to......
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How to RUB your Residents

How to RUB your Residents
You’re out at a restaurant having dinner with several of your friends. The drinks are flowing, the conversation is engaging, and the food couldn’t be better. It’s a great time until the bill comes. The mood quickly changes as everyone tries to figure out how much money to pony up. Someone suggests splitting the check evenly, but that’s clearly not going over well with the person who only ordered a salad. Your vegetarian friend doesn’t want to pitch in for the table’s calamari, and a few of your friends didn’t drink any of the wine that was ordered for the group. Most likely, someone will leave for the night feeling like they paid for much more than they consumed. Divvying the utility bill for a multifamily property can be a lot like dining with a large group of friends. Fairly allocating the charges isn't always cut and dry. If you’re lucky, your property is equipped with submeters, which will give you a precise reading of what each unit is responsible for. However, submeters aren’t feasible at every property, which leads many property managers to use RUBS when allocating resident utilities. RUBS stands for Ratio Utility Billing System, and is a cost-effective and fair alternative to submeters. RUBS essentially divides a utility bill among your residents based on certain criteria. Different utility types can often influence what RUBS formula a property uses. If you are thinking about billing back for utilities and want to implement RUBS, here are the different calculations to consider. Occup......
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Increase Your Income Property Bottom Line with RUBS

From Los Angeles to New York, and Anchorage to Key West, properly allocated utility responsibility and cost is a very important subject in the apartment rental business. As utilities are supplied to a rental property, they are typically split-up, or “branch off” to connect to individual units from the main supply. Ideally, these splits could then accommodate individual meters and shutoff controls. Ideally, each user of the utility being provided would then pay their fair portion of use.   In most newer construction properties that is indeed the case. In older properties, however, master metering for the entire property is something owners must often contend with. When properties are master metered this results in higher expense ratios due to utility costs and hence lower net operating income. Sometimes it is possible to split up the electrical and gas meters, but often this proves impossible. As for water and sewer costs, separate metering is virtually unheard of and these costs are almost never charged to tenants.   For many years, this all-too-common predicament has left a major issue for the rental owner to sort out. The choices have been to either find a way to run new lines, meters, and equipment in the case of gas and electric metering, or take on the financial obligation of these as well as water and sewer costs in any event. In the case of commercial properties costs can be administered via lease language and CAM charges, but that is not available to multifamily properties. And eve......
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