Millennials are a huge target market for residential rental buildings. 18 to 34 years old and born between 1981 and 1997, this cohort now numbers 75.3 million, surpassing the 74.9 million baby boomers, aged 51 to 69.
Millennials form a savvy demographic. Many have sophisticated tastes, grew up having their own bedroom, frequently traveled, and are adept at recognizing quality and value. They’re also social creatures who like to gather with their peers in shared public spaces.
Not surprisingly, Millennials and technology go hand-in-hand. In fact, one real-estate developer said having access to Wi-Fi is their top priority when they look for apartments.
The good news for building owners and property managers is that many are in no rush to buy. “Once a renter, always a renter appears to be the mantra of Millennials,” says Michael Taus, author of the blog post “Marketing to Millennials: Renters By Choice” and vice president of marketing for Abodo, an apartment listing service that caters to college students and young Millennials.
We asked Taus to share his advice on marketing to Millennial consumers and retaining them as renters.
Many Millennials want to live alone after they graduate from college. Have you found that to be true in your research?
From our user base, we see a lot of students in the college demographic who want an apartment with multiple bedrooms, which helps with the economies of scale and their cost and gives them some private space. They may share an apartment but they want their own bedroom. We’ve noted this trend especially in the Southeast where many apartments are listed on a per-bed basis. When they graduate, we see searches for a subset of users who want studios and one bedrooms.
Many have seen the increase in big luxury rental buildings that have great amenities—swimming pools, fire pits, gyms, even food trucks. How does a property manager attract Millennials to a smaller, less “amenitized” building?
What I see in our portfolio of rentals is that a lot of the smaller buildings promote their locations in established neighborhoods with good access to city services like mass transportation, restaurants, and stores that the city or town offers. They may also charge less for rent.
What else besides location and price might attract them?
An apartment building that reflects a balance of community and home life. Many Millennials are used to living a mobile lifestyle, so if the building doesn’t offer every service that’s fine, as long as they can find them nearby.
And what do they want in the building itself?
Services that are similar to those they might have if they lived in a suburban home, yet which they don’t have to look or pay for. Instead, they’re provided, such as trash pickup, a feeling of security, being able to get things fixed when they’re broken, which saves time and money, and being able to have guests come visit, which means that the building is easily accessible and safe. Services have to be delivered consistently. Trash can’t pile up, for example.
If there’s an extra space in the building, it might become a small gym and not at great cost, or maybe a rooftop can be converted to a nice deck at an affordable price. Even a well-appointed lobby can become a nice feature. Maybe, you can work with a local business to provide dry cleaning pickup and delivery. The goal should be to make life easier and more pleasant for residents, so they don’t feel they’ve compromised.
Do Millennials’ technology needs mean offering Wi-Fi and high-speed internet?
Having both is important. We see a lot of interest in properties that offer Wi-Fi service throughout the community. A building may be able to offer such features through a bundled package. In fact, many renters are willing to pay a bit more in rent if they can pair their utility and TV bills.
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Do Millennials care about events where they can meet other tenants?
College students find events popular but not necessarily wine and cheese or holiday gatherings. They’d rather have a space for a volleyball court for a pick-up game or a place to grill or enjoy drinks on a summer day.
Which tactics work best when marketing to Millennials?
We’ve found that broadcast media like TV, radio, magazines, even most social channels aren’t the best since so many who read or listen aren’t searching for an apartment. We think the best strategy is to find them when they’re actually searching for an apartment. That’s why we started our company three years ago to help renters find what’s in their city and drill down to specific neighborhoods.
Renters are looking for lots of options when they search, so I would encourage property managers to get their listings into those sites that have the largest number of listings. This may seem counterintuitive because there are more properties competing for those renters. But the best renter for your property is the one that selected your location after they’ve researched everything else. Some paid listings sites like Abodo also offer free listings to smaller properties.
Once you capture a renter, how long will that person tend to stay?
Because it takes time and money to attract renters, it’s important to do all you can to keep them. Most renters find it painfully time consuming and stressful to look for another place to live. So most will stay put if they’re happy. You can improve those odds if your building is comfortable, safe, and homey.
One of the most important amenities that is also the least expensive is to create that feeling of hominess. That starts with the first time the prospective renter contacts you and arrives for a showing. Share all the best features your community and neighborhood has to offer but don’t oversell. Have them get to know tenants and interact positively.
If the residents renew, limit the increase in their monthly lease to what’s in line with similar neighborhood buildings. Many who stay will be among your best advocates by letting other Millennials know about the building.
What has surprised you most in marketing to the Millennial demographic?
Millennials witnessed the massive real estate bubble in 2008 and subsequent decline in housing values. For many that meant seeing their parents lose a lot of their net worth. What surprised me was how aware they were of what had happened, and the impact it could have on their own choices in the future.
As a result, many didn’t feel that a home offered a safe purchase. Instead, they wanted a rental that they could feel good about. This isn’t to convey social status, but simply to build the quality of life they want.
Is there anything else a property manager should share with the owner?
That Millennials are looking for community, which includes a place that offers a good quality of life with activities inside and near the building. Even if the building doesn’t have a fitness center, you can tout one close by or mention area public parks and trails. There are so many ways to put your property into the bigger picture of the features that Millennials most care about.
Which strategies have worked for you to market to and retain Millennials? Please leave a comment for your property management peers below.Read more on Marketing