It used to be that renting was something we did to save money to buy a house or because we were getting ourselves through college. As a society, we’ve progressed in dramatic ways and our basic interests and needs have also evolved. I often speak of the millennial generation and even late X’ers (Xennials) and Gen Z as an entire generation that doesn’t see things like they once did. You can reference one of my recent posts that discusses this in Understanding Millennials, The Future of Proptech. It explains some reasons as to why flexibility and optionality are so important and the fact that we should be thinking differently about the businesses that serve these generations.
This post is a full on dig at a few things we’ve done in the residential rental space and why it’s ruined renting as well as how we can fix it.
To Property Management.. Renters aren’t treated like Consumers
I have this conversation with our clients and vendors all the time and it’s even worse in the short term vacation space. Renters are treated as a tool to turn investments into properties into income producing assets. “The best tenant is one who pays on time and you never hear from.” 20 years ago this may have been fine, but not anymore. This demographic is now super savvy, makes decisions based upon the rating their peers are giving of a property or service they purchase, finding any information they need online. They will be spend trillions of dollars (millennials will spend $1.4T per year just on travel alone) on these and other services. Here’s the added rub, these other service companies have found ways of showing their appreciation for that engagement in the form of redemption, discounts, great ratings and additional offers that extend beyond that purchase. So why should they expect anything different in renting?
We Stay Fractured.. Our Leases and Our Cooperation
The tech industry is bringing a lot of things we missed previously to light. Big data was all the buzz when we realized that we already had access to a ton of information we needed. We simply either didn’t know we had it or didn’t know where or how to search for it. What we’ve come to learn is that by harnessing that information and effectively maximizing it’s value, data is powerful. My team and I have been using those same principles in the leasing space to maximize value on behalf the renter demographic. We’ve since then begun fully realizing all of the incredible value that can be generated for property owners, management companies and anyone seeking to serve those constituents as well. It’s been incredible and we’ve only just started.
Change the Terms of the “Agreement”
We’ve grown complacent. The fact that there hasn’t been an alternative to the terms we typically see in a lease, has allowed us to think that consumers should “take it or leave it”. The fact is, technology and consumer demand will shift much of what we became complacent with. New terms will expand the idea of duration terms allowing consumers to live and move more closely based upon their schedule, not some arbitrary date.
There are property types that are popping up that willingly serve consumers in different ways which will limit just how beholden consumers will be to typical static lease terms. They will also be able to find properties from a wider array of options that fit their particular need. Some of these property types include WhyHotel or other single and multifamily operators that offer different types of amenities as well. This will allow the property to be occupied by those better suited to that living arrangement. Improving the availability of mutually beneficial terms will increase the likelihood of satisfaction and loyalty. This maximizes the profitability of a property as well as the consumer’s opportunities. Everyone wins.
Better Access.. Better Ecosystem
What if the consumer renter didn’t have to start over every time a lease term ended? There’s an incredible opportunity coming that will unify lifestyle and services together. Ride share, delivery, house cleaning, dog walking and other services are becoming more common place. The idea of access is a big topic and demand for these benefits is becoming greater. Giving consumers single click access to these needs and wants will unlock an immense amount of value that has up until this point been an after-thought. Not only will this no longer be an after-thought, this will become part of that consumer demand as services like this become common-place.
Those that fail to serve the consumer in a thoughtful way will fail to fill vacancy and lose those renters they have now. I won’t even address loyalty in this post but this is a complex exploration that has massive implications for the future of the rental ecosystem. We’re thinking about renting differently now because we know there is more that we can do. Through great data management, partnerships and a thoughtful consumer first perspective we can improve many systemic issues faced by the industry today.
