Part 2 of our series on millennial renters shares tips for investing in features and amenities that win over the generation most likely to rent.
Often called the “renter generation,” millennials (defined by Pew as those born after 1980) are choosing leases over mortgages at far greater rates than the baby boomers and gen-Xers before them. By certain estimates, the overall homeownership rate will fall to just 60.8 percent by 2025, the lowest since the mid-1950s. Wisely, multifamily developers and owners are racing to attract and retain millennials as the core market of renters shifts to this new generation.
But to be successful in winning over the wave of millennial consumers and their buying power, multifamily operators must invest in features and amenities that provide meaningful value to younger renters. Relying on clichés like ping pong tables in common areas isn’t going to satisfy this street-smart crowd who tend to see through traditional marketing tools such as advertising — 84% of millennials report that online input (such as reviews/ratings) and social media influence their purchases.
So to help you get started, we’ve gathered suggestions about the features and amenities multifamily operators can invest in to create value for this target market.
First things first: Know your market
Location, while not an amenity per se, is often a nonnegotiable for millennials who tend to choose housing in areas featuring walkability, access to transportation, and proximity to bars, shopping, restaurants and outdoor activities. If these neighborhood characteristics don’t mesh with your community’s location, it’s worth examining your approach to marketing and outreach.
Your property doesn’t have to be in downtown Boston for a fair chance at attracting millennial renters. What many millennials dislike is not the suburbs in themselves, but the sprawl associated with them. A blend of urban amenities, like those mentioned, with suburban characteristics such as open spaces and more reasonable cost of living can be an effective draw for value-conscious millennial renters.
You might be surprised to learn that according to a CBRE report: In 2014, 529,000 people between the ages of 25 and 29 moved from cities to the suburbs, while only 426,000 moved in the opposite direction. For younger Millennials 20 to 24 years old, the flow’s direction was even more pronounced, with 721,000 moving out of cities for the suburbs and 554,000 leaving the suburbs to pursue life in the city.
Embrace the digital landscape
Millennials are the first group history can classify as digital natives. Signing and mailing a check to pay rent or placing a phone call to request maintenance is — if not completely alien to them — a nuisance. The more self-service apps multifamily communities can provide, the better. In addition to rent and maintenance portals, investing in automatic package delivery notification systems and community portals where residents can connect goes a long way with a generation that does everything online.
High-speed internet access is unsurprisingly ranked as one of the most important features for apartment living. Close to 34% of respondents in a survey commissioned by Comcast’s Xfinity Communities ranked Wi-Fi access as the most important feature for apartment living. But as renters continue to connect more and more devices to networks, the day is coming soon when regular broadband internet may not be enough to handle the increased load. If gigabit connectivity is available in your area, consider making this available to renters, particularly for new developments. Even if it’s more capacity than you think your renters need right now, the investment now will future-proof a community for years to come.
Create Community Spaces
Despite the popular notion that millennials spend their whole lives behind a screen, or perhaps because of the nature of their digitally-immersed lives, millennials value face-to-face socializing. Holding casual, low commitment events—think craft beer tasting or movie night—can help form a sense of community in multifamily developments, and in turn can help reduce turnover. Investing in well-outfitted, well-maintained community spaces like pools, study lounges, outdoor patios and gyms can also increase millennial satisfaction.
It’s all about the upgrades
Though millennials may choose to rent for a longer portion of their lives, that doesn’t stop them from wanting more out of their living spaces. An overwhelming 86% of millennial renters say they would pay more for a “smart” apartment, compared to only 65% of Baby Boomers. Amenities like keyless entry, home security/monitoring systems, smart thermostats, and smart lighting are all extras that millennials are likely to appreciate, so if you’re looking to set your community apart, these kinds of tech-driven upgrades can be a great investment.
Who let the dogs in?
It’s not just a stereotype: statistically, millennials really do love their animals. One survey found that 75% of millennial renters own a pet. And as more and more businesses and offices become pet-friendly, millennials expect that they can take their pets pretty much anywhere. Of course, many apartment owners are wary of pets, due to the increased risk of damage and the general wear-and-tear. But with a focus on detailed inspections before and after a pet-owning renter leases a space, it becomes easier to precisely pinpoint damage and put deposits to their intended use. Ultimately, however you might be able to facilitate pets at your properties might help you get millennial renters through the door.
Online reputation matters
Carefully-chosen amenities will only attract millennial renters if they’re aware of your offerings. Millennials do their homework before they rent, so getting millennials to see your community as a potential home starts online. NMHC reports that more than 75% of renters were influenced by online review sites. And the bad can often be more persuasive than the good: Negative reviews, the study found, stopped potential renters from even visiting a community. It’s important to take some time to really understand your online presence, what people are saying, and how you want to respond to them.
Property conditions are tied to resident satisfaction, so implementing weekly, even daily inspections for amenities that millennials will praise or complain about, like pools, and having access to that reporting in real-time across every community you manage is key to upholding your online reputation. Keep information updated regularly and maintain an active presence on review sites such as Yelp and Nextdoor. To millennials, this kind of online engagement shows them you care about and take pride in your community.
Millennials are on mobile.
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