AIM Special Report: Leasing Strategies for Today’s Market
Renters' searching habits have changed considerably in recent years. Here's what to look for.
With renters becoming more methodical in their searches, staying longer and skewing older, leasing strategies need to be adjusted across the renter cycle, from lead to lease and beyond. That was the message during the opening panel at this year’s Apartment Innovation and Marketing Conference.
“Renters’ decision-making is changing,” noted Brent Camp, vice president of leasing for Asset Living. They’re doing more research and asking for more. The downside is the rental process is taking longer. The upside is fewer “looky-loos,” noted Zillow Chief Economist Skylar Olsen, resulting in higher conversion rates from more intentional prospects.
Mitigating that extended decision period may require an earlier start to demand generation, suggested Arthur Kosmider, senior director of marketing & customer experience for LeFrak. In New York City, the lead-to-lease period is now 45 days, he noted, and in Miami it has grown to 60 days. Thus, if occupancy is needed in July, it may be wise to start this process in May.
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Other differentiators can also make a difference in closing leases, such as ensuring a human touch when it can make the greatest difference. While artificial intelligence can be a valuable tool in other parts of the process, “don’t let AI close your leases,” Camp suggested. “Be that one person doing that.” He also advised making reputation management the responsibility of everyone on site to ensure a positive impression of the community, since inconsistent responses to Google reviews can quickly turn off prospects.
On the other hand, the speakers advised against being too quick to offer rent concessions to move the leasing process along. Moderator Brian Miller, director of partner experience and engagement for Zillow Rentals, noted that 39 percent of listings currently come with concessions, and that can be a red flag if it’s happening too regularly. Camp called it “lazy concessions,” which are “skipping the hard part.”
A better alternative might be offering soft concessions instead, such as on-site storage options or other amenity provisions, Kosmider said.
Cater to Renewals
The prospect’s age may impact what will resonate most with them, though. That may also be the case with the amenities you offer in general, since the average age of renewals is going up, Kosmider noted, as a growing number of people in their 30s and 40s remain renters. “We need to reshift our strategy to focusing on existing renters,” he advised.
Older renters may stay in place for an extended period of time, he said, as a two-bedroom unit can comfortably house a young couple with a child for as many as five to seven years. But he cautioned that those renters will be more interested in renewing in a community that caters to their lifestyle, such as one that includes an on-site restaurant, concierge service or coworking facilities.
Olsen advised staying on top of shifts in housing trends to ensure amenities remain relevant. Pet ownership, for instance, has seen a huge surge in the past few years, with 70 percent of renters now having pets versus 35 percent with children.
“Macro data sets your strategy, and micro data sets your tactics,” Kosmider advised.
