Millennials are still influential, but the next generation is set to shape the future of the rental market, especially with its reliance on technology.
Over the past decade, there has been a major focus on the Millennial generation regarding buying habits, behaviors and lifestyle. Though this data is still important, it is also time to start thinking about the next generation of influencers, Generation Z.
The Millennial generation – currently composed of more than 70 million individuals born between 1980 and 1996 – is expected to be a strong influence in this year’s real estate market. Millennials tend to purchase homes later in life than previous generations, meaning the older cohorts are beginning to enter their late 30’s. With that, many are starting to make the switch from renting to buying with some experts predicting 34 percent of Millennials will own a home in the next five years.
The next generation is beginning to take over the rental market as Millennials enter their home-buying years. The oldest individuals in Gen Z are entering their 23rd year in 2019, positioning them to represent the next wave of renters. Property managers and landlords will benefit from understanding how Gen Z differs from previous generations of renters to best connect and market to this demographic.
They Don’t Know a World Without the Internet
Millennials grew up during the evolution of the modern internet. Gen Z, however – born between 1996 and 2015 – hasn’t experienced a world before the internet. They rely on the web to gather their information – and they have high expectations of what online services should provide. These renters will conduct online rental searches and will disseminate information, both the good and the bad, to their social networks. Having both an online presence and strong social media management will be vital to a landlord’s success.
They Demand Technology
Landlord and property managers can no longer ignore the need for tech in their daily rental operations. Comprehensive digital initiatives should be undertaken. This includes everything from the asset’s marketing efforts to the rental application and lease agreements. As a tech-dependent generation, Gen Z will demand electronic interactions for tenant activities like paying rent, submitting maintenance requests and basic landlord-tenant communication. Landlords can find almost any service they need nowadays for complete rental management through software and mobile apps. These technological advances will make it easier for landlords to do their jobs and improve their relationships with tenants.
They’re Looking for Social Spaces
One of the major amenities Gen Z will be searching for in a rental property is community-based features that appeal to their desire to participate and create. Provide opportunities for your tenants to socialize. This includes amenities like craft or game rooms, coworking spaces, study lounges, community kitchens or outdoor spaces.
Organize events that promote social experiences and help your tenants create a sense of community with one another.
They Care About the Environment
A defining characteristic of Gen Zers is their desire to make a positive impact on the world. It makes sense, then, that this generation is passionate about environmental causes. Environmentally conscious initiatives weren’t necessarily high on a renter’s priority list in the past. S Gen Z enters the rental pool, however, the pressure will be on landlords to follow environmentally friendly practices. Renters are considering eco-friendly features as must-haves when looking for rental options. One study even found renters are willing to pay more for sustainable features that like energy saving appliances or bike storage. Landlords should consider updating rental properties with features like LED lighting, easy recycling services and paperless business.
As Gen Z begins to take control of the rental market, landlords and property managers should strongly consider how the changing market may impact their business operations. Understanding the needs of this up-and-coming generation could mean the difference between a vacant property and a profitable one.
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