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Lowering Vacancy Rates With Today's Multi-Family Renters

Demand for rental units for this younger group is often based on financial considerations. High student debt, lower expectations for that perfect job after graduation, and a more mobile lifestyle are all a part of their decision to rent rather than buy.
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There are a lot of advantages in multi-family property investing. From economy of scale in expenses to increase cash flow to availability of funding, investing in apartments can be very rewarding. You may not have full authority to make decisions about tenant relationships and services, but these are good suggestions for multi-family owners and partners to consider.

Over the past eight years that began with the crash in 2007, home ownership has been dropping and rental demand has been rising considerably. Of course, higher demand has also delivered higher rents and better cash flow. This has contributed to an increase in apartment construction while new home construction is still down considerably.

We have a lot more tenants these days, and they aren't necessarily chomping at the bit to buy a home. They are however more demanding in their rental home selection criteria. This is despite what we may think about higher demand and some competition. There are two distinct groups that I'll be talking about here, and they're all about age. Both groups are increasing their desire to rent rather than buy, but they don't necessarily want the same features and amenities. I'm talking about Millennials and Baby Boomers.

Millennials

Demand for rental units for this younger group is often based on financial considerations. High student debt, lower expectations for that perfect job after graduation, and a more mobile lifestyle are all a part of their decision to rent rather than buy.

Location is important to this group, with a desire to be "in the scene" for lifestyle and entertainment reasons. Sure, they don't want to be too far from where they work, but what they do after work is important to them. They're often willing to commute a little farther to work so that they can be in the fun urban areas.

Another locational consideration are their very mobile communication requirements. In urban areas it's usually not a major issue to worry about, as the major cellular carriers cover those areas well. It can be more of a consideration in outlying or more rural areas though.

Offering WiFi, even at extra cost can be a great tenant retention and marketing tool. They don't have to constantly be setting up new service when they move. But, you can't skimp here. It must have little to no downtime, be high speed, and enough bandwidth to not suffer in periods of heavy usage. One approach can be to offer a reduced cost special deal for individual service direct with the provider. Making it fast and easy for them to sign up can make a difference when their lease is up.

Baby Boomers

Downsizing in retirement and empty nesters are creating increased demand for rental units in this age group. Location is important to them as well, but proximity to employment isn't the issue in most cases.

They want some of the same things the younger group wants, to be in areas where they can enjoy restaurants and entertainment. However, it's less of an urban beat type of thing and more about common interests and concerns. Proximity to good medical care is one consideration.

Many in this group aren't "retired" in the old sense. They are often engaged in home business type of activities to supplement their income. This means that they are also interested in good communications, particularly Internet access that is reliable.

Both of these groups will usually value a space in the home for a desk or a full home office. It's interesting how it can be more difficult to make a moving decision when it's not just home but a workplace as well.