If you’ve implemented a resident benefit package in your rental property, you know how helpful they can be in encouraging new tenants to move into your property. But, you may wonder, “Should I charge for a resident benefit package?” Learn more about these packages and the pros and cons of charging for a resident benefit package in this video with Rentec Direct’s Kaycee and Brentnie.
Resident benefit packages have become a common topic of discussion among landlords and property managers in recent years. Many housing providers know that resident benefit packages are an excellent way to encourage new tenants to rent from them. However, a common question landlords have when considering implementing them is: “Should I charge for a resident benefit package?”
Rentec Direct’s Kaycee and Brentnie discuss resident benefit packages in this video. In this video, they will talk about the benefits of resident benefit packages and answer the question of whether or not you should charge your tenants for a resident benefit package.
Should I Charge for a Resident Benefit Package? – Video Transcript
Kaycee:
Hey, it’s Kaycee and Brentnie from Rentec Direct, and we’re here to answer some landlord questions. Today, we’re coming at you with a topic on a resident benefit package. Now, this is something that you might have heard us talk about before. It’s something that Rentec Direct offers for all of our clients, and it’s something we’re seeing a lot more on forums.
Here’s a comment that we got on Reddit from the Landlord Forum: “I’m about to rent out my townhouse for the first time. Apologies in advance that this is a noob question. When browsing other listings for an idea of a rental comp, I notice a neighbor’s listing has a monthly $35.95 resident benefit package that is mandatory. In their description, it says “includes amenities such as renter’s insurance, credit building, identity theft prevention, and access to the online portal for payments and maintenance requests”. Is this a common thing to provide tenants?”
And I’m going to throw a follow-up one. Is this something that we’re seeing a lot of, Brentnie? And are people charging for it? What are the costs associated with it for the property manager? And should it be deferred to the tenants?
So, if you want to explain a little bit more about what a resident benefit package is, and the different values and ways that property managers and landlords are implementing them.
Brentnie:
Yeah, resident benefit packages are kind of a hot button topic right now. I feel like we’re seeing them a lot more. They’re basically a comprehensive way to package all of the not-specifically-in-house or building amenities that landlords and property managers are able to offer their tenants.
And yeah, I think that they’re increasing a lot in popularity. A lot of the features that a resident benefit package can offer are great for tenants, are great for landlords and managers, and I think that some of them are becoming a bit of an expectation in today’s age. Things like offering online payments, credit reporting, there are some states that are even requiring that you allow your tenants to opt into that. There are a lot of benefits to them, and they are definitely becoming more popular.
Learn more: The Power of Resident Benefit Packages for Landlords – Video
Kaycee:
Yeah, and these resident benefit packages are kind of exactly as they’re described in this question and how you outline them. There are all these services that landlords can help their renters access. And then if it’s something that the landlord provides, they can kind of market it as a resident benefit package or a value add to their tenants to increase occupancy rates, attract new tenants to their properties, and keep those properties occupied for longer.
So, ways to pay rent online, a tenant portal, credit reporting services, and then this one was saying, identity theft prevention. So all these things that a landlord might have access to in their property management software, like they do in Rentec Direct, that they’re integrated features, and then they offer them directly to their tenants. And it’s a benefit to the tenant, benefit to the landlord, benefit to the property owner.
And what are some of the costs associated with this? Is this something that we’re seeing people charge for? And how is the industry feeling about it?
Brentnie:
Yes, so that’s such an interesting question because it is, very state-dependent for one, but—
Kaycee:
It could be illegal in some states to charge for this kind of stuff.
What are the average costs of a resident benefit package?
Brentnie:
Yes! So, typically, we’re seeing these charges around $20 to $50 on average is what I’m seeing the most often, and that’s per month. Some of these features are things that you, as a property manager or landlord, have access to, probably for free, through your property management software. So whether or not you want to kind of offset that cost by deferring it to your tenant is an interesting conversation. So I do think that a lot of these features are something that, because they benefit you as a landlord or manager, they also benefit your tenants. We’re talking things like your tenant portal, where they’re able to submit those maintenance requests.
There definitely is a benefit to them that could warrant a fee, but I do also think that being able to offer them as a free benefit might set you apart from your local market. And so I do see a lot on these forums where these conversations are happening, that there are tenants that are not taking kindly to the idea of an additional fee on top of their rent, and on top of any other fees that they might be incurring. And so I do think that it’s becoming a little bit of a hot ticket item.
Some industry experts are defining this under the definition of a junk fee. Some States are calling it a junk fee, which means that they are attempting to regulate against it. So I do think that there is a little bit of contention.
Should you charge for a resident benefit package?
Kaycee:
I think of these fees as, are you putting more work into something, and thus you need to collect admin time? Or is it purely just a revenue generator that someone might be trying to make money off of something by reselling a product to their tenants?
So that’s one of the ways that, or one of the reasons I think we’re seeing that is because property managers have been marketed to by these companies as like, “Hey, you can make money this way. Just charge your tenants for this service, and lump it into a fee and call it a mandatory, resident fee or mandatory service fee that’s kind of added on as a monthly line item to a tenant invoice.”
On top of rent, they might also be paying a pet fee, a parking fee, and a mandatory resident benefit fee. That’s the one that’s causing the most questions, I think, from tenants looking at their invoice, like “Do I have to pay this? What if I don’t pay my rent online? What if I don’t want to use the portal? What if I don’t want to use these services?”
How can I boost rental ROI without charging a resident benefit package fee?
So, that’s kind of causing that industry uproar. But the other side of it is these are services that I would think, and I would want my tenants to use. I want them to have renters insurance. I want them to pay rent online because that’s been proven to reduce late fees. I want them to want to report their online rent payments to the credit card fee. So you’re always kind of wanting to think about that renter relationship and then the value you’re getting versus what your tenants’ expectations and experiences are with analyzing an invoice.
Learn more: Rental Data Shows Online Rent Payments Reduce Tenant Late Fees
Remember, these rent invoices are the biggest bill they’re gonna pay each month, so they might be really looking at ways to cut costs, and you would hate for them to cut the cost of paying for a service that they feel like they don’t need when they might be fine paying, you know, that ten to fifteen dollars a month for renters insurance, then they also have to pay this resident benefit package fee on top of it.
Alternatives to Charging Resident Benefit Package Fees
I always want to help people in our industry figure out how to provide the most value, but also be successful. So if you found a system that works, we’re always happy to hear about it. Let us know, are you charging for resident benefit packages? How are your renters receiving the services? I think that’s the most important part. Then, how are they feeling about these additional fees if you are charging for them?
Another thought that just came into my mind, too, is this mandatory fee and resident benefit package fee is kind of coming out of a want for property managers or landlords to increase revenue on their business income and rental income. Another way that we’ve seen people do that is to charge for online payments. And so that might be a fee that gets deferred to a tenant. If there is a fee associated through your software for a company for collecting an online payment. So if you’re looking for ways to provide services to your tenants that don’t cost money, maybe finding solutions that don’t charge these fees, so you’re not having to pay for that on top of it, or keeping it really small, like 50 cents for an online payment. So kind of thinking about all those little pieces that come into it.
Brentnie:
Yeah, absolutely, I love those helpful thoughts.
Kaycee:
So, Resident Benefit Package, I’d say final thoughts. I think they’re great. I think it’s a great way to market services that you probably already have access to, especially if you’re a Rentec Direct Client. But how much you might charge for them or for making it a mandatory fee, I would just look a little bit more into research about how people in your specific market are receiving fees like that, and definitely check your state laws, because we’re seeing some more regulation top down about the ability to even charge these fees in the first place. Any final thoughts?
Brentnie:
Yeah, I just say, I’m so curious if you guys do offer a resident benefit package, and if you do currently charge, leave in the comments, let us know what your experience is. If you have any more questions, be sure to send them our way, because we love having these discussions, and I’d be happy to discuss something else that is a burning question for any of our listeners.
