A couple of property owners utilize popular strategies like offering incentives such as “free” cable to acquire desirable tenants and improve productivity. And in the past, tenants have readily paid the extra cost. Yet, as public demand for cable TV diminishes, some Palo Alto property managers start wondering if it might be time to cut the cord on their rental home’s cable TV. Let’s discuss a few pros and cons of holding or cutting your rental property’s cable TV service.
Cable on the Way Out?
According to a 2021 survey, 56% of Americans say they watch cable or satellite TV. Compare that to 76% who said the same thing in 2015. Paid TV is anticipated to lose 5.1 million customers in 2020 alone while streaming services have continued to grow. Streaming services like Netflix (75 million subscribers), Amazon Prime (50 million subscribers), and Disney+ (45 million subscribers) have turned into the primary alternatives to cable for several clients.
At the same time, however, more than half of Americans still watch or pay for cable, showing that while streaming services are incredibly popular, several still prefer cable services. In this case, before you choose to eliminate your rental property’s cable TV, it is important to ask your tenants about their wants and needs.
Time to Cut the Cord – or Not?
Including cable TV in your rental rate looks reasonable for many locations and demographics. For example, if your target renters include huge sports fans, they are more bound to need live television services and will often be willing to spend a bit more rent to have it included.
Various tenants try not to pursue signing up for cable services that will lock them into long-term contracts, given that they are doubtful about how long they will dwell in the home. They may also avoid the hassle of contacting customer service every time something goes wrong. For these tenants, a rental home ready to give cable TV provides a strong incentive to pay a little extra to avoid any inconvenience.
On the other side, younger tenants may or may not consider an offer of “free” cable worth a higher rent. And recent survey data backs this up. For instance, 81% of Americans age 65 and older say they still have cable service, while only 34% of American age 18 to 29 do. Streaming services are becoming the go-to choice for some who find cable TV lacking viewing options. While streaming services demand money, numerous young people will share a subscription or sign up selectively to save money. Streaming services offer these consumers the freedom to decide when to sign up or cancel if they want.
Property owners frequently have valid reasons to include cable TV as part of the rent. For instance, internet providers will often bundle internet service and cable TV, lowering the cost of both. Providing internet service and cable TV for specific places and demographics may grant property owners a competitive edge. The simplest way of finding out if offering cable TV is a smart idea for you is to ask your tenants. They can explain better than anyone what the expectations are and how tenants may adjust to including “free” cable TV.
If you have talked with your tenants and discovered that they don’t need cable TV, it may be possible to discontinue your cable service temporarily while leaving the cables intact. Depending on the service provider, you may be able to suspend or even cancel service fairly easily, saving you the expense of paying for it each month. After that, you can either charge a little lower rent or pocket the savings.
Deciding whether to keep cable TV service at your Palo Alto rentals is a tough call. Imagine life if you employed Real Property Management Silicon Valley to manage your portfolio and make those complicated decisions for you, all while you enjoy passive income! Contact us online to learn more.
Originally published on Nov 1, 2019
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