As the residential rental property sector matures, institutional landlords and rental property investors find it harder to discover new growth avenues due to increased competition and a higher cost basis.
Coming at a time when AirBnB and other short-term rental providers are starting to experiment with long-term rentals, subscription-based living is slowly entering the sector. Institutional investors, in return, are trying to replicate the success of Netflix, which grew annual subscription revenue from $150 million in 2002 to $25 billion in 2020 with new business models.
Frustratingly, most existing solutions offering a subscription model for landlords fall short. Either they require too many changes to your core business or take too long to implement.
Heimstaden, one of the innovation leaders of the European residential rental market, has an exceptional tenant service offering that enriches their tenants’ lives through all points of contact. Their business goal is simple: give more value to get happy customers to stay longer.
They achieve that goal by providing a range of tenant services under their Friendship concept:
There are many benefits to this service offering, one of which is improved tenant retention.
Keeping tenants longer boosts your profits. If your rental price for a one-bedroom apartment, say in the Polish market, is €450 a month (zł2,050 in local currency) and the average tenant’s ‘lifetime’ is 20 months, that’s a lifetime value of €9,000. What if they stayed an additional six months? That’s an additional €2,700 generated from each tenant.
The result? Returns that any real estate investor should envy. The overall CAGR of the European residential market is estimated to average 9% from 2017-to 2027. The CAGR of Heimstaden’s net income from residential rental properties from 2016-2020 stands at 48%.
However, as similar service offerings become pervasive across the sector, simply doing what worked in the past will not suffice to continue growing at similar rates in the following years. Landlords, big and small, are aggressively rebranding themselves as sustainable and friendly.
At Bidrento, we have created a turn-key Extra Services solution to solve that pain. You can use Bidrento to deliver your services as digital subscriptions. At the same time, reducing costs, accelerating your overall revenue growth, and increasing your Net Operating Income (NOI) and Lifetime Value (LTV).
The best part? It works for any portfolio of services and fits perfectly with a white-label mobile app with your branding:
With Bidrento, new tenants can download a custom branded app and order the initial free offer (the free move-in help) instantly after signing the rental agreement via an automated message:
You avoid costs that the competition will inevitably incur as digital transformation takes hold across the industry. An untold secret is that businesses have to pay a lot of money and run separate campaigns to advertise to get app installs. You do not pay for
Your free offer leads tenants to directly explore and order other services in the app.
With Bidrento, you have a service delivery mechanism to test different services, just like Netflix’s successfully experiments with content. Bringing a new service to market, with its unique pricing and details, takes just moments in the Bidrento admin interface.
You can grow your portfolio of branded services from a similar selection of HeimGardening, HeimCooking and HeimArchitecture to a broader range and find the mix that works best for you.
Thanks to Bidrento being built on a modern API architecture, you can create innovative services by integrating different intelligent solutions and creating value that your competition finds challenging to replicate.
For example, Bidrento can automate a service like HeimPresence to offer customized alerts, notifications triggered by intelligent data and devices from your buildings to aid in the fight against the loneliness epidemic ravaging the Western world and engage the elderly or at-risk tenants.
Become the industry leader for the next decade
Building up tenant services as paid subscriptions is just one of the many practical solutions we offer for institutional rental property managers and landlords.
All it takes to see a match between your vision and our offering is a quick, 30-minute call with our CEO, Taavo. Book your appointment here: https://meetings.hubspot.com/taavo