Not long ago apartment living was an accepted rite of passage — a years-long holding station between dormitory living and home-ownership. But with today’s mortgage interest rates near historic lows, lenders offering more flexible financing options than ever before and a barrage of media coverage highlighting the benefits of real estate investment, today’s twenty-somethings — Generation Y — are as likely to buy a home as they are to rent.
In essence, this generation has sent a loud and clear message to apartment owners: give us what we want or we’re gone. And what is it Gen Y wants? They want a true home in every sense of the word. They want dwellings that are dynamic and eye-grabbing, up-to-date and amenity-rich. And with more than 30 percent of apartment households under the age of 30, according to the National Multi Housing Council, adapting to meet these needs is a must. Communities that don’t will not simply struggle to reach desired occupancy levels in the short- term, they’ll be lucky to survive at all.
As you know, Gen Y covets connectivity and convenience, which is why access to state-of-the-art technology is essential to how they live. They want “instant connectivity,” the convenience of being able to communicate with anyone from anywhere at any time. This generation also values having a social component within their living environment. Work days are becoming longer, but when they do have leisure time, Gen Y wants to spend it together. They are social and outgoing, and they want to feel like a part of a greater community.
But for all that Gen Y yearns for in a home, ultimately the opportunity to own their own home trumps all others. This is understandable considering that not only are they hearing what a smart investment home-ownership is — whether true for their individual circumstances or not — but also because so many of even today’s starter homes offer premium touches like flexible floorplans, granite countertops and stainless steel appliances.
Yes, the writing is on the wall for us apartment owners. And if you haven’t seen it yet, consider this your final warning: we must improve our product in order to retain the segment of our rental population that is our bread and butter. How do we change? The answer is simple: we update our communities and we educate our potential renters. If granite and stainless steel is what is wowing the customer, then updating your communities with equally appealing countertops and appliances is a must. Think like a seller. Would adding wood flooring and upgrading the quality of the bedroom carpeting help the place pop as well? You bet.
But here’s the kicker, providing Gen Y renters with a product equally as eye-catching as a for-sale residence isn’t impressive enough. However, if you can offer equally impressive interiors and community amenities that support the Gen Y lifestyle, then you have a chance to compete.
Don’t fool yourself; simply providing hi-speed Internet doesn’t mean you’re in touch with Gen Y. Today’s apartment communities would be wise to offer cyber cafes where residents can surf the ‘Net; media centers and onsite theatre rooms where groups can enjoy movies and informal community gatherings; business centers and media rooms where community members who work remotely can hold meetings outside of their home; and onsite fitness facilities, where patrons can workout for free, negating the need for a health club membership. All three provide at least one of Gen Y’s must-haves: connectivity, convenience and a social setting.
A community Website providing online services is also critical. Your young renters anticipate that the community will be set up for direct debit from their bank account in order to pay their rent online. They also expect conveniences such as paying their utilities through your home page.
My company, RMK Management Corp., goes as far as providing a “Plan Your Space” program on its site which allows prospects to measure walls and arrange furniture virtually within a specific floor plan to determine which layout best suits their needs.
Retaining Gen Y renters involves educating them as well. More than ever before, our leasing consultants have to convince young renters that it makes more sense to rent than own. Our staffs have to “sell” the benefits of our communities. No different than before, with one exception — today’s initial sales pitch is on the phone, before a renter ever walks through the leasing office doors.
Today’s twenty-something renter has researched your community thoroughly before ever making initial contact with your office. By the time they call, they know your floor plans and what type of amenities you offer. What they don’t always know is why it’s right for them. If your leasing consultants can’t paint a clear picture of the community on the phone, if they can’t clearly communicate the inherent value of living at your community with words, your potential renter is as good as gone. We must retrain our staffs on the nuance of what sales techniques work best today, or we must do a better job in finding leasing consultants who are already in tune with this sales approach.
While Gen Y is propelling apartment owners to modify its communities, these changes are actually benefiting renters of all generations and will continue to benefit the next generation of renters as well. Gen Y has truly “upped the ante” for our industry. They have demanded more from us, and we have no choice but to respond. Those communities that haven’t reacted ought to do so now before this generation of renters and the ones thereafter disappear from your communities forever.
Author: Diana Pittro