By Jay Parsons, David Polewchak and Andrew Bowen Once upon a time, ancillary revenue amounted to rounding errors for most apartment communities. It was a line item designed to pass through costs with a small markup for basics like parking, amenity space reservations, trash removal or even the use of the clubhouse printer. Times have changed. Asset managers and property managers are now taking a much more sophisticated, data-driven approach to optimizing ancillary or auxiliary revenue. Leading operators are finding that a well-managed ancillary revenue program can meaningfully impact bottom-line revenue and even enhance the value of a community. How? Change your definition of ancillary revenue Think bigger than the “other revenue” line on your P&L. What we’re focused on is everything outside of your base rent. The specific line items do not matter. Rethink the way you price unit amenities Ask yourselves this: When was the last time you did an amenity pricing audit? If you’re like most property managers, the honest answer is probably “when we built the building” or “when we took over management.” But those values can and should change over time and, even more importantly, pricing should be optimized around demand to maximize revenue. RealPage® data has shown that in 2020, balconies were the unit amenity that residents valued most. They wanted fresh air and some personal outdoor space. Did you optimize pricing for units with balconies – or did you just add a random number? Use external benchmarks and internal analytics to determine optimum pricing for each unit amenity. In some cases, you’re likely leaving money on the table. In other cases, you may be trying to command too big a premium, thereby letting those units sit vacant too long. Our data shows the average apartment community has 10% of its rent roll directly associated with a specific amenity. That’s a...

By Jay Parsons, David Polewchak and Andrew Bowen Once upon a time, ancillary revenue amounted to rounding errors for most apartment communities. It was a line item designed to pass through costs with a small markup for basics like parking, amenity space reservations, trash removal or even the use of the clubhouse printer. Times have changed. Asset managers and property managers are now taking a much more sophisticated, data-driven approach to optimizing ancillary or auxiliary revenue. Leading operators are finding that a well-managed ancillary revenue program can meaningfully impact bottom-line revenue and even enhance the value of a community. How? Change your definition of ancillary revenue Think bigger than the “other revenue” line on your P&L. What we’re focused on is everything outside of your base rent. The specific line items do not matter. Rethink the way you price unit amenities Ask yourselves this: When was the last time you did an amenity pricing audit? If you’re like most property managers, the honest answer is probably “when we built the building” or “when we took over management.” But those values can and should change over time and, even more importantly, pricing should be optimized around demand to maximize revenue. RealPage® data has shown that in 2020, balconies were the unit amenity that residents valued most. They wanted fresh air and some personal outdoor space. Did you optimize pricing for units with balconies – or did you just add a random number? Use external benchmarks and internal analytics to determine optimum pricing for each unit amenity. In some cases, you’re likely leaving money on the table. In other cases, you may be trying to command too big a premium, thereby letting those units sit vacant too long. Our data shows the average apartment community has 10% of its rent roll directly associated with a specific amenity. That’s a...