We looked at current trends in the MFU real estate market — both for rentals and sales — which property managers need to be aware of if they are to remain competitive. From the demographic shift in buyers and renters to hot button issues such as sustainability, and the changing expectations of standard features buyers and renters expect. We’ve covered all the bases to give you a comprehensive guide to selling and renting in 2022.
1. Buyer and renter demographics are changing.
With significant growth in urban housing, the demographic makeup of both buyers and renters has changed significantly. The key demographic purchasing units is now Millennials, those born from the early 1980s to mid-1990s, and in terms of the rental market, the majority of those looking to sign tenancies are Gen Z – those born at the turn of the century and now coming of age.
For property managers of urban or suburban MFUs, it’s vital to understand how this new generation of buyers and renters think about property, and the features they value most when selecting their homes.
2. Property technology is becoming a necessity.
This demographic shift is influencing the expectations that buyers and renters have when choosing MFUs. Younger generations no longer see property and smart home technology as a luxury — it’s now a must-have feature.
From core services such as fiber broadband connections and high-speed internal Wi-Fi networks, to security features such as cameras, smart locks, and remotely monitored doorbells, Millennial and Gen Z residents expect to move into a fully networked smart home.
Because consumer expectations have changed, developers and property managers can no longer look at property tech as a nice-to-have add-on but rather as an imperative to remain competitive.
3. Changes in regulations are creating hesitation in buying.
During the pandemic, changes to the regulatory environment at both a federal and state level were brought in to give added protection to renters who may otherwise have faced eviction. In some cases, these have had a knock-on effect on buyer confidence whereby investors are hesitant to purchase rental properties if they feel they may have difficulty balancing tenants’ rights against their ability to manage the tenancy profitably.
For property managers struggling to sell units, a short-term solution is to focus on leasing rather than sales, while waiting to see how the regulation change as the country emerges from the effects of the pandemic. It’s therefore ever more important to have the right features in place to attract high-quality, high-liquidity tenants.
4. Interior personalization is increasingly important.
Today’s tenants want to be able to customize their own space — with an increasing number of younger people renting properties long-term, they don’t want to wait until they own property to be able to make it feel like home.
Property managers who want to attract this generation of renters should be prepared to relax restrictive rules around the types of modifications that their tenants are allowed to make, including repainting, hanging pictures, switching out furnishings, or replacing items like window blinds or light shades.
5. Green and sustainable homes are more sought after.
It’s no secret that the younger generations are more concerned with environmental issues than those who preceded them, and this extends to their living space. Homes with LEED certification, those with built-in features to reduce energy consumption and waste, and those which are built or furnished using sustainable materials are particularly in demand.
Property managers wishing to capitalize on this trend should invest in environmentally friendly features, including high-quality wall insulation, low-emissivity window glass, high-efficiency appliances, sustainable building materials, fittings, and fixtures. It may also be worth commissioning an independent assessment of your property to identify areas for improvement.
6. Virtual reality tours and online leasing are here to stay.
As digital natives, Millennials and Gen Z are also much more accepting of self-guided leasing — they’re prepared to search, view, and sign up for rental properties online without physically visiting the unit. It’s a practice that was accelerated by the travel restrictions caused by the pandemic but has remained popular.
Property managers targeting this group of potential tenants should ensure that they have virtual tours available online. 360º photography and video have been popular for some time now, but increasingly realtors and property managers are making full virtual reality experiences available, allowing renters to move around and view a property from the comfort of their own home.
In tandem with this, it’s important that property managers have a system for online contract review and signing available, ensuring that when a tenant is ready to take on a lease, they can complete the relevant paperwork over the internet, including payment of any necessary holding fees or deposits.
As the generational balance shifts, and the majority of buyers and renters are now from the Millennial or Gen Z generations, property managers of MFUs who wish to remain competitive need to keep up with their expectations and requirements. The key concept here is flexibility — the younger generation expects to be able to adapt their space, use innovative technology, ensure sustainability and do more of the paperwork online. Property managers who can stay ahead of this curve will find it much easier to attract tenants to their rental properties and find buyers for units that are available for sale.