For the past couple of months, I have been writing about ways to expand your business and create new opportunities in this challenging business climate. This month I will focus on the apartment rental market, specifically on how to capitalize on the recent growth in this sector and the demands of today’s renter.
First, let’s look at the facts. A report released this past December revealed that in properties with five or more units, building starts are more than 80 percent higher than a year ago. While this is still low by historic standards, the numbers are rising rapidly and it will continue to climb as a generation of millennials leave the nest and begin to create their own households. Combine this with growing demand from displaced past homeowners and you have created an enormous opportunity for the rental market over the next decade. The question you have to ask yourself is how are you going to profit from this wave?
When it comes down to it, every multi-family builder has two main objectives—how to get higher rent and have higher occupancy than the rest of the market. The key for their success is differentiation and therein lies the opportunity for your business.
The biggest demographic group that is driving the growth in rental construction is Generation Y. As this group waits longer to marry, have a family and purchase a home, they are renting. And GenY’s aren’t just looking for any apartment, they want all of the features and amenities of mom and dad’s McMansion without owning it—they’re looking for apartments that are technology-rich, customizable and include high-end community-living areas.
Imagine an apartment that is pre-wired for entertainment with lighting control, built in audio, and a security system. Imagine the iPhone apartment that lets them manage their home remotely on their iPhone. If we are going to embrace this opportunity we need to understand the potential new occupants’ lifestyle, needs and wants. Then we need to learn how to sell this idea to multifamily builders. What type of “gee-whiz” feature can your business offer that would appeal to this market?
And imagine if this was more than just a one time offering—can your business deliver an upgrade that a renter might be willing to pay $5-$20 a month for? For example, one retailer got creative and partnered with an apartment community to offer built-in speaker systems for $20 a month. This type of recurring revenue could make a big impact on your business, especially if you multiply it by the thousands of renters in your market. CR
In this column each month, Builder Homesite (www.builderhomesite.com), CEO Tim Costello will explore how companies can leverage the economic and environmental factors affecting our industry to grow in this ever-changing and challenging business environment. From targeting specific demographic profiles to driving operational changes, this series is a must read for any business wanting to thrive during these dynamic times. This column is sponsored by Specialty Electronics Nationwide.