“What am I actually paying for?” If your community charges for parking, you’ve probably heard that question more than once. Here’s the best answer: parking revenue does the most good where residents can see it. Two uses stand out. The first is upgrading the amenities residents use every day, starting with the parking lot itself. The second is renewal incentives, where a free parking permit can do the job of a rent concession without lowering the rent on the lease.
This post covers what to do with parking income once it starts coming in. If you’re still deciding whether to charge for parking at all, start with our guide to generating parking revenue without raising rent.
Key takeaways
- A parking fee is easier to explain when residents can see what it pays for and the benefits it’s providing them.
- Start with upgrades to the parking experience itself, such as lighting, signs, striping, and EV charging, then move on to shared amenities and resident events.
- Budget parking revenue as a monthly line that grows as residents turn over, not as a lump sum.
- A free parking permit can work as an off-book concession. It rewards a renewal without lowering the rent on the lease.
- Every dollar spent on amenities is a dollar not added to NOI. Agree on the split with ownership up front.
Why put parking revenue where residents can see it?
Many multifamily markets are already fee-heavy. Your residents read their lease breakdown line by line. Rent. Trash. Pest control. Technology. Utilities. And now parking.
Every new line raises the same question: what am I getting for this?
A parking program answers part of that on its own. Residents get a reliable place to park, guests can register from a phone, and the lot isn’t full of cars that don’t belong there.
Spending some of the revenue on something residents can see answers the rest. “Another fee” becomes “the fee that paid for the new lights in the lot.” or “the fee that funded our pool party.”
That’s exactly what happened at Arden at Corinth, a 296-unit community in Texas. Since launching ParkM, the community manager has seen resident complaints go down and gained “an additional source of income each month.” Parking revenue was also a significant contributor to a recent community pool party. You can read the full story of how a 296-unit apartment community took control of parking.
Which amenities can parking revenue pay for?
Your property decides. But order matters. Improve what residents are paying for first, then spread the benefit wider.
Start with the parking experience itself
Residents who pay to park notice the lot. Upgrades here tie the fee directly to what it buys.
- Brighter lighting in the lot and along the walkways to each building
- Clear, current signs and fresh striping, including restriping where larger vehicles keep straddling compact spaces
- EV charging, which some residents will pay a premium to use (our guide to adding EV charging spaces covers the planning)
- Carports or covered parking, which you can then offer as premium spaces
- Bike storage for residents who would rather not keep a second car
Then shared amenities and events
- Dog parks and pet stations
- Package rooms or lockers
- A refresh for the pool, courtyard, or fitness room
- Resident events, like a pool party, holiday party, or end of summer bash.
Match your spending to your income. Parking revenue arrives every month, so it’s a good fit for recurring costs (events, upkeep, charger maintenance) and for upgrades you can pay off over a few months. A large capital project will usually need more than parking revenue alone. Be upfront about that. It’s better than promising residents something the program can’t fund.
How do you budget parking revenue for amenities?
Treat parking as a monthly line, because that is how it arrives. ParkM pays the property its share every month, by check or ACH. The property manager portal breaks revenue down by permit type, so you can see which permits are earning revenue.
Here’s a simple way to plan it:
- Average the property’s share over the last few monthly payouts.
- Multiply by 12 for the annual figure.
- Agree with ownership on how much goes to NOI and how much goes back to residents.
- Put the resident share against a short list of upgrades, in priority order.
- Review the list each quarter as the revenue grows.
Plan for the initial launch. If you grandfathered existing residents at launch, they park free until their lease renews. Paid permits build up with each new move-in and guest permits. At a stabilized community with low turnover, that can take a while. So fund upgrades in the order the revenue arrives. Don’t promise everything on day one.
Can parking permits be used as a renewal concession?
Yes. And it’s one of the most underused tools in a renewal conversation. With ParkM, permits can be used as off-book concessions.
What is an off-book concession?
A concession is anything a property gives up to win a lease or a renewal. The familiar version of this is a rent concession, like a free month or a discount on monthly rent. It works. But it lowers the number on the lease, and that number carries into the next renewal and into your property’s rent figures.
An off-book concession gives the resident something of real value without touching the rent.
Why a free parking permit works as a concession
For a resident who pays for a permit, a year of free parking means money back every month on something they already use every day. For your property, it has three advantages over a rent discount.
- The lease rate stays the same.
- It applies to one unit for a set period, so it doesn’t set a precedent for the whole building.
- It rewards the resident you’re trying to keep, instead of discounting rent for everyone.
The only cost to your property is the parking revenue that unit would have paid for that period. Not a cut in rent.
How to set one up with ParkM
It takes one email. Tell ParkM support which unit is getting a free permit and for how long (for example, a year to close a renewal), and ParkM takes care of the rest.
One thing to check first: a grandfathered resident already parks for free. For them, the concession needs to be something else, like a permit for a second vehicle, a reserved space, or a covered space.
Should parking revenue go to amenities or to NOI?
That’s the owner’s call. Make it on purpose, not by default.
- Revenue kept as NOI raises the property’s value at the cap rate. For an asset manager, or an owner preparing to sell, that is the point of an ancillary line. Our guide to generating parking revenue includes a worksheet for running that arithmetic on your own numbers.
- Revenue spent on residents protects occupancy and renewals. A free permit that keeps a unit from turning over can be worth more than the parking revenue it gives up, once you count vacant days, turn costs, and your leasing team’s time.
- A split often makes sense: most of it to NOI, a set share to resident-facing upgrades, and free permits used case by case at renewal.
Whichever you choose, write it down. If a regional manager asks, “Where does the parking money go?” they should get the same answer as the property manager.
How should you tell residents where the money goes?
How you communicate it matters as much as what you spend it on.
- Say it at launch. When you announce paid parking, tell residents what it will fund.
- Name it when it lands. “The new lot lighting was paid for by parking permits” is one line in your resident newsletter.
- Bring it up at move-in. At most properties, parking is discussed during move-in, so new residents know how the program works before it becomes an issue.
- Keep enforcement fair. Residents trust a fee that’s applied the same way to everyone. Our post on the hidden cost of apartment parking complaints explains why consistency matters so much.
It also helps that your leasing office isn’t the help desk for the new program. ParkM answers resident and guest permit questions directly, so your team can focus on the upgrades instead of explaining the fee. For more on what residents value, see what residents actually want from apartment parking, and for the tools that serve them, ParkM’s resident parking solutions.
Frequently asked questions
Can parking revenue be used to pay for amenities?
Yes. Your property’s share of parking revenue is its income, and your property decides how to use it. A common approach is to put part of it into upgrades residents notice, starting with the lot itself (lighting, signs, striping, EV charging), then shared amenities and resident events.
Can a parking permit be used as a concession?
Yes. With ParkM, your property can give a unit a free permit for a set period, for example, a year to close a renewal. It works as an off-book concession. The resident saves money every month, and the lease rent stays the same.
Do residents have to pay for parking to fund upgrades?
Not all of them. Many properties grandfather existing residents, who keep parking free, and charge new move-ins. The revenue, and the upgrades it pays for, grow as residents turn over.
What does a parking program cost the property?
Nothing, with ParkM. There is no setup cost and no monthly billing to the property. The vehicle owner pays for the permit, and ParkM shares that revenue with the property.
If you want to see what parking revenue could fund at your community, book a demo and a ParkM parking expert will walk through your lot, your permit types, and how the revenue would reach you. You can also read more about ParkM’s parking management solutions for property managers and the benefits of apartment parking management software.
