4 Trends To Attract and Retain New Renters

In this modern housing market, in order to become and remain competitive, multifamily communities, developers and property owners need to understand and implement the current housing trends that attract new renters and keep them happy enough to stay put.   From construction and renovation trends to smart home technology, renters have made it clear what they want. Now it's time to deliver.   

Open Layouts

Floor plans in newly constructed multifamily communities are now following the same trends we've been seeing in the residential single-family housing for years. Open layouts with fewer dividing walls between the main living spaces like dining, kitchens and living areas look and feel bigger than their counterparts with the same square footage. Open floor plans are here to stay, so it makes sense to invest in already constructed properties and renovate to attract new renters. If you're considering renovating existing units to new layouts with open floor plans, call Stonebridge Builders, a Denver based commercial construction firm that specializes in apartment and multifamily renovations. Stonebridge offers expert consultations in design and renovation.   

Modern Materials 

Granite Countertops used to be the "it" or "go to" kitchen upgrade.  But now, builders and developers are answering the call for a more modern apartment concept that appeals to a new generation of renters. Poured concrete countertops combined with rustic looking lighting and metallic accents all create a more modern look and feel that satisfies the new renters' desire for a more urban and industrial look and feel. While traditional lighting works, replacing standard outdated lighting with a trendy new product is a low cost upgrade that will turn heads and deliver signed leases.   

Smart Home Technology 

The newest generation of renter is tech-savvy and they want home technology that aligns with their lifestyle. While it may seem like a poor investment for multifamily properties to adopt new in-home technology given that technology changes so rapidly, there are certain tech upgrades that are universally accepted and desired and come with minimal cost upfront, but may save money in the long run. LED lighting, web connected sensors for turning lights on and off and digital thermostats controlled with a mobile device save residents money, but also decrease the property's energy costs for common areas.   

Amenities 

It used to be that a pool was all that was needed to create the feeling of luxury. But today's renters are looking for more. They want updated amenities that align with a more modern lifestyle. As more people are working remotely, renovating a common area to provide a business center or co-working space to accommodate residents that work from home can be a huge selling point to prospective residents.  Additionally, fenced in dog runs, on-site dog washes and package delivery rooms attract residents. 

If your community currently doesn't offer these amenities, Stonebridge Builders can design and build one at a low cost for a big return on investment. 

The "Next Generation" Apartment - survey results of what renters really want

What is The Next Generation Apartment?  Read on for some interesting stats on what renters want based on results from the recent MFE survey.

Multifamily Executive Magazine recently engaged their Concept Community data partner, J Turner Research, to uncover the wants and needs of the next generation of renters in one of the largest research studies collecting over 84,000 responses nationwide. They dove deeply into the question of which unconventional amenities are renters willing to pay for.

The multifamily industry is consistently trying to come up with new ways to entice renters; upgraded interiors like hardwood flooring versus carpet, stylish lighting and trendy lifestyle amenities. But are those efforts attracting renters who are willing to pay extra for them? The clear answer from the research is No, especially given the consistently increasing rental rates over the past several years. But there are some exceptions, and if you’re looking to make some changes to your community, considering certain amenities over others may pay off in the end.

Nationwide, 84,924 residents living in 1,555 communities representing 26 apartment companies responded to the J Turner research survey. The majority of respondents were Millennials (18-34 years) at 59%, followed by Gen Xer’s (35-50) at 25% with Baby Boomers (51-70) and the Silent Generation (71 and older) combined at 15%.

The study was weighted to gain greater insights into certain topics like health and fitness amenities, electric car charging stations, bike storage and bike sharing opportunities, and Common Area and Smart Home upgrades. Here’s how they stacked up:

Smart Home Technology: Sure! If it saves money

Renters want technology options that will ultimately save them money: number one on the list is free, in-home Wi-Fi, followed by smart thermostats, and then Energy Star kitchen appliances. However, it’s not just about money, they also want technology options offer convenience like keyless electronic front entry, in-unit built-in USB charging ports, motion-detection cameras, and motion-sensing lighting. Unfortunately, the survey didn’t yield statistics on the additional monthly amount renters are willing to pay, but the desire for money-saving smart technology was consistent throughout all demographic groups and spanned all generations.

24/7 Package Lockers: They want it!

Over the past several years, the recent popularity of online shopping has substantially increased the volume of packages delivered. There is minimal impact to single family homes but has a dramatic affect in multi-family residences. When asked how many packages residents receive per month, excluding the holiday season, over 25% answered at least one, 20% said two while 17% said 5 to 10. Owners and managers are having trouble keeping up with the increased volume and often have to come up with new systems for making sure packages are delivered securely to renters.  In some communities, because packages can go missing once delivered to a doorstep, residents authorize entry to their unit for package delivery in their absence. Despite creative approaches, over 27% of respondents said they have experienced problems or delays in receiving packages. When asked to rate the importance of 24/7 access Package Lockers, over 28% rated secure on site package storage as a top priority amenity and are willing to pay for it. 20% said they would pay additional rent of $5/month for this amenity.

Fitness Classes: Some do, most don’t.

The survey asked renters to express their interest in several fitness related amenities, among them were yoga rooms, spin studios, golf simulators and conventional fitness equipment with Bluetooth connectivity etc. Three unconventional fitness amenities stood out as having the greatest interest and potential revenue generating impact: fitness classes, steam rooms and walking trails. 46% of all renters are willing to pay at least $5 extra per month for fitness classes. Of the 46%, 14% said having fitness classes would be worth an additional $15 in additional rent per month.  Steam rooms came in a close second with 43% of all renters willing to pay an extra $5/month. Of that 43%, 12% said a steam room would be worth $15/month extra.

Bike storage: Yes… if they have a bike or plan to get one.

Over a third (32.3%) of all renters currently own a bike and 11.8% more say they plan on getting one in the near future. With 44% of renters having a potential need for bike storage, does it make sense to create a designated bike storage space? The stats look good on this one, especially when you consider that 20% of all renters, whether they own a bike or not, are willing to pay $5/month for bike storage. 7.4% would kick in an additional $10/month and 4% would pay $15. In the end, 30% of all renters are willing to pay for bike storage, independent of bike ownership.

Bike sharing: Nah, not at this time.

The results show that while renters are enthused by the idea of a bike share program, few are willing to pay for it. Over 10% of all renters showed great enthusiasm for bike sharing. Another 22% ranked their interest at 5 on a 10 -point scale. However, when it came to putting money where their mouths are, only 26% are willing to shell out even $5/month for it. More renters are willing to pay for bike storage than bike sharing, so save the upfront and ongoing expense of a bike share and build a secure bike storage facility.

Electric Car Charging Stations:  Nope!

J Turner’s Survey results found that 15% of renters intend to purchase an electric vehicle within the next 5 years. Of this 15%, just over half would be willing to pay for on site charging stations. However, that still leaves 85% of renters with intention to buy and no need for EV charging stations on-site.

When considering adding new amenities that will benefit renters and bring the biggest bang for your buck, the research shows that offering bike storage, providing 24/7 Package Lockers and upgrading units with smart technology are the best bets.  Stonebridge Builders specializes in common area upgrades and build outs for added amenities as well as in-unit renovations. Call to schedule a consultation today to generate more income tomorrow!

Look for full survey results of “the Next-Gen Apartment” study when they’re officially released at the 2016 Multifamily Executive Conference next month.

In the Midst of a Boom, Existing Properties Need to Compete with New Construction

Denver is in the midst of a boom in the multifamily market. Over 80 new projects were completed in the last 5 years, and with 25,000 units under construction this year and 3,246 new apartments delivered in the first quarter, existing projects need to step it up to compete.

Average rents for apartments built since 2010 are 60% higher than rents for apartments built in the 1970’s. Compare $1729 versus $1079 respectively and it’s clear that outdated multifamily properties need to renovate, remodel and add amenities in order to take advantage of rising rental rates. 

Chris Tolar, President of Stonebridge Builders, a Denver-based commercial construction company specializing in apartment renovations says, “The bulk of our business is in multi-unit apartment rehabs. Regardless of location, property owners are feeling the pressure to upgrade and update individual units given the current market conditions. The increase in inventory of brand new units is creating a pressure to keep up and compete. “

Stonebridge Builders Business Development Director, Lance Miller, confirms that complete unit renovations and clubhouse remodels consist of the bulk of their contracts for properties with larger renovation budgets. However, for apartment communities with tighter budgets, upgrading existing common areas and clubhouses and adding amenities like BBQs, dog runs, dog washes and especially package rooms, allows them to compete with new construction.

Construction of a package room can be a big upgrade at a relatively low price point compared to other renovations. Package rooms provide a much desired, convenient service for residents. Safe, 24-7 access to package retrieval is an amenity most residents are willing to pay extra for, and can be a deciding factor when choosing a community.

Tolar says, “Since Amazon has come on the scene, with most people doing the bulk of their shopping online these days, it can be a major burden for the on-site staff to constantly have to pull packages for residents. As a solution, we convert space inside of a clubhouse or common area into a self-service package retrieval facility. For communities that just don’t have inside space to convert, outdoor/weatherproof lockers are also available. Also, we can, and have built additions to house a new package room when space is limited.”

Whether you’re considering a complete overhaul of your multifamily property, a new clubhouse or looking to add or upgrade specific amenities, call Stonebridge Builders, the industry expert in Rehabs and construction.

Design Trends in Multifamily Living- Spaces that Build Community

The new generation of renter is looking for amenities that extend beyond their own apartment and into shared and common spaces. What does this mean for the Multi-family industry? To keep units filled, multifamily properties need to respond to this new demand and keep “community” in mind when renovating existing spaces and designing new ones.

To meet these new demands, common use amenities like lobbies, laundry rooms and recreational areas should be designed for multi-use and to encourage community connectivity. For example, a space that serves as a leasing office by day that can be converted to a shared common room after hours. This space should have lightweight and easy to move furniture that residents can arrange for small gatherings or large events for many people. In designing these multi-use spaces, materials should be chosen with durability as a priority. Fabrics and floor coverings need to hold up to greater wear and tear without looking worn or used.

 Real estate start up Common, has taken the concept of providing amenities intended to build a greater sense of community in multifamily living to an entirely new level by creating Coliving “homes, ” a shared-living concept similar to boarding houses popular in cities during the Industrial Revolution and the early 20th century.  Co-living offers residents reduced rents in desirable, typically high cost, urban areas for a substantially reduced monthly rate. The monthly rent gets residents a bedroom, not an individual apartment. For many residents, common living rooms and kitchens and shared baths are the trade-offs for otherwise unaffordable rent. However, for others, this isn’t a trade-off, it’s a choice for a unique lifestyle and culture and the reduced rent is an additional bonus.

The biggest challenge with creating Coliving spaces is convincing developers to design buildings for this concept and purpose. The floor plans aren’t consistent with traditional multifamily properties. Sterling Jawitz, the head of real estate strategic partnerships at Common says “When we design our projects and work with developers from the beginning, whether it’s a ground-up development or rehab or adaptive reuse, we try to be very cognizant and respectful of the fact that we’re asking them to build something that is maybe not as typical as you would see in the market with studio and one- or two-bedroom units.”

Given Denver’s housing shortage and extremely tight rental market, maybe it’s time for developers to take a risk and consider creating spaces that offer renters seeking a different housing culture a place to create this new type of community?

At the very least, multifamily properties should consider using a local company like Denver’s Stonebridge Builders, to design, remodel and/or renovate existing common areas for greater flexibility, multiple-uses and to appeal to the new renter looking for amenities that extend beyond the 4 walls of their own individual unit.