With spring almost upon us, the real estate market readies for a busy season as leases end and Americans enter back into the rental market. How can property managers ensure they’re competitive, filling vacancies and giving prospects what they want in the apartment search?
AppFolio conducted a survey to uncover what‘s top of mind for today’s renters and what trends modern property managers need to adopt to meet their expectations. As an industry with one of the slowest adoption rates of technology, renters are keen to the tech trend, and online convenience can make or break a signed lease. Property managers need to be thinking about the impact and opportunities of technology to fill vacancies and remain competitive.
All Things Digital, Please
With more and more consumers renting versus buying a home, the rental market has become increasingly crowded. So how can property managers adequately market their available listings? Time to get everything online, folks! Among current renters, nearly one-third (29 percent) say they found the rental listing for their current residence online (via a classified ad or an online service). This trumps traditional methods such as finding a rental listing via word of mouth (23 percent—still a relatively big influence) or through a realtor (nine percent).
This indicates the importance of a digital presence during the listing process and, with traditional word of mouth remaining prominent, the importance of satisfied residents. This is achieved through fast response and maintenance, good upkeep of the property and an overall quality of services so that tenants will refer others to vacant units—all of which today’s modern property manager can boost through technology.
Now let’s take it one step further. Today’s renters are not only finding rental listings online, but they’re also attracted to digital conveniences in deciding which rental to move into next. From paying rent to reporting a maintenance issue, renters want to be able to do apartment tasks from their phone, iPad or computer, whether on-the-go or sitting on the couch. The majority of tenants (46 percent) prefer to pay their rent digitally—through an app, website or automatic withdrawal. Mailing a check or dropping off cash is now old school; after all, this is the digital age. If your property management company can offer these types of digital services, you’ll have a higher chance of attracting more lessees.
Virtual Assets are Key
Nearly a quarter of renters eliminate a property from their search if photos or videos of the property are unavailable. Bad reviews (of the property itself or of the property manager) are also a deterrent, with 27 percent of respondents choosing this as the top reason for eliminating a property from their search.
Bottom line: make sure to highlight your property’s value online. Don’t be shy; be transparent and show off the space.
Millennials Expect—and Are Willing—to Pay More
Surprisingly, millennials are least sensitive to price as this demographic’s expectations have been modified by the current market. Of the total respondents that cite rent being more than they want to pay as the top reason for eliminating a property from the search, only 28 percent are age 18-34. Adults age 55-64 are most sensitive to price, with 45 percent selecting it as the top determining factor. Pay attention to this market property managers—since the rental market is going gray.
Top U.S. cities such as San Francisco, Boston, and NYC are known for making residents “rent poor.” It must be true, as 32 percent of respondents said half or more of their monthly income goes toward rent. This is another reason to satisfy your residents! If they’re going to spend a large portion on rent and have an abundance of apartments to choose from, things like property upkeep and offering digital conveniences will keep current tenants happy, increase the likelihood of re-signed leases and attract new tenants.
The findings highlighted above are critical for property managers everywhere, whether you’re city or small town, 10 units or 100.
AppFolio Rental Market Survey Methodology
Commissioned survey of U.S. consumers conducted in January 2016 via Google Consumer Surveys. The survey collected responses from a representative sample of 1,500 total consumers. AppFolio was the sole investor in the study and the survey population is made up of a mix of U.S.-based consumers aged 18 and older.
AppFolio Rental Market Survey Data Points:
- How did you find your current residence rental listing?
- Word of mouth (23.8%)
- Classified ad (15.3%)
- Online service (14.3%)
- Realtor (9.3%)
- Mobile App (3.4%)
- Assume that rent is not an issue. Which of the following would cause you to eliminate a property from your search?
- Property rent is more than I want to pay (31.5%)
- Lack of photos or videos of the property (24%)
- Quality of property’s amenities (18%)
- Property itself has poor reviews online (13.9%)
- Property manager has poor reviews online (12.6%)
- Age Breakdown: people who picked property rent is more than I want to pay:
- 18-24 (27.9%)
- 25-34 (28%)
- 35-44 (29.1%)
- 45-54 (30.2%)
- 55-64 (45.4%)
- 65+ (42.8%)
- Approximately what proportion of your monthly income goes towards rent?
- Less than 1/4 of monthly income (19.7%)
- 1/4 of monthly income (21.4%)
- 1/3 of monthly income (25.7%)
- 1/2 of monthly income (18.3%)
- More than 1/2 of monthly income (14.9%)
- Which of the following methods would you most prefer to use for paying rent each month?
- Pay through an app or website (28.5%)
- Deliver a check (21.6%)
- Mail a check (18.1%)
- Automatic withdrawal (17%)
- Cash (14.8%)