For property landlords, generating ancillary income from their real estate assets is an important avenue to give their bottom lines a boost.
It’s looking at different – and creative – ways of adding revenue from their tenants by offering those tenants additional services and by taking advantage of the physical attributes of a building.
One example of that is charging for parking for surface or underground space.
In many cases where utilities are included, some landlords may re-meter the building so that they make the tenant pay for electricity. That decreases a landlord’s expenses which in turn increases their revenue. In some cases it is difficult to re-meter an older building but new buildings are much easier to do with available technology.
Also, even in insurance, some landlords can provide tenant insurance at a discounted rate because they are able to do it in a bulk package.
The same holds true for cable. Landlords can include this in the rent costs for tenants who don’t have to worry then about hooking up cable. The landlord gets a discounted rate from a cable provider by purchasing cable for many different units.
One other unique way to generate ancillary income for landlords is through cell tower opportunities where they can make their roofs available to cell towers. If there are certain places where a cell tower needs to be located, landlords of buildings near that location can benefit from that by increasing their revenue simply by leasing out the space.
When it comes to location, some landlords have allowed billboards to be placed on their buildings as well.
There is also an opportunity in some buildings to put laundry in certain units and then increase the rent in those units so people don’t have to use the shared facilities.
The Texas Realtors association came up with 11 ways landlords can generate ancillary income by providing tenants with services that offer them value and income for the property owners.
Landlords can find optional services they can provide to tenants that offer them value and provide income to the landlords. Here are some of the innovative examples the association suggested:
The beauty of ancillary income is that it can be tailored for each specific building and for the specific needs of tenants there. Really, the sky is the limit. It’s a matter of thinking up ideas for services that tenants would really want to have.
Vending machines in the building lobby selling an assortment of beverages, foods and snacks, or other items?
If landlords are smart, they can generate additional revenue by thinking of all the different services and offerings tenants would pay money to have in their buildings.
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs.