Today’s renters are looking for modern amenities and good value. One way property managers can provide this is by including services such as cable television, phone and Internet access. Considering bundled packages for these services can be an effective way to add value for your residents and set your business apart from the competition.
The National Cable and Telecommunications Association (NCTA) announced that capabilities for high-speed broadband service is making impressive strides. As of June (2013), almost 93% of US residents had access to high-speed Internet, cable television programming and cable-based home telephone service.
Since the FCC passed regulations that prevent regional monopolies for service providers, many of the 1100 cable operators have stepped up their efforts to initiate bulk retail agreements. Incentives of 3% to 5% revenue returns motivates many property managers to get on board with a mandated cable service for all residents.
It seems like a win-win-win proposition. Residents get a discounted rate on basic or extended cable (and possibly Internet), property owners get a monthly bonus for billing and collecting fees, and cable companies enjoy lower marketing and advertising expenses.
It is important to know your resident demographics before you negotiate a property-wide contract. Nielson reports that television ownership is on the decline. If a large percentage of your tenants aren’t using television as a major source of news or entertainment, the discount could actually be an unwelcome “rent increase”. Before you decide if a cable/Internet bundle is right for your property consider these facts.
- As more cable operators transition to digital services, people with older televisions must either upgrade their TV set or invest in an analog to digital converter box. Fewer people are replacing older television models; some turn to internet-based programming instead.
- Tenants are typically responsible for paying service calls — rates range from $25 to $75 per call.
- Millennials want speed. Any Internet package should be wide and deep to satisfy their digital appetite.
- Many people are happy with their current service; they might be resistant to change providers.
- Contract terms often span three to fives years.
Bulk retail agreements have many advantages for property owners. And most likely, the majority of your residents will be pleased with the convenience of paying their entertainment bill with their rent. To be sure how your tenants will respond, you might survey your tenants before making a decision.
Perception is vital to satisfaction. If you decide to move in this direction, give all residents plenty of notice and be prepared to work with hesitant renters. Update your lease agreement to reflect changes.
Bundling Other Services
Depending on the property demographics, negotiating simple discounts on services could be a better approach. Allowing residents to decide what services and companies work best for them builds rapport and value perception.
One trend that adds value is establishing property-specific discounts. It is no secret that online shopping has had a huge impact on local businesses. However, many communities backed by the Retail Merchants Association (RMA) actively promote buy-local campaigns with discounts and incentives.
Developing network relationships with local businesses to renters’ advantage supports the local economy, saves residents money and encourages community support. According to the RMA, 45% of every dollar spent locally stays in the community.
Here are a few popular discounts that appeal to renters.
- Rent or rent-to-buy discounts for furniture and appliances.
- Discounts for maid services and carpet cleaning.
- Property-specific rewards club at local bakeries, coffee shops and beauty salons.
- Special rates for truck rental or moving company services.
- Special property rates for cell phone and computer repair services and accessories.
- Tenant rate or waiver for the application fee at the neighborhood gym, spa or YMCA.
Get creative. Everyone likes to save time, money and energy. Build a bundle that fits your renters.