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New forms of other income, most likely, will not be realized instantly on a large apartment complex.

Other income items such as trash, amenity fees, or utility bill backs may take months (or longer) to fully implement. This is the case if you adding new forms of other income to tenants as leases expire.

Unfortunately, a lot of underwriting models I see do not allow you to model new sources of revenue accurately.

Example:

I would recommend gradually modeling the revenue from the new source of income over a period of time. So as more and more leases expire over time, you can accurately model adding the $25 internet charge to new tenants or new leases.

The Next Level Value-Add Model has several robust features where you can start, stop,

Pro Tip: I would always apply a vacancy percent to your other income charges. In the example above, I'm assuming by Year 3, all 100 tenants will be paying our new internet charge of $25/month, after a 5% vacancy factor.

100 units - 5% vacancy = 95 tenants

95 units x $25 charge x 12 months = $28,500

Same goes for other income items such as valet trash, new utility charges, and any new monthly fees. On your new acquisition, make sure you have a plan on how fast new forms of revenue can be realized.

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