Managing a student housing community comes with unique challenges. Beyond micromanaging residents who have never lived on their own before, student properties have more operational complexities than a typical multifamily community. Take managing utility expenses, for example.
What do property managers have to do to recoup these costs from students? There are two common mistakes student communities often fall prey to. The first is padding the price of rent to include utility expenses. Apartments that include utilities can be a good way to entice students. But predicting consumption and the ever-changing costs of these utilities is a guessing game that often ends up shortchanging the property manager.
Another scenario is to offer students a “utility allowance,” which caps the amount of utilities the rent will cover. Students are then billed back for any overage beyond their allowance. It might sound like a reasonable solution, but the amount of work this entails can be overwhelming for a property manager.
Let’s say that a 500 unit community receives 2 invoice per unit. That’s at least 1,000 invoices every month that must be analyzed, billed back to residents, and then paid to the utility company. Student properties that rent by the bed instead of by the unit see an even bigger workload in this process.
Most student housing property managers will tell you that their time would be better spent on anything else.
This is why utility expense management solutions are becoming so popular among the student housing segment. Outsourcing this tedious process not only frees up a tremendous amount of time and resources, but also leads to improved NOI. Third-party partners thoroughly examine each invoice for accuracy, and determine what needs to be charged on a per-unit, or per-bed basis. This data integrates directly into the community’s property management software, giving the property manager real-time access to the utility data. If the utility invoices contain any mistakes, the partner will dispute them on the property management company’s behalf. They can also pay each utility invoice on time, helping to reduce unnecessary late fees that are assessed to the property management company.
If that wasn’t convenient enough, some third party providers, like PayLease, can produce convergent bills for your student renters, making it easy to get reimbursed for utility expenses. Convergent bills contain all of a resident’s charges – rent, utilities, and any other miscellaneous charges – in one statement. Students or their parents can pay all of these charges online in a single transaction. Payment data is reflected in the community’s property management software in real-time. The process gives students and their parents more transparency into their charges, and usually results in more on-time payments for the property.
With the emergence of more utility expense management providers, student housing communities are gladly handing off this necessary evil to the experts. And with all the complexities involved with managing a student property, why not make one thing easier?