Making an Emotional Connection with Multifamily Residents
The purpose and reason for the apartment industry is changing. Historically, renting has been either viewed as a transitional step toward homeownership or a necessary choice if ownership was not possible. Two generational groups, millennials and aging baby boomers, are changing the multifamily landscape by making apartment living a lifestyle choice, rather than a necessity.
Modern renters are choosing the communal lifestyle that apartment living offers and, even if they are not financially invested in a property long-term, they are emotionally invested before they even sign a lease. In a recent study by Zillow, 82 percent of renters, and 86 percent of those with children, need to take an in-person tour to get a feel for their potential home and the community. Many renters also want to meet the management team in person and have the opportunity to make a personal connection with the community’s staff.
The apartment industry is changing, and quickly, and it is imperative that developers, property owners and operators, and leasing consultants respond with a personalized emotional connection to reach and retain renters.
Marketplace Soars as Demand Purpose Shifts
As renters have shifted the purpose and reason for apartment living, demand for new multifamily communities has soared. The opportunity to respond to renter’s need for a homelike community begins at the design stage, and developers not only need to build apartments at all price points, they must also consider how a community offers renters an emotional connection to layouts, features, and amenities.
Increase in demand continues to create a boost in the multifamily marketplace. Millenials and baby boomers are both a driving force in the marketplace boost: as each generation ages, the demand for their lifestyle choices increase. From 2012 to 2016, an average of 225,000 new apartments were completed per year, according to NMHC/NAA. In order to keep up with demand, developers must supply an 325,000 apartments a year from 2018 to the end to 2030.
Community and Connection
Marketplace demand has not only soared; the multifamily development process now relies on how the industry responds to why and how renters choose an apartment. Renters want an emotional connection, whether it be for a year or 10 years, to an apartment community. It’s up to the industry to create opportunities for them to do so. According to Zillow, the continued decline of homeownership rates keeps a wide range of renters in the market for at least one year. However, 55 percent of long-term renters plan to find a new rental if they move within a one to three year window. The need for an emotional connection does not change, even if the address does.
What do these opportunities look like? At the design stage, developers are encouraged to create a homelike atmosphere where residents can feel settled and have space to entertain. During lease-up, it’s important to not just market amenities and features, but the lifestyle experience and benefits that a space offers. What does a vibrant, thriving community look like for your ideal potential residents? The key to attracting long-term residents is to provide opportunities for emotional investment in a space where they can create a home.
Attract the Ideal Resident
While studies have shown that a renter’s emotional connection with an apartment may not lead to long term residence, there is still cause for appealing to current residents and focusing on retention. Renewals make-up 50 percent of residents, but many property managers and leasing consultants primarily invest in marketing to new residents. One way to increase potential renewals is to shift from traditional marketing platforms to modern practices focused on hyper-personalized targeting to qualified leads.
By attracting the right resident at the right time, you have the opportunity to build a community of long-term residents who value the community and will accept new renewals and/or rent increases. Lower resident turnover will also decrease the negative cost of move-outs, including lost rental income for vacant apartments, maintenance, leasing fees, commissions, and advertising. Residents with longer customer lifetime value (CLV) will boost your profits, reduce resident turnover, and increase NOI.
How G5 Can Help
The lifestyle choice that an apartment community offers continues to become the better living option for a growing population. Partnering with new residents as they build a home and emotionally invest in your community is paramount to this lifestyle choice. When you collaborate with a team of real estate marketing experts, you will have access to the latest marketing technology that will help you attract the right residents, analyze lead generation data, and create lasting relationships that will increase your profits and lower marketing costs.
To learn more about how you can proactively reduce resident turnover, check out our latest webinar recording with SatisFacts and ApartmentRatings.com, The Secret to Resident Retention and Your Reputation.