In the last blog we covered some of the differences we can expect to see with Millenials and Gen Z. In this blog we specifically at how the rental industry will be affected. You are probably wondering how quickly these changes will take place. Within the next 5-10 years the majority of how we have conducted our business for 70 years will no longer be applicable.
#1 New generations are increasingly entrepreneurs. Interiors become more important.
The newer generations will have nearly 50% of their working force as describing themselves as self-employed entrepreneurs (even part-time). Many of them will be internet based entrepreneurs that don’t have a brick and mortar office. This means that your tenants are no longer spending 50-65 hours a week working somewhere else. Interiors will thus become a priority for these new generations. Afterall, they will now spend around half of the 50 hours dedicated to a career from home.
#2 Being self-employed means newer generations will have increasing means to afford the rentals they want.
This is not to say you can arbitrarily raise rents because they can afford it. In practice it’s the exact opposite of that. This means competition will get tighter to fill your units because unlike having to go a boss and ask for a raise (and get approved) to afford something, the entrepreneur can simply sell a couple more online courses a month or take on a few more clients and meet the difference. Suddenly that other duplex on the cross side of town which is $50 more per month and has updated kitchen and bath is in the price range for more tenants. They will look it at and say “How can I afford it?” and they have many solutions to making it happen.
#3 If they can accomplish something without talking to someone that is the route they will go.
These generations want to be able to pay their bills without having to go an office, or drop something in the mail. Online payment is a necessity. Whether it be Paypal, Google Pay, etc. They want to be able to view their ledgers and contact you through the internet. Having a bookkeeping service that provides for online access for tenant is a must.
#4 Location matters…but not for work.
New generations want to be close to their stores and restaurants. This why we are seeing a trend of condo and apartment developments within man-made minitowns. (Google “The Corners of Brookfield” or Drexel Town Square” to get an understanding.) This doesn’t mean that you need to sell your duplexes and quads so you can build a development. If you understand that the newer generations want close amenities, your online listing can read “Walking distance to 3 restaurants, pharmacy, and Aldi’s.”
#5 All of this means their priorities are shifting.
When apartment searching previous generations usually followed a priority list like this:
- Location (ease of commute; proximity to job)
With the new generations it’s shifting where price is number 3 on this list and amenities and location to restaurants and retail is taking priority.
How On Can You Be Ready?
Starting making the small changes now. Don’t wait until the market requires to make the changes and you are losing ground. Get ahead of the curve and start updating your interiors. You can start with new light fixtures at the next turnover. Start researching the most economical way to introduce online portals and showing scheduling to your services. (If you are stumped on this Google “property management apps” or “property management software” and start comparing features.) Lastly, prepare your mindset. Understand that you will likely see more and more applications that are “self-employed” and likely have description lines of “Youtuber” or “social media influencer” or “freelance entrepreneur”. Remind yourself that your industry is changing and what you did previously won’t mean survival down the road. Be open to the changes and seek advice when you feel lost.