Top 14 Multifamily Ideas To Add Value Including Drone Landing Pads

Earlier this week I had the pleasure of attending a multifamily housing forum in Houston, TX put on by IPA which is part of Marcus & Millichap. In one of the breakout Q&A sessions they had 5 high level property management executives discussing options for increasing revenues outside of increasing rents.

These added value plays are obviously happening via adding various amenity services to the apartment community. Most of these amenities are a-la-cart but some are added onto the leases. Some of these are reserved for higher end, class A assets but many could easily be added to class B/C assets as well. Below is a list of the various options for adding value to your assets and I have added a key to show which class property would be willing to pay for these type of services:

1. Pet Spas (Class A+) - in years past having a basic dog park would suffice but in order to attract these higher end class residents requires innovation and creativity. Adding a pet spa on site with options for grooming, boarding, etc. are in demand right now, especially with mid-to-high rise, urban assets.

2. Car Charging Stations (Class A/B) - the excitement and wave of people driving fully electric cars, including the new Tesla vehicles, creates a new demand in the multifamily space to add charging stations to the premise. Most of the communities that have these charging stations only have 2-3 stations and will create supply issues as demand for these vehicles increase. This is one way to stay competitive and to charge an additional premium for use of the charging stations.

3. Bike rooms (Class A/B/C+) - multifamily developers are now adding retail space to their communities creating a mixed use complex. Being able to hop on a bike for a quick ride to one of the retail sites is attractive. The ease of travel with a bike in cities with loads of traffic creates a demand for bike rooms to be accessible on the ground floors.

4. Room Service (Class A+) - having an on site kitchen to provide on-demand room service for busy professionals that don’t have time to make a home cooked meal is a very attractive service. This would definitely add a larger amount of expense but if you could attract a large buy-in from the residents than this could be a major revenue source for the property. Nicer hotels have room service and make a nice profit from it too. For some of the class B/C properties you could add a meal delivery service from local restaurants instead of adding a full kitchen.

5. Package Lockers (Class A/B/C) - security can be a big issue in many communities and package lockers provide an extra level of protection for packages that are being delivered. One of the property managers at this event in Houston stated that one of her class B properties receives over 60 packages a day and, as you can probably guess, these are mainly from Amazon. Another added service to this could be valet package delivery service where you deliver the residents package inside the unit. Another option here would be to obtain a contract with Amazon for adding the Amazon Lockers to the facility.

6. Valet Parking (Class A+) - this service would primarily be reserved for high-rise, urban living communities where having someone else park their car would save them loads of time. I don’t think this is new but definitely something to consider adding for added convenience for your residents if not currently available.

7. Craft Rooms (Class A/B) - instead of just adding a nice playground to your community to add value, you could also add a craft room that allows tenants the ability to do certain crafts. You could add various events and sell tickets. The more you can provide things for the youth in the community to do, the lower the amount of issues you will have with them getting into trouble.

8. Co-working Spaces (Class A/B) - many independent professionals are using services like Regus Offices to rent a co-working space where they can work in a communal environment and have access to services like WIFI, fax machines, copiers, secretary answer phones, conference rooms, etc. You can add these types of spaces on your property as a convenience for your residents. These spaces can also be for professionals where their employer allows them to work from home a couple of days a week. This would create an environment for them to focus on getting their work done instead of all of the distractions in a home setting.

8. Health and Beauty Spaces (Class A/B+) - adding an area for spa-like treatments can create an additional source of revenue. Especially if you can add non-personnel dependent services such as coin operated massage chairs like you see in malls and airports. I’m sure these are profitable since you see them everywhere and take relatively little capital investment upfront.

9. Reserved Parking (Class A/B/C) - having either covered or non-covered reserved parking is a must for any property class level. By simply adding some numbers on the parking spots or covering a few parking spots, you can charge $20-$50/month to provide reserved parking for residents.

10. Valet Trash (Class A/B/C) - probably the most common amenity already in place in many communities is valet trash. Being able to charge the tenants as a required add-on for this service provides for a cleaner community and fewer issues with bugs. All the residents have to do is set out their trash every morning and the valet trash service will pick up the trash. These services typically are performed M-F.

11. Renter’s Insurance Rev-Share (Class A/B/C) - many leases require tenants to carry some level of renter’s insurance. There are a variety of these insurance companies that will provide a revenue share for having the tenants sign up for the insurance at the time of signing the lease. This is a convenience for the tenants and also provides immediate security for the owners.

12. Lounges (A/B) - providing a sense of community with your residents is what will keep them at your property longer. Having a lounge can provide opportunities for your residents to network and create strong friendships.

13. Drone Landing Pad (A/B/C) - Yes! I am not kidding here. These landing pads are being installed very rapidly. Amazon is getting very close to launching their drone package delivery service. Having one of these drone landing pad sites on your property is a must moving forward. Don’t lose tenants to other properties because you don’t have a drone landing pad.

14. The Amazon Key (A/B/C) - you can give your residents the option of adding the Amazon Key so packages can be delivered inside the home. The Amazon Key service also adds a security camera in the home and connects to an app so the resident knows who is coming and going. This can also be used for allowing other people inside the apartment including pet sitters, cleaning crews, etc. while they are away but the resident can still see what's going on.

This list is not an exhaustive list of all the amenities that could be added to a community to add value but this list is a starting point.

The top 3 sources of revenue right now from these added amenities is:
1. Parking fees
2. Valet trash
3. Renter’s Insurance Revenue Share

I am a big advocate for doing focus group sessions with your existing tenants to see exactly what they want and what they are willing to pay for. There is no sense in spending money adding a service just to find out that your tenants won’t use it. I will be doing a series of these focus groups over the next several months and will post the results.

If you have a property that you would like for me to perform a focus group session then please reach out to me so I can discuss the details. These focus group sessions can add thousands of dollars of revenue to your bottom line.