Approaching business from a growth mindset could mean branching out to new multifamily target market
Young professionals have long been the gold standard for multifamily properties trying to attract new renters. However, renter demographics have begun to shift, and identifying a new multifamily target market could be your brand’s key to growth.
Renter demographic shift
Between 2009 and 2015, the baby boomer rental market grew by 28 percent. The increase in millennial renters during that same period? A measly 3 percent. Many older adults have become renters-by-choice, and they also have the buying power to afford higher-end properties.
Why the shift? Many retirees now want a more flexible lifestyle that allows for travel and includes on-site services, entertainment and recreation options. In addition, this age group would prefer less maintenance, and apartment homes offer a more worry-free experience than home ownership.
In addition, this demographic can boost your property’s retention rates. According to Forbes:
“Baby boomers are much less likely than millennials to move once they’ve found a place to live. Factors such as finding a new job, having a child and other changes in lifestyle are major causes for people to seek a new place to rent. Baby boomers aren’t likely to start new jobs, nor are they likely to dramatically change lifestyles. And they’re not looking for month-to-month leases — they’re more likely to stay once they find a place they love.”
With money to spend and incentive to stay put, you should give baby boomers more than a passing glance when developing a marketing strategy for your multifamily property.
In addition to baby boomers, the market has shown a growing need for workforce housing. According to one expert, writing for GlobeSt:
“Workforce housing has consistently outperformed the multifamily market for the last four years with low vacancy rates and above-average rent growth, says the latest research from CBRE…”
Renters looking for workforce housing tend to have incomes of 60-100 percent of an area’s median income. B-class and C-class multifamily properties often fit the bill for these working renters, but other property types could compete for this market with more affordable smaller units.
Finally, home rentals by families with young children has been on the rise. When looking at the 10-year period from 2006 to 2016, the number of families with minor children who rent their home rose by 1.9 million, a 16 percent increase.
Identifying the right renters for your brand and properties
Millennials or young professional renters still play an important role in renter demographics, of course. However, you might consider a new target market if you are not attracting as many young professionals as you once did. Or you can add a new target market to your marketing mix.
Factors that should influence how you choose the right target market for your property:
Location. Are you near large employers that will support both young professional and workforce housing needs? Or does your location lend itself more to family or baby boomer lifestyles? Your location might hold more appeal for one group over another.
Current residents. What do your current property demographics tell you? How are your turnover and retention rates? Answering these questions could prompt you to do more of the same -- or to try reaching out to a brand-new demographic to fill in gaps.
Amenities and features. Consider whether the layout and accessibility of your units would meet the needs of an older renter, for example. Who would most desire the features and amenities you currently offer? Would there be a way to add amenities that would appeal to a new target renter?
If you have operated in a status quo model for several years, it’s probably time to review your strengths and weaknesses. It could be time to rebrand and to position your property in a completely new way for a new audience.
Reaching a new audience
Again, a growth mindset is about letting go of the status quo. You don’t have to be married to an old marketing strategy if it no longer works for you.
So, when you decide to go after a new target market, consider what that new group might want. For example:
Peace-of-mind amenities (housekeeping, pet care, security, grocery delivery, etc.)
Options for recreation, fitness, entertainment and community
Green spaces and community gardens
Family-friendly amenities (playgrounds, nearby childcare and pet care)
Transit and accessibility
Comfort (vs. luxury)
Sense of community
Technology and peace-of-mind amenities
The snapshots above offer a great jumping off point, but we can help you dive deeper into the research. When you are ready to rebrand and to try a new multifamily marketing strategy, give us a call. We’ll help you move into a brand growth mindset.