Wednesday, February 04, 2009

Apartment Manager's Little Money Maker

While real estate prices may be in free fall, there is an opportunity to generate extra income from the apartment tenants you already have and even attract new lessees. It's something they buy now or would like to. They would buy it from you if they could get a better deal. It's a perfect value added service for your business. What is it? Why, broadband Internet of course.

Apartment managers becoming Internet service providers? How does that make sense?

The fact is that whether you have a few dozen or a few hundred tenants, there is a substantial amount of money being spent in your building right under your nose. In some cases your renters would not only consider alternative broadband service, they'd welcome it. DSL and Cable Internet are sold to individuals, one at a time. Every apartment dweller is paying the same price for the same service as the person in the apartment next door or down the hall. There is no quantity discount when 5 people separately order service at different times. Consequently, you may have an entire building full of people who think they are paying way too much for broadband service or refuse to pay the price and stick with dial-up.

This is where you as the owner or property manager step in. What if you ordered a reliable, professional grade dedicated broadband service for your building? You use some of the bandwidth yourself for your own office or apartment. The rest you divvy up among renters who are interested. Or just make it part of the services you include with the rent. You'll get a T1 line or Metro Ethernet connection to the Internet. That's connected to a router that distributes it to network jacks in the apartments. Or you can distribute the service via wireless access points, similar to WiFi hotspots you find in airports and hotels.

Technically, this is very similar to what hotel operators are doing. They buy a large bandwidth service and divide it up among many rooms. Users are happy because they have broadband available that may well rival what they can get at home. Since not everyone uses the service at the same time, a single T1 line or 10 Mbps Ethernet connection can serve up to a couple dozen subscribers without excessive network congestion.

But what about the economics? OK, say you can get a 1.5 Mbps T1 line for $450 a month. That's not uncommon in metropolitan areas now, but the cost at your location may be more or less. If you have 15 users sharing that service, you can cover the cost at just $30 a month. So charge $35 a month and you'll make $5 x 15 users or $75 a month. Add yourself to the user list as #16 and your broadband is essentially free.

In a larger building, let's say you can bring in a 10 Mbps Ethernet service for $950 a month. If there are 50 subscribers for this higher speed service, the costs are covered at just $19 a month. You might even get 100 users to share that much bandwidth for a cost of $9.50 per user. Charge them $20 a month for 10 Mbps broadband and they'll consider it a favor. But you'll be making over $1,000 a month profit on this arrangement.

Something else to consider is offering lower speed broadband, say 100 Kbps, for occasional users and those who mostly send email and do casual browsing. They'll get always-on service that's several times faster than dial-up for maybe $5 or $10 a month. You could distribute this service via wireless access point, perhaps even running a lower cost fractional T1 line to save money.

Of course, you need to run the numbers for your particular situation and see if this idea will turn a profit for the number of people you can sign up and the costs involved. Find out what T1 and Ethernet line service costs for your location. Then factor in the cost of routers, access points, wiring and installation. A telecom network VAR can quote this and get everything installed and running. If it makes financial sense, you may well find that broadband Internet service can be the apartment manager's little money maker.

Click to check pricing and features or get support from a Telarus product specialist.

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