The True Cost of Hidden Fees in Multifamily Housing

There’s nothing more frustrating to a prospect than after they’re ready to sign on the dotted line, a property does a bait and switch. For a majority of the leasing journey, they’ve been budgeting for one price, but when they see the all-in price that includes fees, sticker shock sets in. They’re then left with the tough decision of whether it’s worth it to them to move forward with the lease or not.

Even if the fees are standard, surprises create the perception of “nickel-and-diming,” which can tank trust before the resident even moves in. Surprise fees can also be taxing on site teams who have to spend additional time negotiating or defending these charges. When conversion rates decrease and leasing cycles are extended, marketing spend is wasted, which has an adverse effect on net operating income.

A lack of fee transparency can severely impact your online reputation. Fee surprises are a common theme in negative reviews, and once that narrative exists, it’s hard to undo as prospects trust what their peers have to say more than a property’s marketing messages. Just a single one-star review citing “hidden fees” has the ability to outweigh dozens of positive reviews.

Many operators are still treating fee transparency as a compliance checkbox, but it can also be used to stand out in a crowded market. Renters are increasingly fee-aware and comparison driven. Transparency signals professionalism and builds confidence in your brand. It also impacts long-term resident satisfaction by creating trust at the outset.

But the most pressing problem with waiting to disclose fees is the exposure to compliance and legal risk the property puts itself in. Regulations around fee disclosure are evolving quickly at the federal, state, and local level. Properties that are relying on outdated practices or inconsistent fee disclosures risk fines, lawsuits, or forced policy changes. 

In a world where laws across all levels of government are constantly changing, it’s important to have tools in place to ensure you’re informed about the latest legal updates along with maintaining the compliance to the relevant fee transparency laws for your properties

To avoid the problems described above, property managers need to standardize fee definitions and disclosures across all of their communities. This can be aided when fee management is centralized and has the flexibility to meet the specific needs of your portfolio, so any updates that occur are distributed automatically.  Currently, laws have been enacted in Utah, Maine, California, New York City, New Mexico, Virginia, Massachusetts, Nevada, Colorado, and Connecticut with many more states and municipalities working towards putting fee transparency laws on the books.

Entrata’s Cost Estimation Calculator provides residents a fully interactive disclosure of all potential costs. The calculator includes real time pricing information that is 100% accurate and provides fully transparent pricing, which is imperative in today’s regulatory environment where 100% pricing accuracy is mandated. 

The Cost Estimation Calculator is able to deliver real-time, accurate pricing information because it’s integrated with Entrata’s pricing engine, while also streamlining the process of complying with new laws and regulations related to pricing. Additionally, it gives properties the flexibility on what third-party fees, like utility charges or deposit alternatives, to include on their websites and prospect portals.

Because Entrata acts as the system of record and already knows what fees properties charge, it’s easy to enable fee transparency features. It’s as simple as flipping a switch. Beyond that, as pricing changes happen regularly, having the ability to know fees and rental rates in real-time, so prospects are always viewing current rates.

Fee transparency and all-in pricing is about more than reducing costs. It also is an effective tactic to build trust with prospects and residents.. In a market where renters have more information and higher expectations than ever, clarity is no longer optional. Properties that embrace transparent pricing reduce friction, build credibility, protect their brand, and convert better leads at a higher rate.