It’s time to move over Millennials, Generation Z are the new renters in town. While the rental industry has been focusing on how to attract and retain millennial residents, the next generation is quickly coming to rental age. The big question is, ‘how can you prepare for this upcoming generation?’
Millennials (or Generation Y) are roughly defined as those born between 1980-1994; making them ages 37-23. Like with all generations, the dates where this cohort starts or ends is very contested, however, Australia’s McCrindle Research Centre defines generation Z as born between 1995-2009. This means that the oldest of this generation would be about 22 years old, with the youngest at 8 years old. While the multifamily industry is obsessed with talking about how to cater to millennial renters due to their huge presence and unique preferences within the rental market, by 2020 Gen Z will account for 40% of the consumer market, and will only continue to grow.
Although the credit bureaus have limited information on this new generation as only a few are old enough to amass credit tradelines, according to Experian™ the oldest members of Gen Z sported an average VantageScore® of 631 in 2016, with low levels of debt. If Gen Z-ers do have tradelines, the study showed that it largely consisted of bankcards, auto and student loans. By comparison, younger Millennials showed credit scores at 626 and older Millennials were at an average 638 last year. While this is only the beginning for this generation, it’s important to note that based on these averages a 22-year old Gen Z-er’s credit risk is in the same ball park as a 37-year old millennial rental applicant. As this age group starts looking for a rental, you might want to start investigating how to effectively market your vacancies and improve your renter relationships with Gen Z-ers through their preferred communication channels.
- Opt for Instant Communications
Let’s be honest, we could all use a little automation in our lives. Whether it’s posting rental listings or collecting rent each month, time-sucking tasks like these can make it difficult to avoid using one approach for marketing and retention. Beyond switching to an easier, more streamlined property management system, here are a few things you can do to free up some much needed time:
Put your Forms Online
Are you providing only physical rental applications? Scan your application and attach the .pdf to your website and online communications. Better yet, opt for an online rental application like Ready2Apply that can be completed 100% online and on the go.
Check your Online Information
Verify that the information about your property online – from your office hours to your phone number–is correct. This goes beyond your own website to verifying places like Google Business and Yelp have you listed with accurate information. Post on your social media channels if your office has changed its hours, or if you’re closed for a holiday. If you already have email templates, check to see if the information on that is still relevant, including your signature. Prevent wasted hours on excessive marketing and make it easier for leads to come to you.
How many times have you manually written out your rental requirements in an email? Or worse, do you have your rental requirements written down at all? Take the time to create an email template detailing all the forms, paperwork, etc. required with the rental application and at move-in. Make sure your email template is both professional, but informal. A study from Kantar Millward Brown found that less than 25% of Gen Z-ers have a positive perception of online ads, making impersonal and cold-call emails even more ineffective.
- Social Media for More than Marketing
I’m going to say this loud and clear: you need to have a social media presence. The question in the rental industry is no longer ‘Do you have social media channels for your property?’ The question now is: ‘Are you using them?’
Many rental properties have set up community Facebook pages and Twitter accounts, but rely on them solely to lead interested applicants to their website or their occasional listing post. While it’s important to be on social media period, if you leave your channels abandoned you risk losing an opportunity… or worse, providing outdated information. Sparks & Honey reported that Gen Z-ers had an average attention span of 8 seconds (with the average millennial at 12 seconds), meaning that this generation will be especially hard to engage with. It’s not enough to be on the web. You need to be trying to engage with potential renters as well.
You already know the benefits social media has in terms of marketing — like posting listings and providing livestreamed tours of available units – and your web exposure, but what about for in-community communication? Getting your residents to engage with you (and each other) on a platform is no easy feat, but it’s not impossible. Post an announcement about your upcoming resident event, livestream a Q&A session about the community’s next big renovation, or send out reminders about large property maintenance (like repaving or painting). Give your residents a reason to engage with your Facebook page or other channels. They aren’t going frequent your channels by themselves.
Additionally, you will need to speak the language of your intended audience, and this goes beyond Facebook and Twitter. A study by mobile marketer showed that high school and college students frequent Snapchat more than any other social network. Snapchat offers a unique experience where the majority of your message is visual, with words or links as an afterthought. Unlike other platforms, Snapchat’s (and even its competitor Instagram Stories) primary goal isn’t to achieve engagement, but more to remind them that you’re here. This can have a beneficial impact in the long run with referrals and positive word of mouth.
With an estimated 96% of Generation Z owning a smartphone, connected online for up to 10 hours a day, and over 85% using social media to learn about new products, there’s a lot of opportunity when it comes to attracting new generation of renters online. You just need to consistently post on your channels and post content that not only engages with your home base but provides a reason to come back. Don’t wait until this becomes industry standard. Get a head start now.
- Texting is Key
You know as much as I know that on average, Millennials are not fond of phone calls… and the next gen takes that sentiment to a whole new level. According to a study done by Marchex, “Gen Z consumers are 60% more likely than the average consumer to hang up if the phone is not answered within 45 seconds.” They value speed over all. While I’m not recommending you wipe out calling all together (especially in an emergency), when you’re reaching out to your residents or applicants, it’s vital that you use the most convenient mode of communication for them, not for you.
I’m not going to lie, this is definitely a challenge, but it can result in a faster, easier application process and more effective communication between you and your residents. Rather than calling a rental applicant during their work or school hours and having to wait a day or two to hear back, send a brief text message as well. Software platforms, like CICTotal Manager, have begun implementing automated texting as a tool for single or mass messaging of leads and residents. You can also apply your new email skills, mentioned above, by downloading text message template apps and saving short messages in your notes that can help you respond without taking much time. Just be sure you use link shorteners whenever texting as a way to continue the process online and to avoid sending a message that looks ugly and outdated.
Text messaging is currently one of the more convenient communication methods considering that 96% of Gen Z-ers own a smartphone, and texts can be discreetly exchanged via a phone or smartwatch. This doesn’t mean you should bet on text messaging being king forever. According to a Google study, only 38% of young Millennials (ages 18-24) spend 3+ hours a day texting, while 52% of Gen Z-ers use messaging apps like Facebook Messenger and WhatsApp 3+ hours a day. Trends can change, and it’s up to you to weigh all your options to find a communication method that’s the most effective for your entire rental community.
While millennials and generation Z have a lot of similarities in terms of marketing strategies, this makes it even more vital to keep up with technological advances as generation Z enters the rental market. Millennials are already the largest renter group in the market, so there’s no excuse not to upgrade your current processes and embrace communication tools that will attract and retain both generations of renters. Take the time to bridge the gap between your property and the quality renters you seek to obtain so your business can not only succeed, but prosper in the future.
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