There are rapid changes occurring in multifamily housing that have been cause for comment by tenants and property managers alike. Such changes are completely restructuring the look of a multifamily apartment and altering consumer demand.
If you’re a property manager, it behooves you to stay on top of the most critical trends going on in the rental marketplace, in addition to your property management basics. Responding to shifts in demand will not only help you bring in higher quality tenants but will also aid you in resident retention. To that end, this article will take a look at the most common apartment trends like the growing need for an apartment package delivery system and provide suggestions for how you should respond to them.
Keep reading to discover more!
Multifamily Apartment Trends You Should Watch For
Shifting Renter Demographics
Before you can dive in, it’s critical to note that your average renter demographic has been steadily shifting younger and younger. Now, millennials make up the largest percentage of apartment renters. This younger generation has different preferences and behaviors than previous generations of renters, which means that you need to respond to such things or you risk losing them as potential clients.
According to Business Insider, two key takeaways from this shifting rental demographics are:
- Millennials are not only renting for longer than ever, but a significant plurality prefer to rent over buying.
- Millennials want to rent an apartment that can offer all the ease and luxury of a home.
This latter point drives us to the next trend.
Renters Want Amenities
An apartment used to just be a place where you slept and lived until you could afford a house. Now, young people, in particular, desire living in a multifamily apartment that can offer a variety of services and conveniences all geared to making their lives easier or more enjoyable. In that regard, Multifamily Executive had this to say about this building trend, “In recent years, mixed-use developments have thrived as a result of evolving lifestyle preferences among today’s renters. Whether in an urban-core setting or a suburban town-center design, young and old generations alike are seeking more-active, -social, and -walkable lifestyles with short commutes and proximity to leisure activities.”
Apartment renters have demonstrated that they are willing to pay more for the luxury of having an all-in-one living experience. An Entrata study on the matter surveyed residents and asked them what they would pay a premium for. In order, their answers were as follows:
- High-speed internet and/or cable TV
- In-unit washers and dryers
- Online rent payments
- Secure access to the property
- Gym/fitness center
- Smart home features (keyless entry, smart thermostat, digital doorbell)
- Video surveillance
- On-site childcare
- Automated maintenance request system
There’s a Logjam in The Mailroom
If your unit even has a mailroom, odds are it wasn’t made with Amazon’s overnight delivery service in mind, which in 2017 shipped more than 5,000,000,000 packages. This has resulted in a capacity crunch for many multifamily apartments, forcing property managers to spend hours of each day accepting, sorting, storing, and delivering packages to residents. In addition, it has led to increased problems with package theft or damage, particularly if the packages are left in the open.
This trend won’t change any time soon. Consequently, it may be wise to consider alternative solutions such as those provided by Parcel Pending. For those looking for any property management tools to help with this growing issue, the technology of these smart lockers serves as the ultimate package theft deterrent and it makes package management easy, ensuring secure delivery and retrieval of packages. For multifamily units the benefits are manifold, but two particular pros worth noting are:
- Increased resident satisfaction and renewals, providing them with the ease of mind that their items are safe and can be retrieved whenever they feel like doing so.
- Reduced operational costs, eliminating hours of time you otherwise would have wasted on handling packages.
There’s a Slowdown in New Units
Despite previous predictions, it doesn’t appear as if apartment growth will continue to follow the record-setting pace it’s charted over the previous half-decade. According to Real Page, “After five years of record supply volumes, the nation’s apartment market seems to have plateaued. Roughly 320,000 units are scheduled for completion in 2018, boosting the existing base by 1.8%. These make up the biggest annual supply volume the country has seen in 30 years. Next year should be much of the same, with deliveries averaging around 320,000 units annually. After that, supply is expected to fade, but not by much. Annual deliveries aren’t scheduled to fall back down to the 300,000-unit mark until 2020.”
Naturally, this posed a concern for apartment managers. Increased supply would result in lowered prices and increased competition—making it harder to both entice new residents and retain current ones. However, it appears as if these fears were greatly overstated and that the rental market will remain strong.
Heeding the Trends
Should you wish to continue to run a successful multifamily apartment, it’s essential that you pay attention to current apartment trends and respond accordingly. Simple steps such as preventing the logjam in the mailroom by installing smart lockers demonstrate to current and future residents that you are mindful of their wants and needs. Therefore, create an open line of communication between you and your tenants and be open to making changes when necessary. Doing so will ensure that your apartment complex continues to thrive and the future of property management will be a lot smoother.
Hoffower, H. Business Insider. Millennials aren’t buying homes, and it might not be because they can’t afford them: Some actually prefer to rent instead. (2019). https://www.businessinsider.com/millennials-renting-homes-instead-of-buying-2019-7
Doyle, D. Multifamily Executive. 4 Multifamily Development Trends to Watch in 2019. (2018). https://www.multifamilyexecutive.com/business-finance/business-trends/4-multifamily-development-trends-to-watch-in-2019_o
Entrata. What Apartment Renters Actually Value. (2019). http://info.entrata.com/newsletters/case_studies/Amenities/rentersvalues.pdf
Carman, A. The Verge. Amazon shipped over 5 billion items worldwide through Prime in 2017. (2018). https://www.theverge.com/2018/1/2/16841786/amazon-prime-2017-users-ship-five-billion
O’Brien, K. Real Page. U.S Apartment Supply Volumes Plateau. (2018). https://www.realpage.com/analytics/us-apartment-supply-volumes-plateau/