There has certainly been a fair amount of uncertainty surrounding multifamily development recently. But, no matter the economic conditions of the world, successful real estate properties will always benefit from a trio of advantages accompanying amenities: increased leads, revenue, and retention.
The right apartment amenities will always be a draw to potential tenants. They’ll lead to higher occupancy rates and justify higher rents. Additionally, community amenities create the opportunity for residents to connect with each other and build friendships – a major reason renters decide to renew their leases.
The Changing Demographics of Apartment Residents
As Millennials start families, buy houses, and move to the suburbs, Generation Z is taking over the rental market. While these generations do share much in common, it’s important that you do not assume they are the same.
Successful multifamily developments will be the ones that can provide Generation Z with the things they want, at the speed at which they want them. Because Generation Z was the first generation to grow up during a time when the internet and smartphones were commonplace, Generation Z expects instant gratification. They embrace quick change and have strong opinions.
Catering to the needs and wants of the rising generation may be a challenge, especially for conservative ownership groups and developers who resist pushing the envelope on their projects. Before you give in to the pressure to stick with the status quo, consider the following insights about the future of multifamily apartment amenities.
Boost Online Presence to Increase Leads
Potential Generation Z tenants are more likely to scope out apartment homes online before visiting your property in person. Because of this, your property is going to need a better online presence.
The property management groups that have embraced virtual tours and online leasing during the pandemic can leverage these new capabilities to attract Gen Z tenants. How well do your amenity spaces shine in photos and videos? Are they well designed? Are they clean and well maintained?
Generation Z will be even more impressed by your social media presence in particular. They will be more likely to rent at an apartment community that is tagged or featured in Instagram posts or promoted by their favorite influencer. Do your residents love the amenity spaces at your property enough to post about them on their social media accounts? Are your outdoor spaces beautiful enough to be the setting of major life events such as weddings or birthday parties?
You will have countless leads if you can cater to the tech-savvy Generation Z. Create some buzz online and you’ll create demand among their generation.
Provide Practical Convenience to Drive Revenue
Generation Z is entering the market with a focus on personal finance. Having witnessed their Generation X parents lose savings quickly during the Great Recession, Generation Z decisions are very financially-driven. While Millennials strongly desire to work in their dream job, Generation Z is more likely to accept a job with a better paycheck.
When it comes to apartments, Millennials seek communities that reflect their values and treat them like people. They can be extremely loyal to their favorite companies, giving and reacting positively to genuine, honest reviews. Once you have the support of Millennial consumers, they are more than willing to spend money on the things they believe in. That is why properties with an emphasis on creating compelling stories about their community have found a lot of success with Millennials.
Generation Z, however, are projected to be more skeptical. They quickly change their mind about things. These tendencies make marketing to Generation Z more complicated. But, because of their competitive nature, Generation Z’ers feel they must act quickly to beat others to the punch. Appeal to their competitive side by demonstrating that your property provides the highest quality of living at the best value.
Amenities that make your tenants’ lives easier will be very popular among Generation Z. This includes saving them money on things like transportation, gym memberships, office space, and internet. They will be attracted to the instant convenience and practical finance-related advantages of on-site amenities – and they’ll be willing to pay a premium for it. You can even capture additional revenue streams by renting out these on-site amenities to an operator.
Because they are more risk-averse when it comes to finances, Generation Z favors smaller units as a more affordable alternative to larger, luxury floor plans. This provides a great opportunity for developers to increase revenue with a higher unit count, and also opens up more space for community amenities.
Build Community to Increase Retention
Younger buyers are more interested in the experiences that they are going to have at their apartment than the specific, concrete amenities. Like Millennials, Gen Z consumers prefer experiences over products.
Because the best amenities are experiences, the deal-clinching sales walk-throughs are going to focus more and more on community programs and events.
How your tenants interact with other residents is the most important driver of retention. As people make friendships and memories together (whether at a community bbq, weekly yoga class, or even working next to each other in the apartment co-working space) they will be far more likely to stick around.
The Impact of Amenity Design
In order to make sure you have amenities that will make your project stand out to the rising generation, it is important to have the right design approach. Partner with an amenity design specialist and they will help guide you toward the right solutions for your marketing strategy.
For a successful project, stay committed to providing quality experiences throughout your tenant interactions. Developers and property managers who genuinely want to provide the best products and services to Generation Z will have great success.