What Impact Will Generation Z Have On The Rental Property Market?
Generation Z is now entering the housing market. How much of an impact will they have? What do landlords need to do in order to win them as tenants?
This new generation makes up 26% of the population. According to HotPads, these individuals will pay an average of $226,000 on rent, creating a high lifetime customer value for landlords.
What They Want
As billionaire investor Sam Zell says, succeeding in real estate is all about supply and demand. You’ve got to be supplying what the market is demanding if you are going to be able to attract what is becoming the biggest renter pool in the country. So, what do they want?
Most obviously, they want tech. It’s not optional. This ‘iGen’ expects high tech living as standard. That means high-speed WiFi, smart locks, automated voice controls, Netflix and YouTube on the TV screen, and more.
This also definitely applies to community spaces. As a building owner, every square foot counts. What you do with it directly impacts the rent premium you can demand. Forget tennis courts. Think gaming and coworking spaces, lockers for accepting packages from online shopping sprees, a digital doorman, and ease of getting picked up by Uber.
Data from Multi Briefs says that in contrast to Millennials, Gen Z is not nearly as penny-pinching. While they might not watch much HGTV, they expect that type of fabulous finish. They are also willing to pay more for amenities, even if it means sharing an apartment or coliving.
Where Gen Z Wants to Live
Generation Z is in the phase of their life when they really want to live. They’ve got to be on the social scene. They want to be experiencing things. While millennials have been eager to move out of the city to more suburban areas with more space and more house for the money, Gen Z could save many urban developments by filling those spots.
They may be okay without parking spaces and taking car sharing services. They might be alright with smaller apartments in exchange for more to do on their doorsteps, but they want to enjoy going out.
What it Means for Multifamily Landlords
Apartment building landlords don’t have to position themselves to attract Gen Z. There are still plenty of millennials and seniors who need housing. Though over the next decade Generation Z will become a far greater force in the housing market. If it is a niche for you, the above provides a good rough guide to what they want. They may bring in premium rents if you provide the right amenities and features, and are open to new approaches to leasing and marketing. That may include a mobile-first approach to customer service and using social platforms like Instagram and Snapchat to reach them.
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.