Article written by Tim Blackwell from Property Management Insider.
Increase revenue by relying on smarter waste services for your apartment community
Trash talk is hardly sexy, especially following a discussion about high-end apartment amenities, but Shawn Handrahan gave it a try at the recent Marcus & Millichap multifamily conference in Dallas.
Handrahan is CEO and president of Valet Waste, which provides services for handling the mounds of waste that residents produce each year. Superficially, this may not sound as glamorous as discussing the draws of infinity-edge pools, but Valet Waste provides doorstep trash and recycle pickups for more than 1 million units, giving Handrahan unique insights into the ways waste removal can increase revenue and drive resident satisfaction.
According to Handrahan, cleanly removing refuse not only provides a nice amenity for residents but adds noticeable value to properties through increased revenue and operational efficiencies. As far as elevator pitches go, that’s enough to make any multifamily operator stop and listen.
Handrahan attributes Valet Waste’s success to helping properties keep clean while also saving them the costs of regular billing cycles associated with conventional haul-off services. Hauling partially filled compactors adds up over the long term, and properties can save by working with a provider that manages pickup times.
“One of the large expenses that goes unknown in multifamily is hauling fees because they have no idea how full the compactor is,” he said. “You may be paying for two hauls a month, four hauls a month depending on the property. But that compactor may only be 25-30 percent full, and you’re paying heavily for that.”
That can get especially expensive when the price of oil and gas goes up, he added.
Valet Waste uses data and analytics to work directly with contractors to make hauls only when the compactors are full. Typically, this model reduces the number of hauls and lowers compactor expenses by requiring fewer pickups.
Maintenance staff can focus on more important resident issues
As another example, Handrahan discussed the ways that inefficiencies in the standard waste-removal model can trickle down to maintenance teams, who usually spend the first hours of their days policing properties to maintain curb appeal. With more efficient processes, a property’s maintenance staff can improve resident satisfaction and retention by reducing wait times on maintenance requests, as well as minimizing turnaround on vacancies by seeing to empty units more quickly. Plus, the maintenance techs will feel better about their jobs.
“How would you feel if you were this HVAC-certified maintenance technician, and you’re being asked to go out with a plastic bag and pick up pet waste?” Handrahan said. “It’s operationally inefficient. It drives employee morale down, and ultimately impacts turnover, which impacts resident satisfaction because you’re constantly having to reinvest in training.”
Upgraded waste and recycling services target younger demographics
As for demographics, Handrahan highlighted that Valet Waste has benefitted from the influx of Millennials in multifamily who don’t mind paying extra for someone else to handle the dirty work.
“Anything that you can provide to Millennials that differentiates yourself from the competition is useful,” he said. “It’s the reason why, as Millennials enter the market, our business has boomed so incredibly well.”
Handrahan estimates that the service can generate $40,000-$50,000 of net operating income for a property, depending on the size, and greatly impact asset value. The formula has helped Valet Waste, started in 1995, grow its portfolio to more than 450 management companies and owner groups throughout the multifamily housing industry.
Lowering costs with asset protection
Also, because these services collect trash and recycling at apartment doors, the apartment community spares itself the wear and tear of residents taking dripping, dirty refuse to the dumpster. The professional handling of waste removal ultimately serves as asset protection, which Handrahan translates into increased property revenue.
“It’s how often you pressure wash your breezeways and clean carpets, especially in high-rises,” he said. “That’s because you’ve got these folks taking their trash out. But if they’re staining that asset and you’re replacing that carpet in the common area, you’re making a capitalized expense that you don’t need to make.”
With these savings in mind, talking trash is starting to sound pretty sexy.