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 tenants, the next generation is 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 rental industry is obsessed with talking about how to cater to millennial renters (us included) due to their huge presence 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 tradelines, according to Experian™ the oldest members of Gen Z sported an average VantageScore® of 631 in 2016, with low levels of debt. If they 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 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 using ApplyConnect® to get your tenant screening done within minutes, here are a few things you can do to free up some much needed time:
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.
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 ApplyConnect®’s online rental application which can be completed completely online and on the go.
Get Rental Payments sent Straight to your Bank Account
With so many Gen Z-ers with smartphones, it would be silly not to accept online rental payments. Not only is it convenient for your renters but it is one of the easiest ways to ensure you get the rent paid and on time. Add automatic payments and the ability to split the rent between roommates, and you have this next generation’s rent locked in.
Real Estate Agents, Check your Online Information
Check that the information online about you – from office hours to your phone number–is correct. Post on your social media channels if you’re going on vacation and how clients can reach you. 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.
- Realtors: Social Media is not Optional
I’m going to say this loud and clear for the Real Estate Agents in the back: you need to have a social media presence. The question in the rental industry is no longer ‘Do you have professional social media channels?’ The question now is: Are you using them?
Many realtors have set up Facebook pages and Twitter accounts, but rely on them solely to lead interested clients to their website or an occasional rental applicant to a 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 rental applicants and clients 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 client communication? Getting your clients to engage with you (and each other) on a platform is no easy feat, but it’s not impossible. Ask prior clients to leave a review, or have rental applicants tag your pages in happy photos of their new home. The more you show both sides of rental work the more likely clients are going to stay in touch with you and rental applicants are going to seek you out. Show potential clients a reason to use your services through your Facebook page or other channels.
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 rental applicants online (cutting your budget for traditional marketing materials). Don’t wait until this becomes industry standard. Get a head start now.
- Texting is Key for Both Landlords and Real Estate Agents
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 tenants 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 renters. 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. Choose a tenant screening service that has mobile-optimized forms so that you can expedite the application process.
While text messaging is currently convenient considering that 96% of Gen Z-ers own a smartphone, and texts can be discreetly exchanged via a phone or smartwatch, don’t bet on text messaging 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 the demographic you’re trying to attract and your current tenants.
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 you and the quality renters you seek to obtain.
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