“Late Fee Insurance” Coming Soon To Residential Buildings……Maybe

I came up with this idea about 5 years ago and I’m still waiting for someone at the executive level to take a closer look at it.  People who’ve worked with me, know that I’m always looking for ways to increase revenue and decrease expenses.  This will be the first time ever writing about the idea on a public blog and I’m curious what kind of feedback it will receive.  It’s such a simple concept and if marketed correctly, could be a cash cow.

It’s such a simple concept and if marketed correctly, could generate significant revenue in other income.

How many stores have tried selling you insurance coverage in the last 30 days?  Last week the cashier at Best Buy asked me if I wanted insurance on $10 headphones.  “Are you sure? It’s only $2 and if they break, you get a new pair.”  I was polite and said I’d take my chances.  Literally, every company is trying to sell insurance and it’s for property management companies to partake in the action.

Here is my (still in the works) pitch to a prospect:

I’d like to introduce you to a new program that’s being offered to new prospects and current residents at renewal time.  The program is called “Late Fee Forgiveness” and for only an additional $5.00 each month, you will be given 10 days of forgiveness.  As you know our late fee is $150, which is set in stone and exceptions are never made.  For example, if you miss paying your rent by accident one month, and you are a member of the LFF program, you’ll have up to the 10th to pay your rent.  Furthermore, there will be nothing negative on your records with us, which can be helpful down the road.  The 10 days can only be used for 1 month.    

Again, if sold and marketed to the customer correctly, it should be a no-brainer.  Now let’s say we have a 300 unit building, of which 50% are members, and we’re using the example numbers listed above:

$5 x 12 months = $60/year

150 members x $60 = $9,000/Year.

Why not take it a step further and charge $10-$15/month and give them 2 months of forgiveness.

We’re still going to collect on the residents that are habitually late.  I know there is a lot of kinks that need to be worked out, but there’s no reason why this idea can’t come a reality in our industry.