For property owners and managers, rent isn’t the only source of income. Ancillary revenue—income from services and fees beyond base rent—can add 4–5% to total property revenue (Multifamily Insiders, NAAHQ). While that percentage may seem modest, it can translate into tens of thousands of dollars per year, significantly improving a property’s bottom line. Additionally, when implemented thoughtfully, these services can enhance tenant experience and differentiate your property from competitors.
What Is Ancillary Revenue and Why It Matters
Ancillary revenue refers to any income generated beyond base rent, including:
- Parking fees
- Storage unit rentals
- Laundry facilities
- Pet rent and fees
- Vending machines
- Utility bill-backs (RUBS)
- Premium services (valet trash, package lockers, etc.)
Because these revenue streams often utilize existing infrastructure, they tend to have high-profit margins with minimal overhead. Moreover, with rent control or market constraints limiting rent increases, ancillary fees provide a legal and market-friendly way to boost NOI without directly raising rents. However, property managers must implement them strategically to ensure tenants feel they are receiving value rather than being excessively charged.
Common Ancillary Revenue Streams for Rental Properties
1. Parking Fees
Parking is often the second-largest revenue source after rent, especially in urban areas. Properties with parking lots or garages can charge $50–$150 per month per space, depending on location and demand (Tactica Real Estate). To maximize revenue:
- Offer reserved or covered parking at premium rates
- Rent visitor parking passes
- Consider EV charging stations for additional income
2. Storage Unit Rentals
Many renters lack adequate storage space, making on-site storage an easy upsell. Storage fees typically range from $20–$50 per month per unit, with some high-demand areas reaching $100+ per month (Multifamily Insiders). Chain-link cages or secured lockers in basements or garages can be monetized with minimal investment.
3. Laundry Facilities
For properties without in-unit washers/dryers, laundry rooms remain a reliable income stream.
- Coin or card-operated machines can generate $75–$200 per unit annually
- App-based laundry payments improve convenience and tracking
- Ensure cleanliness and maintenance to keep tenants using on-site services rather than laundromats
4. Pet Fees and Pet Rent
With over 70% of U.S. renters owning pets, pet fees and rent are increasingly common revenue streams.
- One-time pet fees: $200–$500 (often non-refundable)
- Monthly pet rent: $25–$50 per pet (Multifamily Executive)
- Provide pet-friendly amenities (waste stations, dog parks) to justify these fees and retain tenants
5. Utility Bill-Back (RUBS)
Rather than covering all utilities in rent, many landlords use Ratio Utility Billing Systems (RUBS) to distribute costs among tenants.
- Water/sewer/trash fees billed monthly
- Electricity and gas charges based on unit occupancy or square footage
- Landlords often add a 5–10% administrative fee for management, creating additional income
This system reduces landlord expenses and increases NOI while ensuring tenants are mindful of utility usage.
6. Premium Amenities and Services
Adding convenience-based services can generate revenue while improving tenant experience:
- Package lockers: Charge $5–$15 per month for secured deliveries
- Valet trash pickup: Implemented as a mandatory $25–$35/month fee (common in Class A properties)
- Furnished unit premiums: Fully furnished units can command 15–20% higher rents
7. Advertising and Partnerships
Large communities can partner with service providers to earn commissions:
- Bulk internet and cable deals (landlords receive a per-unit share)
- Revenue-sharing agreements with vending machines, ATMs, or food trucks
- Local business sponsorships for resident events
8. Short-Term Rentals and Guest Suites
If local regulations allow, short-term rentals of vacant units can generate higher per-night revenue than standard leases. Some communities charge tenants a guest suite fee of $50–$100 per night for visitors, creating an easy hotel-style revenue stream.
Best Practices for Implementing Ancillary Fees and Services
1. Ensure Market Alignment
- Research what competing properties charge for similar services
- Test pricing models before making fees mandatory
- Offer tiered pricing (e.g., premium vs. standard parking)
2. Provide Value to Tenants
- Tenants accept fees when they see clear benefits
- Keep amenities clean, well-maintained, and functional
- Frame fees as added conveniences rather than extra costs
3. Communicate Transparently
- Clearly outline all fees in lease agreements
- Notify existing tenants in advance of any new fees
- Offer opt-outs where possible to prevent backlash
4. Bundle Fees for Simplicity
Rather than listing multiple small charges, combine fees into a single “amenity package” (e.g., $50/month covering parking, trash pickup, and package lockers). This approach reduces fee resistance and makes payments feel more seamless.
5. Stay Legally Compliant
- Ensure fees comply with state and local laws
- Some jurisdictions limit utility bill-backs or pet deposits
- Work with a real estate attorney if implementing new fee structures
How Ancillary Revenue Boosts Property Value
A 50-unit apartment building generating an extra $50 per unit per month in ancillary revenue adds $30,000 per year in income. At a 6% cap rate, this translates to $500,000 in increased property value. Even minor increases in ancillary revenue can significantly improve property valuation and investment returns.
Final Thoughts
Ancillary revenue is an underutilized strategy that can increase NOI while enhancing tenant experience. Whether through parking fees, storage rentals, pet charges, or premium amenities, there are numerous opportunities to monetize your property’s assets.
By aligning services with tenant needs, maintaining transparency, and ensuring competitive pricing, property managers can successfully generate additional revenue without compromising tenant satisfaction. Start small, test what works, and scale up—your bottom line will thank you.
Make the smart choice for your properties today. Choose Beagle and elevate the resident experience to new heights.
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