Apartment Managers Fight Hard To Become More Attractive To Tenants In Houston.

Since the beginning of 2022, Houston has seen an incredible uptick in the amount of apartment homes being built, and the number of tenants applying for residency. With that growth comes a need for management companies to find ways to stay competitive and also affords new opportunities to generate ancillary revenue. According to the Matthews.com, “Multifamily rents are predicted to grow by 0.8% in 2023. There are currently 28,689 units underway… The metro saw 160,000 net units added during the past decade.” [1]

A recent report by RentCafé found that Houston’s apartment market is 46% more competitive than it was last year, putting renters in a tough position when looking for a new place to live. But developers are facing their own set of challenges. [3].

A Challenge For Property Managers

On average, there are about seven renters competing for each vacant unit in greater Houston. RentCafé said apartments tend to get snatched up in about 41 days once they become available. Adding to the competition is the fact that about 60% of renters opt to renew their lease rather than move [3]. The problem is that there’s not enough rental units to go around for everyone looking for an apartment.

This may sound like great news if you own an apartment building, but it has also fueled a construction boom in Houston for multi-unit rental properties. Houston metro boasts three zip codes among the nation’s top 50 booming apartment construction zones, with 77007 leading the charge as the 11th hottest zip code in the United States. In this area alone, a staggering 5,014 new apartment units have been added over the past five years, representing a remarkable 58% growth [2].

This means the competition is catching up. Everywhere you look, you can find new construction apartment buildings. What this means for the current apartment owners and managers is that they now have more competition in the market. As real estate investors and developers continue to fill the needs of a growing rental community, the marketshare for the current apartment communities will begin to shrink.

An Opportunity To Outpace The Competition

The good news is that this influx of new tenants presents a great opportunity for these owners to earn a substantial amount of new passive income while remaining competitive amongst some of the newer dwellings currently being built. One way to stay competitive is by offering amenities that tenants appreciate and are willing to pay for. One of the most popular amenities that is also seeing a boom is Valet Trash Service.

Valet trash service is simply doorstep trash pickup for residents 3 – 5 nights per week. This service is one of the highest ranked amenities among apartment renters, and is appreciated by most. Some of the benefits to tenants include added security, cleanliness, and convenience. Many tenants appreciate not have to hike across parking lots in the rain or at night, or dealing with stray animals lurking around dumpsters, and they enjoy the clean common areas and hallways when they have friends and family visit.

Valet Trash as a Profit Center

In many cases, valet trash services act as a profit center for property managers. In addition to the other benefits it provides, such as a cleaner community, property managers are able to monetize their resident’s trash. The money is made by simply charging residents more than the contracted per unit price.

The management company pays anywhere from $8 – $15 per month to the valet trash company. This cost is passed onto the residents who pay around $25 – $35 per month on average. Certain factors may impact the cost of the services such as type and style of buildings, number of units, and other special considerations. Nonetheless, the service is charged as a line item in the tenant’s lease agreement.

Consider a 100 unit property contracted for $12 per unit per month.

• The property manager pays $1,200 per month for the service
• Residents are required by their lease to pay $25 per month for the service
• Property managers collect $2,500 per month from residents
• Property managers make $1,300 per month off their residents’ trash

A property manager with a 1,000 unit portfolio could earn $13,000 per month off their residents’ trash. This is over $150,000 annually. Since it came onto the scene in the last decade, valet trash has exploded in use as a result of the financial impact it can have for property managers [4].

Encore Valet Services: Your Revenue Generating Partner

Let Encore Valet Services, LLC fill the gap between you and your competition. We streamline everything, making it simple to sign up and enroll your tenants. We offer a 12 month phase-in program for properties using valet trash service for the first time, and a 90-day risk free guarantee. Give us a call today! Your residents will appreciate it.

Call us at: (832) 639-5015

Email: info@encorevaletservices.com or visit our website: www.encorevaletservices.com. You can also find us on Facebook and LinkedIn.

References:

1. https://www.matthews.com/multifamily-market-report-houston-tx/#:~:text=Multifamily%20rents%20are%20predicted%20to,added%20during%20the%20past%20decade.
2. https://www.theleadernews.com/community/area-zip-codes-spearhead-houston-s-apartment-boom/article_82364d3e-7812-11ee-a3a1-afc764491e96.html
3. https://www.midway.team/blog-posts/houstons-competitive-apartment-market-poses-challenges-for-renters-developers
4. https://propertymanagerinsider.com/how-much-does-valet-trash-service-cost/