As investors continue to grow their multifamily portfolios, new amenity trends and sought-after upgrades go way beyond landscape improvements, investment property management, and building refreshes when it comes to long-term tenant retention as well as attracting new tenants, especially in competitive markets. The housing crash and subsequent great recession of 2008 had an enormous impact on the country’s housing market. As a result, demand for rentals has skyrocketed nationwide and today, more than 36 percent of American households live in rental properties.
Property managers focused primarily on tenant retention and low vacancies have been working hard to keep up with new and ever-growing trends in multifamily marketing—everything from mastering soft skills to ensure excellent customer service 24/7, to carefully monitoring analytics data that tells them what their ideal tenants are looking for in a residence and what their multifamily competitors are up to.
The pressure is high to identify and implement resident retention strategies that meet the needs of prospective tenants, and those strategies include bigger upgrades and the hottest amenities if they want to continue to grow their resident base, save the property owners money, and make sure that current residents stay happy and comfortable in their homes. Multifamily is high stakes real estate that demands big-ticket amenities and sought-after conveniences. They also attract the type of tenants who are willing to pay premium rent prices to get the lifestyle they’re after. These perks also generate new revenue streams for property owners, which is why they invested in this market to begin with.
With more and more Americans settling in urban communities and choosing not to be homeowners for a variety of reasons, the apartment and multifamily market is strong, and as Americans steadily move to urban areas and forgo buying a house, multifamily properties are using amenities to attract (and retain) residents.
There’s a range of trendy new upgrades and amenities that property managers are adding to their multifamily communities to stay competitive. So how do you know which are best for your community? Below are some of the aesthetic trends, conveniences, and creature comforts renters are after today, and information on how to determine whether they’d be a good investment for your property.
Earlier this year, RealtyTimes reported on the increased interest in wellness-focused communities within their multifamily properties, but these wellness-focused communities are more future-focused and ahead of the curve than apartment and condo communities that offer a gym and (possibly even) a spa, but that’s about it. Property managers in multifamily complexes are catering to a growing emphasis on personal wellness in a broader, more encompassing sphere. We’re talking yoga studios, meditation areas, free exercise classes for residents, wellness experts on staff to help residents achieve their health goals, and much more.
Adding to the wellness-focused mind-boggle, the CDC and the U.S. Green Building Council have created guidelines and certifications for multifamily properties who want to create communities that “foster occupants’ physical, mental, and social well-being.” This trend has moved quickly from a niche segment of the population to the mainstream, resulting in the multifamily industry’s tenant-centric dash to build community gardens, add meditation and outdoor fitness centers, and other accommodations to address their residents’ growing requests.
As a property manager, do you think your community needs to get these certifications or install a cutting-edge spa in your community? Not at all. Try simply adding a meditation room or creating an outdoor yoga area to attract tenants and add value to the property.
In addition to in-demand fitness amenities and programs that renters look for, community spaces where neighbors can gather are also a priority among multifamily residents.
Barbecue areas, rooftop decks, and dog runs are just a few common space areas that attract tenants who are interested in socializing. Additionally, a resident website that can be used to make rent payments, schedule maintenance requests, and post a community newsletter is a must-have for every multifamily complex.
Upgrades that serve double-duty to make your multifamily community greener and reduce its carbon footprint are a plus on two fronts:
• Residents and the investment property management team can save money on utilities.
• Attract green-conscious tenants who prefer to live in a community with similar environmental values
and a reputation for being an Earth-friendly residential community.
As a project manager, here are some highly popular green upgrades that attract new tenants and encourage current tenants to stay:
• Solar Panels
While the initial investment in solar panels is significant, the tremendous savings on energy bills, not
to mention the available tax credits you’ll receive, will help you recoup those costs.
Contact a local solar panel and utility provider get more information about how much solar panels
will cost for your community, how much your tax credit will be, and what you can expect your
monthly utility bills to look like.
Providing an opportunity for residents to compost can save on garbage storage and collection. Also,
the compost produced can be used to fertilize garden areas and flower beds in the community and
reduce your gardening costs. If your property isn’t large enough to accommodate a proper compost
area, look for a compost collection company in your area to pick up your residents’ organic food
waste and responsibly recycle it.
The U.S. Environmental Agency (EPA) offers composting basics and guidelines for composting at
home, and the benefits of composting.
Setting up a community compost is an inexpensive and environmentally-friendly program that will
add another feather to your community’s eco-friendly cap.
• Smart HVAC, lighting, and appliances
Replacing old, inefficient systems, lighting, and appliances with new smart versions is another great
step toward reducing your carbon footprint and your utility bills simultaneously. Smart technology
upgrades are a great way to lower energy bills. Residents can program thermostats to turn on HVAC
systems only when they’re necessary. Smart technology can also be used to control lights from
anywhere to reduce electricity use.
Smart technology also offers safety features that residents appreciate. For instance, if a tenant
accidentally leaves their smart oven on, they’ll receive an alert and will be able to turn off the oven
from their smartphone. They can also control front door locks to provide access to children coming
home from school or visitors coming to stay for a few days.
This amenity will attract residents who are interested in reducing their own carbon footprint. Making electric car charging stations available will allow you to charge a little more for rent.
According to a 2017 Carmax survey, electric and hybrid car owners are distributed fairly evenly among age groups, primarily on the West Coast. Consider your demographics and the tenants you’re trying to attract. Start by installing one or two charging stations and see what kind of demand you get.
In the past, renters have prioritized designated parking when making a decision on a rental property. But that’s changing thanks to rideshare apps such as Uber and Lyft as well as bike and scooter share programs like Lime and Zagster. According to the Pew Research Center, the use of ride-sharing apps increased since 2015, when just 15 percent of Americans said they had used a ride-sharing service. In 2018, 36 percent of U.S. adults reported using them.
However, according to Forbes, fewer Americans are buying new cars. As our means of transportation shifts, the need for an abundance of parking spaces is waning. In fact, Architect Magazine has observed a disruption in building design because of this shift.
As a multifamily project manager, it might be time for you to reconsider your property’s parking needs. If your residents are requesting designated parking spots less frequently, you may want to consider downsizing your parking lot using the space to install alternative outdoor spaces your residents will find appealing such as a dog park, a common area for social gatherings, or an outdoor walking or running track.
Such a major change that can impact your value proposition, so it’s important to make sure your resident population supports such a move, as there can still be significant differences according to generation and geographic location. According to Pew Research, while a little more than half of Americans between 18 and 29 had used a ride-sharing app in 2018, slightly fewer than a quarter of Americans over 50 have. It’s also important to note that on the whole, designated parking spaces are still considered a major benefit to renters, particularly those renting outside of urban areas.
Keep an eye on the number of residents in your multifamily property who are taking advantage of ride-sharing apps. As the number increases, consider providing a designated area for dockless bikes and scooters or a pick-up and drop-off area for Uber and Lyft.
Another phenomenon contributing to the drop in car usage is the growing number of Americans who work remotely rather than traveling to an office.
In 2017, there were 56.8 million freelancers in America. According to a 2018 survey of 1,000 hiring managers, 38 percent of respondents’ workforce would be working remotely in the next decade. Additionally, the popularity of shared workspaces such as WeWork is rising.
Consider how attractive a shared workspace in your multifamily complex would be to remote workers. According to Building Construction & Design Magazine, teleworking spaces are an intriguing trend for multifamily property managers to track.
The cost of adding a teleworking space upgrade is relatively modest. Complexes with a little-used conference or common room can reconfigure the space to incorporate large tables with electrical and USB outlets, office chairs, and even cozy nooks where teleworking tenants can work from their laptops. You can even add a few soundproof telephone booths for residents to conduct private phone conversations.
Companies like ROOM provide soundproof privacy phone booths specifically for workshare spaces. Offering the added perk of free WiFi access in a shared workspace and other areas of the property is huge among Millennial and GenZ renters.
To see if creating a teleworking space is right for your property, survey current residents as well as resident applicants to ask if they work from home and whether they would make use of a common workspace. Weigh the results of their responses to find your answer.
Online shopping is the norm among today’s busy professionals, and multifamily renters look for properties that securely accommodate package and grocery deliveries According to a transportation report in DC Velocity, e-commerce continues to radically reshape how both B2C and B2B companies serve their customers. UPS estimates global e-commerce sales will hit $3.3 trillion in 2019 and more than double to $6.7 trillion in 2025. The report cites analyst predictions that global e-commerce, projected to account for 13 percent of retail purchases in 2019, will grow to 20 percent in 2025—all of which continues to drive package and parcel volume.
Today, people rely on e-commerce site to get everything from electronics to clothing to groceries delivered to their homes. Multifamily tenants expect secure delivery accommodations for their orders.
As a result, more and more multifamily properties are installing package delivery rooms for residents, and providing services wherein a property management staff member can accept grocery deliveries and put them in the tenant’s unit, making sure perishables are places in the refrigerator or freezer.
Implementing package delivery services is becoming more commonplace in multifamily communities, using technology specifically designed for this purpose. In situations where a staff member cannot always be available to accept packages, touchscreen mailbox tools are available in which a mailbox can be opened by the delivery person electronically to leaves packages securely. The resident then receives a text with a PIN to open the mailbox.
Managing multifamily properties to maximize tenant retention and attract new tenants requires property managers to know what amenities their target tenants want and find ways to implement them. In addition to the upgrades and amenities mentioned above, property managers need to consider which options best foster a sense of community while providing comfort, convenience, and cost savings through technology.
Determining which amenities and upgrades offer the best returns on investment for your multifamily property will boil down to knowing your residents as well as the kind of residents you want to attract, and actively seeking their input regarding the upgrades they’re looking for. By communicating, listening, and measuring your ideal tenants’ needs, you’ll be better prepared to make enhancements that will position your multifamily property to offer what the market demands. That will also make you the king of effective investment property management.