"Resident Benefits Packages" are gaining popularity, but are they the right fit for your tenants and your property management approach?
These packages bundle various amenities, services, discounts, rewards, and other offerings for renters, typically with a monthly fee ranging from $20 to $150 or more. This trend enables landlords to offer an all-in-one package, simplifying billing with a single monthly rate.
However, if the package is mandatory, tenant satisfaction and perceived value become less significant factors. Take care not to undermine trust within the tenant-landlord relationship by ensuring that these offerings genuinely meet your tenants' needs and expectations.
The goal is that tenants see these packages as convenient and helpful, but the reality can bemuch different. And as junk fees get more scrutiny, you'll want to be prepared for what's coming.
RBPs usually include a mix of
- Services like air filter delivery, residential credit reporting, and identity protection.
- Perks, offers, and discounts that thank tenants for paying on time or renewing a lease.
- Enhancements like easier maintenance access and free key replacement.
- Insurance programs to make sure renters are covered, which is often a mandatory part of the lease.
Typical inclusions are amenities like gyms, community events, pet services, WiFi, package handling, and more. But benefits packages are evolving far beyond just on-site features into holistic lifestyle programs.
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How are RBPs different from resident perks?
All residents get benefits, whether it’s simple maintenance and security, or lavish luxuries like gym, bbq, and pool access.
“Resident Benefit(s) Package” is a newer term, which refers to bundling all of these “extras” and charging for them.
Resident perks, on the other hand, are always accessible, showing gratitude for their tenancy all year long. Integrated perks programs enable companies to use positive reinforcement to drive desired customer behavior like signing up for Autopay, renewing a lease, getting more paperless billing signups, or completing a survey.
- RBPs are sometimes free, but often cost between $20 and $150/mo.
- Tenants often perceive the value of RBPs as low, because it can feel like a way to charge for services that are easy to DIY, or should be included.
- Landlords like the reduced risk of making sure everyone has insurance.
- A strategic alternative is to offer resident perks to all tenants through Paylode, and your company could generate more revenue and loyalty instead.
Whether you choose to package your benefits as an RBP and/or offer standalone resident perks, be prepared to follow the best practices.
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Best practices for implementation
Here are tips for crafting a stellar resident perks program:Â
- Optional enrollment. Only automatically enroll your tenants into your program if it’s free. Charging? Make it optional.
- Be fair. Don’t just use this as a way to get more money. An air filter costs $9 at most home improvement stores. Charge for the fair value of the benefits.
- Add value. Go above and beyond. Consider even more value than the examples we’ve given, like: 16 free meals from a popular mealkit service. Offer a mix of onsite amenities, technology, services, exclusive deals, local deals from nearby businesses, and seasonal deals. Variety adds value.
- Offer perks. Gift cards, deep discounts on home furnishings like linens, extended free streaming trials... Perks can easily add up to thousands a year in savings for your tenants, while unlocking a new stream of ancillary revenue. Include both "everyday expenses" like utilities, and “nice-to-have” indulgences like pet perks. Balance must-haves with surprises.
- Communicate. Prepare email messages to ask tenants for feedback, announce the launch, handle FAQs, and promote the program on your website, social media, and newsletters. Promote benefits actively through multiple channels - at move-in, emails, apps, flyers, events. Don’t make residents hunt for info.
- Make enrollment and management easy. Seamless experience adds satisfaction. Focus on convenience, comfort, entertainment, health, finance - key areas that enhance quality of living.
- Do your research. Design your package carefully and pay attention to what your competitors are offering. Ask a perks specialist for their market insights.
- Be flexible and adaptable. Evolve your program based on tenant feedback, economic trends, and new opportunities.
- Ask your residents what they want. Feeling heard and “more than just a number” is key, plus you’ll be designing a program that you already know residents will love. Survey regularly to identify new amenities or services to add based on resident requests. Adapt and enhance over time.
- Train staff. Be ready to handle phone calls, email responses, and live chat with courtesy. Prepared empathetic canned messages that your team can easily grab. Take the time to brief the company and prepare them with context, FAQs, and talking points.
- Be compliant. Follow applicable federal and state regulatory guidelines.
- Promote. Get your tenants excited about the program by showcasing its benefits.
- Use a 3rd party for the hard parts. Negotiating partnership offers, integrating technology for perks, and offering deals isn’t always in a property manager’s wheelhouse. Outsource the frustrating work to a company like Paylode.
Avoid the perception that it's a thinly veiled scam
Your biggest risk is in overcharging and underdelivering by making it mandatory. If the cost is being passed on to residents, they should feel that they're getting that amount worth of value, both tangible (free gym access)Â and intangible (events).
This is what you need to avoid, otherwise you will have the opposite issue on your hands:Â difficulty filling and renewing leases:
Are Resident Benefits Packages legal?
We spoke to a lawyer from JustAnswer to find out, are RBPs an illegal fee? Not right now, but they're certainly being viewed as unethical by many tenants. The pushback is real: Some companies claim that only a few tenants out of 100 will complain, but across thousands of tenants, that could pose a PR risk depending on how savvy its rolled out.
Why risk any dissatisfaction at all?
Is it worth it for the landlord?
Here's a 3-year old comment on Bigger Pockets from a landlord in Wyoming who has no ragrets, even with no ROI:Â
"I implemented one earlier this year. I mandated renters insurance and the benefit package covers that cost. If the renter provides their own insurance, then I reduce the cost of my benefit package. The price I charge and the benefits provided are on my website if you care to look.
Does it provide me a competitive edge? Not really, but only because I'm the only professional property manager in the area so I don't technically have any competition to start with. It does help with owners because I'm able to show the mandatory renters insurance and a couple other features that help protect the property, the landlord, and the renter.
I've signed up almost 300 of my 400 rentals and so far nobody has left because of this change though quite a few have complained about it. When they complain, I simply tell them that is our policy and they can accept it or find a rental through someone else.
Is it worth implementing? only if you have a large number of rentals or plan to grow to a large number of rentals. My "profit" is only $9 a month. However, that comes to about $3,600 a month because I manage 400 rentals. If I had 50 rentals, I probably wouldn't bother."
Key takeaways:Â
- Profit isn't worth it, even at scale, because:
- When those leases come up, you can bet those tenants will be shopping around. And instead of raising their rent, you opted to profit off of them for $9. Is $9 worth losing a lease over?
- Complaints are up. When complaints are up, bad online reviews are next. And those are going to be a lot harder to course correct.
- The insurance seems like the main need.
We recommend that your program be optional to enroll, unless it's free
The government agrees that junk fees are out of control, and these regulations would mean that hollow or fake add-ons will be under scrutiny. What's worse, you'll erode trust with your residents when you need it most – in their first lease.
If the end of the year comes and you don't hit your lease renewal goals, it's too late to course correct.
Make sure that these packages are not just aimed to get more money out of residents. They're intended to add amenities and value to offset or go beyond the standard.
So we all agree: Your package must have high value. Let's put it together.
Core inclusions
Just like a menu, there are many ways to decide what should be included. Understand the price to the company of each amenity, so whether you're building it in-house or outsourcing to a company like Second Nature, you know the cost to the company in comparison to the value you're offering.
- Discounted/free access to on-site amenities: gyms, pools, lounges, parking, etc.
- Technology perks: WiFi, cable/streaming packages, smart home upgrades
- Building services: package handling, maintenance requests, dog walking, laundry
- Community programming: events, activities, classes
- Referral and renewal rewards: credits, gifts for referrals and renewing leases
- Partner discounts: negotiated deals with nearby businesses
With the basics covered, perks provide that excess tangible value that tenants are looking for.
Taking packages to the next level with perks
You can start right now with a perks program and run it separately from your RBP, or instead of. Resident perks enable you to get the value tenants want, with much less complication.
For example, Paylode's marketplace has over 1000 high-value and exclusive deals that are more valuable than a regular "coupon site". Tenants can browse and getluxury bedding for 65% off. And they'll know they can't find that kind of deal anywhere else except in your tenant portal. Plus, perks can be emailed, texted, embedded into dashboards, and more.
What else can you offer tenants through Paylode?
- Subscription boxes
- Meal/grocery credits
- Ridesharing credits
- Gym and fitness deals
- Pet perks
- Travel and leisure discounts
- Wine/beer credits
- Salon/spa discounts
- Electronics deals
- Movie and entertainment offers
- Local restaurant deals
- Retail gift cards
- Access to ticket presales
Perks make residents feel special. Exciting offers tailored to resident demographics and lifestyles are the hallmark of a progressive, valuable benefits package. They drive retention, organic buzz, and resident happiness above and beyond basic amenities.
Whether or not you are rolling out a resident benefits package, you can instantly super-charge your resident experience with an addition of Resident Perks—a curated collection of pre-negotiated discounts for products & services your residents are already looking for.
Furniture discounts, renters insurance, identity protection, pest control, food, and lifestyle products are amongst the most popular perks offered by real estate managers right now.
The bottom line
A thoughtfully crafted resident perks program will delight tenants with surprises, and build community, as long as its free. With the right mix of perks and amenities, your rental property can foster residents who stay longer and spread good word-of-mouth – ultimately improving your reputation, occupancy and bottom line. Through Paylode, you also generate ancillary revenue through these partnerships.
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