Would an All-Inclusive Rent Work?

Question

Hello BP Community!  I was interested in people's thoughts on offering an all-inclusive monthly price for a property vs. rent only.

In my market I am looking at SFH, long-term hold.  My primary target markets fall into three categories: families looking to get into the school district, divorced/separated, and families transitioning from selling their home but needing to wait to move-in to their "being built" home.  I feel a lot of people that fall into buckets 2 & 3 would prefer an all-inclusive payment and have everything taken care of (lawn care, snow removal, utilities, etc.).  I've lived in the market for a decade so I know what prices should be for these services.  Should I offer this (with an upcharge) to prospective tenants for ease of payment?  Or is this opening up a can of worms?

Thanks in advance!

JD Martin · Answer

It really depends on your market. Where I am, we have stopped offering lawn service as an add-on and have absorbed it into the lease (and raised rent accordingly) since virtually no tenants want to mow their own lawns any more, and the ones that do suck at mowing anyway. We tested this two years, coincidentally at the beginning of the pandemic, and found that only 1 or 2 prospective tenants even asked if they could mow their own lawns - all others were happy that it was included. After that we started moving all properties into the lawn service as they turn over and have about 1/3 of them on there now (a couple we moved with existing tenants and increased rents). We have also started adding included washer/dryer into properties and charging accordingly, as it has been another "service" that tenants increasingly don't want to bother with on their own. For years we never included w/d (tenants are hard on that kind of stuff) but the last few years we started noticing more people asking if it was included, so a few years ago we had a property that had a difficult laundry room so we included it there and it went over great - so that's another area we've added.

From what I have seen, more tenants are looking for "all accessories included" than "a la carte menu" leases. So we increase the costs and just include it. Personally, I like it, especially with the lawn care, because the properties look better with our professional crew and are cut and trimmed on a regular basis, which is easier on the lawn.

Scott M. · Answer

I would look at what other landlords are doing in your area first.  If no one is offering this it may be because no one has your brilliance and you have a great product or maybe because it is not wanted/expected.  Personally, I think the later.

For us locally, tenants expect to take care of the lawn, snow so this sort of all inclusive package would not go over well nor would the upcharge.  I think you might be better served offering it as an add on VS building it in.  Not everyone reads all the words in your ad and they make decisions based on photos/price so you may be doing yourself a disservice for charging a higher than expected rent for the type of home you are offering and see fewer applicants.

Also, you may open yourself up to liability being responsible for snow and if your contractor doesn't do it, or do it quick enough, or good enough etc.....