What if you don’t want to tow your residents' cars?

April 19, 2024

TABLE OF CONTENTS

No one likes towing cars. For property managers, managing the tow and fielding complaints from residents is exhausting. And for residents, the pain is even worse. Getting towed — whether rightfully or in error — negatively impacts their overall experience at your community and can lead to bad reviews and the decision not to renew a lease. 

Renae, a property manager we consulted, advocates for a more empathetic perspective on towing:

“Towing a vehicle could mean the person can't go to work, take kids to school or get groceries. Money is so tight that the tow bill would devastate many families. Please, proceed with caution and compassion.”

You also have to consider the complex legal standards of when you can and cannot tow, which can vary from state to state. Failure to comply with these can land you with a hefty fine or even getting sued

Despite all of these complications associated with towing, property managers often feel pushed into a corner, thinking that towing is the only way to nip unauthorized parking in the bud. 

Although towing may be the best solution in some cases, in this blog we want to highlight some alternative solutions that can bolster your enforcement strategy without all of the hassle. 

But first, let’s zoom out a bit

You may be able to eliminate much of the need for towing altogether if you address the underlying issue. In many cases, improper parking is caused by a parking shortage, whether for tenants, guests, or both. If people have nowhere to park properly, they likely feel they have no choice but to keep parking improperly. 

Towing, or using alternative consequences, is only going to add fuel to that fire. So you first want to make sure that you get your parking shortage in check before you double down on towing. 

We went into all of the possible solutions to resolve your shortage in-depth in a recent blog post, so we’d recommend checking that out before you continue.

Your first line of defense: communication

Good communication is critical to preventing improper parking in the first place. Uncertainty around parking rules will lead to more people parking where they shouldn’t be, and more headaches for your team. This means making your parking rules easily accessible and readily understandable, and making it easy for residents trying to follow the rules.

As an example, take a look at your existing protocols: When a resident purchases a new vehicle or has a guest over, are you requiring them to obtain a physical pass or sticker for that vehicle? If so, what should that resident do if they are not able to come by during business hours, or if your staff is giving a tour or otherwise unavailable? These types of barriers can be frustrating for your residents, especially when they are trying their best to follow your community’s rules.

Any time the rules change, be sure to communicate across several channels, like email, push notifications, and physical letters on their doors or in their mailboxes. Make sure to also give your residents adequate time to adjust to the changes, especially if it requires any physical changes or movements — you never know when someone might be out of town!

Clear signage around your property is also crucial. Putting up signs that state clearly what parking is and isn’t allowed in certain zones, as well as the consequences that people will face for breaking the rules, will eliminate the possibility of improper parking by way of ignorance or uncertainty. While there is signage that is required by law, you may want to go beyond these requirements to make sure you cover all of your bases. 

When to give warnings

There are times when a simple warning will suffice to quickly resolve any parking issues, preventing the need to tow. Some common scenarios where you might give a warning are:

  • If this is someone’s first time breaking the parking rules
  • If someone took the improper parker’s spot, and they had no immediate solution to relocate elsewhere
  • New rules were recently established

Many properties like to lead with this gentler approach to give residents the opportunity to correct their parking mistake before experiencing consequences. 

One property manager, Patience, told us:

“If the vehicle is in our system, we contact the resident. Typically that solves it.” 

These warnings can be via email, text, phone call, or push notification if you have contact information associated with the car. This typically leads to quicker solutions. 

If your records aren’t up-to-date or the mis-parked car doesn’t belong to a tenant, you can leave a paper notice on the windshield. However, it’s possible the parker won’t see this notice until they are about to leave anyway. You’ll also likely need to create a log and keep track of violators or vehicles that have received warnings so you can keep an eye out for repeat offenders.

Administering fines

Typically, fines are a big enough deterrent to get tenants to stop parking improperly. If you are able to trace a vehicle to a certain resident, you can tack the fine on as a line item to their monthly parking fee or ledger. Tech-based parking systems make it extremely easy to automate these fines. 

Even a fine as small as $20-30 can make someone think twice about ignoring the rules, and is likely preferable to the hefty $200-400+ fees for retrieving a towed car. 

If smaller fines aren’t working, you could always increase the fines as offenses build up. For example, charge $25 for first offenses, $50 for second offenses, and $70 for third offenses. 

This fine can serve as a warning of sorts, too, before towing. You can assign a fee with the caveat that if they don’t move within a set period of time (typically within 24 hours or by the end of the day), you will tow. 

Other properties use a point system:

“We use a point system with one point per infraction,” property manager Ben Johnson told Parkade. “The first point is a warning, 2-4 points are fines, and at 5 points we tow.”

Another benefit of issuing warnings or fines is that they can be waived or removed. On the off-chance you made an error, such as identifying the wrong car, or even if you just want to give the resident another chance, removing a fine or warning from someone’s ledger or file is always an option.

This is usually not the case with the next, heavier enforcement options: booting or towing. Once these physical enforcement methods are used, there’s no easy way to “take them back.”

Are boots or barnacles the right move?

Of course, fines are not a feasible option for unknown vehicles that might belong to guests or random cars from outside the community. For a solution that is a little less intense than towing for these situations, booting or adding a barnacle may be a good solution. 

The purpose of these contraptions is to demobilize an offender’s car, forcing them to pay a fine in order to move their car. 

Booting or barnacle fees are typically around 25% less than a towing fee and more convenient since they don’t have to arrange transportation to the tow yard, so the consequences are slightly less severe. 

One useful aspect of boots or barnacles is that they serve as a visual deterrent to the community. If someone is considering parking where they shouldn’t — but notices a car or two with a boot — they’ll most likely reconsider.

However, there is a big downside to these when compared to towing: the offending vehicles remain in their spots. Whereas towing immediately clears the cars out of the spots, having tons of booted cars hogging your spaces may not solve your problems.

There are some locations where booting is illegal as well, similar to towing, so you want to make sure you look into the legal complexities in your area.

When should you tow?

As we mentioned above, although towing is a pain, sometimes it’s necessary. Every property is different, and management may have certain preferences, but some general scenarios include:

  • Unregistered and unauthorized vehicles — i.e. you have no way of knowing who a vehicle belongs to, or how to reach them, and you have confirmed it’s neither a resident or guest
  • Repeat offenders in the community who are not deterred by gentler enforcement methods
  • People parked in specially reserved areas who don’t respond to notices and warnings
  • Vehicles parked in a way that creates safety hazards or can result in hefty fines to your community (such as blocking fire lanes or hydrants)

Here’s an example of one property manager’s criteria for towing in special zones:

“If they’re parked in handicap spots, ignoring closed-off parking areas (for painting, repairs, etc), or other such 'major' infractions, we will tow the same day. We will tag it or call the resident and tow by 5 if not moved or the issue isn’t resolved.”

As we mentioned, some properties like to use a point system to determine when to tow. Once parkers rack up a certain amount of points, or have been reported a certain number of times, they are automatically towed. 

Others have standards that are more specific to the features of their parking lot. One property manager, Sara, told us:

“I only allow them to tow if someone was in covered parking with no sticker or not registered or in handicap with no handicap permit displayed. I don’t allow them to tow for tags being out or inoperable unless the manager called personally to request a tow.”

What works best for many properties is simply scheduling tow patrols on a regular basis, balanced with other enforcement methods like warnings or fines:

“Our towing company comes out once a month and tags cars for non-movement, tabs, broken down, flat tires, etc. We also drive the property daily and issue warnings if needed.”

It is important to note that while patrolling can be a great way to actively monitor for violators, several states have banned the practice, or are thinking of doing so. If patrolling is legal in your location, and you choose to utilize that option, make sure to have extremely clear signage and rules to ensure fairness and prevent any allegations of predatory towing.

Good enforcement requires good records

Reliable and consistent enforcement is key in creating a pleasant parking experience for both your tenants and your staff tasked with managing it. This all starts with having good records.

Without a reliable system that is always up-to-date, enforcement is nearly impossible. Accidentally towing someone because your records weren’t up to date can be expensive, and can damage your relationship with a rule-abiding resident. On the flip side, letting someone get away with parking somewhere they’re not allowed to because your records aren’t up-to-date can also quickly spiral into frustration. 

If you do need to have a vehicle towed from your property, having thorough documentation of the violation is vital in ensuring you can fend off any allegation of unfairness. Make sure you have documented evidence of the violation, which may include photos of the vehicle and evidence of where it was located, written statements, and any records of prior warnings.

So, before you can even consider enforcement methods, make sure you have a strong foundation in place. For more tips on getting your end-to-end enforcement strategy in shape, check out our Enforcement Parking Guide

If you’re really clear that you need a better system to manage your parking, learn more about Parkade’s app-based, always up-to-date parking management solution

Follow us on social:

More from the Blog

Should you allow short-term rentals at your property? 

While single-family homeowners latched onto the appeal of listing their property as a short-term rental long ago, the trend is just beginning to pick up some steam in the multi-family industry.

Read Story
Why multi-family parking is becoming an issue

Parking at multi-family communities is becoming a growing challenge, especially in urban areas. But what are the main drivers of this issue? Read on to find out.

Read Story
How to reduce operating expenses at your multi-family building

With rising costs in the industry, it’s becoming increasingly important to find ways to cut down on expenses. Check out these tips from our experts.

Read Story

Want to learn more about Parkade?

UNLOCK THIS POST

Want to keep reading?

Almost there!

Success! Your content will unlock momentarily.
Oops! Something went wrong while submitting the form.
BlogParking Management Software ROI

Investigating the ROI of parking management software

With parking being one of the largest drivers of ancillary revenue at multi-family properties, it's imperative to get it right. But just how much return can you expect from parking management software? Read on to find out.

Published: August 7, 2024
Hannah Michelle Lambert
Content Writer
Boosting ancillary revenue is often a major focus for property managers and owners alike.

Especially given that the baseline forecast for rent growth is slightly lower this year than average (2.5% versus 2.9%), properties are increasingly looking for ways to raise their bottom line without compromising the quality of living for their residents. 

One often overlooked but significant opportunity lies in parking. If managed well, it’s a potential treasure trove for additional revenue. But that’s only if it’s done well. 

Parking tends to be one of the biggest thorns in the side of a property manager. Because traditional systems — like spreadsheets and rentable items — are not built to handle tenant parking efficiently, teams aren't able to reap the full benefits parking has to offer as an ancillary revenue source. As soon as a team makes the decision to invest in a proper parking management system, the benefits often more than pay for themselves.

In this guide, we will explore those benefits, touching on both the financial and operational upside of a solid parking management strategy.

We’ve combed the data from all of our clients to identify the exact numbers to prove that there truly is ROI in parking management systems like Parkade. 

Understanding parking management

Before we dive into the numbers, let’s first establish a baseline of what exactly parking management entails. As any property manager will tell you, it involves much more than just hanging a tag on a resident’s car and calling it a day.

The key components of a parking management system are:

  • A system of record to track parking assignments, lease lengths, vehicle details, and parking prices, ideally integrated with your PMS.
  • An enforcement strategy that ensures parking rules are clear and establishes consequences (typically fines or towing) when someone breaks them.
  • A method to pay for parking, whether it’s bundled in with rent (which we don’t recommend) or paid for in a separate system.
  • A self-serve system for residents and guests to book long or short-term parking. 
  • If there is a gate on the property, provisioning and deprovisioning of gate entry should also be considered in the parking management strategy. 

The old-school way of addressing these needs isn’t cutting it anymore. Many properties are still using manual processes, like an Excel spreadsheet, rentable items, or even a physical piece of paper to keep track of their parking. 

And far too often, properties are relying too heavily on staff members to handle parking matters that take up a significant amount of time, like enforcement or guest parking.

Moreover, there’s one point that just can’t be ignored: If you’re still using old-school parking management systems like spreadsheets and rentable items, you’re leaving money on the table. 

So the parking management we’re discussing here that delivers positive ROI is a technology-led solution that automates all aspects of parking operations, improves resident experience, and unlocks new revenue streams.

Setting the stage: Residents value good parking

Delivering on resident expectations should be a main priority for any multifamily property, and parking is one area of the resident experience that is especially critical to consider here. 

65% of property managers cite parking as a top concern among residents. Whether it’s for existing residents or prospective residents, providing a simple, reliable, and flexible parking solution has a direct impact on the success of your property. 

Part of this is due to reputation. Properties have reported a 44% increase in their reputation scores after fixing their parking problems. And this boost in a reputation score can trickle into several different areas, boosting not only the number of new residents, but also leading to more renewals from existing residents.

But we know you want the hard dollar amounts, so let’s talk more about some real-world outcomes that Parkade's parking management software delivers. 

So, what do the numbers say about the ROI of parking management software?

Long-term net parking revenue for stabilized buildings

Once properties implement a system to help them optimize pricing and management of long-term parking, they see immediate gains in their long-term parking revenue. The average 6-month increase in net long-term parking revenue for the cohort of 7 properties we sampled was 24%, translating into thousands of extra dollars. 

Long-term net parking revenue for lease-ups

Better parking management also empowers properties to far outperform their projected revenue from long-term parking when they’re in the lease-up phase. 

On average, properties from the cohort we sampled estimated that they would bring in $15,925 on average from long-term parking revenue per month. But thanks to Parkade helping them optimize their parking strategy, better enforce their parking rules, and keep a better record of who is parking where, the average revenue from long-term parking was $23,450 on average, which is a 47.3% increase from the estimates in their pro forma. 

Total net parking revenue for stabilized buildings

For buildings that are already at full occupancy, the average increase in parking revenue sits at 31% once they implement Parkade’s parking management solution. 

Revenue metrics for lease-ups

The best time to implement new parking management systems is at the inception of the building. Getting parking right from the beginning ensures that you are maximizing total parking revenue from day one, as well as establishing a positive reputation around parking. Many properties underestimate the revenue from long-term parking and may often leave out potential short-term parking revenue altogether. 

When a few properties we worked with during this phase were estimating parking revenue at the start of their lease-up, they estimated around $35,000 on average. But the results, since they decided to go with Parkade right from the start, blew those numbers out of the water. In reality, they were able to bring in closer to $58,000 on average, which is a 66% increase from the estimates.

Short-term parking: An opportunity

The boost in revenue continues to be apparent when you zoom out to look at short-term parking, too. Short-term guest parking can be one of the most underutilized revenue streams, and represents a huge opportunity for multi-family properties to tap into. However, it's historically been very difficult or impossible for properties to see this revenue without parking management software that automates the process.

Especially in popular areas, like city centers or near shopping malls and sporting arenas, there’s often a high demand for short-term parking. When properties put a system in place to monetize this guest parking, they can unlock hundreds or even thousands of extra dollars per month. 

Automating guest parking

Without a good system in place to manage parking, many properties often leave guest parking as a free-for-all (meaning they don’t make money from it), or if they do attempt to monetize guest parking, it turns into a massive beast to handle. 

Erica, a property manager at Thrive Properties, told us about her pre-Parkade experience with guest parking, preventing them from delivering on a key resident need: “There was no world where we were doing short-term parking by the hour or even by the day because there was just no way to manage that.”

If you have a complicated or inconvenient system for guests to reserve parking, especially one where they have to walk into the office during office hours, guests are often more likely to try to get away with not paying for parking. (And if you don’t have a great system to enforce parking, they may very well get away with it).

With the right parking system, you’re able to give guests a flexible, 24/7 solution, removing any previous barriers that may have caused them to break the rules out of convenience. 
Maximizing guest parking availability

Another way that manual parking management may stand in the way of effectively monetizing guest parking is the inability to accurately track how many spots you have available for guests to reserve in the first place. 

Taylor, the property manager at Strata and Venue, shared her experience of desperately needing more guest parking and discovering they had a full 50 more open spots than they thought. 

“We actually had way more spots that we could have used for guest parking, but we didn’t know that because of the way we were using our parking system. Not to mention, we wouldn’t have the system to leverage them without a Parkade.”

When your parking management system gives you an accurate, real-time view of available spots, you can leverage guest parking to its full capacity.

Utilizing idle parking spots

A reliable parking-management system also allows you to make the most use of every single spot available. With technology that uses smart inventory management, properties can release idle or unassigned parking spots into the system for short-term use. So spots that would have otherwise been sitting empty between leases can suddenly be leveraged as an extra revenue-generating spot in the meantime. 

Net revenue for short-term guest parking

When properties have a great system to implement paid guest parking, without putting too much strain on their staff, they immediately see a boost in revenue.

They’re able to turn an operation that was perhaps bringing in no money — or some revenue, perhaps at the expense of staff time —  into a significant revenue source with little-to-no staff involvement. 

On average, Parkade customers experience a 303% increase in their guest parking revenue after Parkade fees. And there were some properties that saw almost a 400% increase.

Opex (operational expenses) savings

When handled manually, parking management can steal hours from on-site property management teams every week. Between fielding requests or complaints from residents, tracking down parking records, walking the lot to enforce rules, handling guest parking, and manually inputting rentable items, parking can quickly balloon into one of the most time-consuming tasks for staff.

Parking management software can automate away a lot of the most tedious aspects. For example, Parkade gives residents self-service access to reserve and pay for parking (while allowing for any rule sets the property wants to enforce), provides hands-off enforcement support, and even automates gate access via the app so that teams don’t have to worry about distributing or replacing clickers. 

Properties have seen that the time teams no longer spend on parking leads to a direct decrease in operational expenses. As a result, they can redistribute those team members' time to more meaningful tasks.

On average, we’ve seen properties decrease their operational expenses by $60,000-$100,000 from savings on parking operations alone. This means that they were able to save what’s equal to a full-time employee’s salary. 

Annual NOI improvement

All of the revenue metrics mentioned up until this point have been after Parkade's fees. 

When you roll everything up together — both the increase in revenue (after fees) and the opex savings — investing in parking management software has an incredibly positive impact on annual Net Operating Income (NOI).

Whether teams are looking to calculate their property value, secure financing, make operational decisions, or pitch to investors, NOI is one of the most critical numbers to boost. 

By coming at NOI from both sides, in terms of opex savings and revenue generation, parking management technology is extremely low-hanging fruit when it comes to boosting NOI. 

At the Parkade properties we surveyed, teams saw anywhere from a $66,000 to $126,000 improvement to their net operating income from parking alone. 

While parking may not seem like it deserves to be the biggest priority for many properties, the numbers tell a different story. By investing in a proper parking solution, properties are able to significantly improve upon all of their business goals, whether it’s boosting revenue, streamlining operations, improving resident experience, or all of the above. 

About Parkade

Parkade is the #1 parking management software for multi-family buildings. With our resident-facing app and staff dashboard, parking runs itself. Your team will boost revenue, reduce time spent on parking, and improve experience for residents and guests, all without lifting a finger.

Explore our features below, built for communities just like yours.

Ready to transform parking?

Ready to optimize your parking operations and start seeing the immediate ROI?

Reach out to schedule a demo now.

What are you waiting for?