The demand for multifamily housing is expected to remain very strong heading into 2020 thanks to population growth, increasing challenges to homeownership, and a growing preference for renting, according to GlobeSt.com. To meet the demands of these additional 1 million renter households per year, multifamily housing providers need to keep close to their customers’ preferences, staying ahead of the competition by attracting and retaining more renters to the communities they manage.
To learn what renters care about most, the best way to find out is to ask them directly — and that’s just what the latest report by NMHC and Kingsley Associates has done. At the 2019 NMHC OPTECH conference, they recently released fascinating new research on the preferences of apartment dwellers heading into the new year.
The 2020 NMHC/Kingsley Apartment Resident Preferences Report surveyed over a quarter million multifamily renters in the U.S. to reveal the apartment and community features that they value most, which ones they won’t rent without, and how the latest trends will affect their decisions about where to rent in 2020.
As you prepare your business strategy for growth next year, here are six of the biggest factors revealed in the report that matter most to your renters.
Although many of the features and amenities mentioned in the report carry costs that may drive up rent prices, affordability remains a major concern for many renters. In fact, seeking lower rent was the number one reason why renters planned on moving to a different apartment community, at 47%.
According to John Burns Real Estate Consulting, affordability is currently a major concern for renters due to market overvaluation in many metros: “As rental rates continue to rise nationwide, rental affordability has become a big concern and the need for affordable rental options has never been greater. Our Burns Intrinsic Apartment Rent Index, which measures apartment rent valuation based on the long-term median ratio of rents to incomes, suggests that about half of the major markets in the country are overvalued by more than 5% and many by 10%+.”
Depending on location and the property classes included in your portfolio, a greater emphasis on affordability over amenities may pay off in the coming year.
2. Quality of Management
For renters, the quality of their rental experience goes beyond just the unit they occupy. Dissatisfaction with the quality of management at the community where they live was the second most common reason residents gave for moving to a different apartment community, with 31% citing this as the reason for their move.
Improving the resident experience is a cost effective way to attract and retain more renters, since it involves changing your company’s practices rather than investing additional capital into apartment or community upgrades.
Start by listening to renters’ needs by gathering feedback via surveys and reviews. Identify common threads mentioned by renters and focus on making process changes that will prevent similar issues in the future.
Be sure to keep your online reputation in mind as well. 72% of renters in the survey said that they visited an apartment listing site when searching for their apartment. Out of those renters, 79% said that the content of ratings and reviews actually stopped them from visiting one or more communities, and 85% said that this content influenced their leasing decisions.
Residents who leave negative reviews on these sites typically expect a response, and a well-written response can help preserve your brand reputation in the eyes of prospective renters as well. Keep an eye on your rankings on these sites as well – a 3.5 star rating or below will typically turn away prospective renters.
To improve the experience that you offer to your multifamily residents, take a look at our guide, “How to Deliver Excellent Service to Residents in the On-Demand Economy.”
3. Convenient In-Unit Amenities
When considering which in-unit amenities to add, it always makes sense to keep the focus on amenities that have a relatively low cost to implement, but a high perceived value for renters. Renters place a high value on apartment features that allow greater convenience in their day-to-day lives.
For example, 92% of residents expressed interest in a garbage disposal, and 56% said they would not rent without it. Since this is fairly inexpensive addition that will also help avoid costly plumbing repairs, why not invest during 2020?
In-unit washers and dryers are another convenient apartment feature that renters highly prioritize. 91% of renters are interested in having this feature, and 55% would not rent without it.
90% of residents are interested in a dishwasher, and 63% of renters would not rent without one. Likewise, 86% expressed interest in a microwave and 47% would not rent without it. Considering the relatively low cost of offering a microwave, especially a countertop unit, this particular appliance would make a great resident welcome gift.
Which other inexpensive amenities also have a high perceived value? In-wall USB ports have nearly the same perceived value as smart thermostats with 76% of residents interested, but are much cheaper. Likewise, 61% of residents are interested in TV wall mounts, which are very inexpensive to add to your units . By installing these on behalf of your renters, you can also ensure they are installed correctly rather than risking damage or injury when renters attempt to self-install.
In today’s connected, online age, it’s no surprise that residents prioritize living in communities where they can easily access the outside world via multiple connected devices.
The number one community amenity that residents expressed interest in is reliable cell reception. 91% of all renters said this was important, or very important in their decision to rent. 44% of renters would not rent without reliable cell service.
Many residents go so far as to check the quality of the cell phone service at a community during their tour before renting — 47% of all renters said they checked the connectivity of their mobile phone while touring communities.
High-speed internet access is likewise a top priority for renters. In 4th place as a most highly ranked apartment feature, 92% of residents expressed interest in high-speed internet, while 48% would not rent without it.
In addition to the prevalence of remote work, another explanation for the high priority renters place on connectivity is the popularity of online streaming services for home entertainment. 64% of renters currently get their entertainment at home from streaming services, while only 43% have cable, only 5% have an HD antenna, and only 4% satellite.
5. Secure Package Delivery
The rise of e-commerce has also led to an increased demand for secure package delivery options at residential communities. The recently released Pitney Bowes Parcel Volume Index shows steady growth in the number of packages delivered, with 2020 expected to top 100 billion packages delivered worldwide.
As residents receive more packages than ever before, it’s no surprise that 84% of residents expressed an interest in secure, self-service 24/7 package access as a top community amenity.
Out of those with this preference, 76% are in favor of package lockers for self-service pickup, as opposed to only 10% who would prefer a package room for pickup.
The number of packages that residents receive each month is also increasing, with 39% receiving on average 1-2 packages per month, and 34% receiving 3-5. 21% of residents receive 6 or more packages per month.
6. Mobile Access to Resident Portal
In light of residents’ growing prioritization of constant mobile connectivity, it makes sense that this preference extends to residents’ expectations for interacting with management at their communities. Overall, 81% of all residents said that it is important or very important for them to be able to access their resident portal from a mobile device. 64% signed their current lease online in some way, and given the choice, 58% of renters would rather pay rent using a resident portal mobile app than a property website via laptop/desktop.
To learn more about the 2020 NMHC/Kingsley Apartment Resident Preferences Report, visit the National Multifamily Housing Council for more information.The report methodology used to gather the statistics in this article can be found here.