I will start off by saying thank you to everyone who posted in my last thread titled "Should I Use Cap Rate or ROI?" Please review if you feel lost in this thread.

Assumptions:

1) Lets assume that the WiFi service will be vastly superior in speeds, latency, mobility, ease of use, security and overall value. Lets just assume for this conversation the residents will not have a better choice when it comes to total internet experience (yes this is possible).

2) Lets assume that the SRP to the residents is $50 a month AND at that price they save $25 a month (Cable Internet - $75 national average).

3) The owner will increase the NOI by $30 a door per month ($50 SRP-$20 expense = $30 NOI) and is highly motivated to have this for each and every resident.

Here is our most recommended approach:

-Include it in the rent or into the RUBS for $50 per unit to everyone.

-Set up an opt-out clause (screamers only) for up to 10% of residents who do not use the Internet (if they still exists).

-If it's a new-build or no occupancy situation than simply add the cost to your pricing model. If its a previously occupied property use our ramp-up services. Basically we work with the owner to take pre-orders and on-board as many residents out of the gate.

-As each lease renews or as new leases are signed implement the new Internet protocol from above.

-By the end of year one, 90-100% of the property in theory will be paying $50 a month.

Example: A property with 150 units decides to install Property-Wide WiFi (PWW). We can assume that 8.3% (1/12) will be enter into new leases or renew old leases. In the first 90 days 50% of the residents decide to sign up for the new services and 24.9% are automatically included through their new lease. We can assume that between 50%-74.9% of the residents will be on-boarded within the first 90 days. The remaining % will be converted throughout the year as leases come due.

Any Better Ideas?

How can a owner get 100%? Maybe we are over thinking it but we really want the communities input here.

Thank you BP community in advance for all your great ideas!

0 Votes