Jan 10, 2022
4 minute read
The multifamily industry is buzzing about record-breaking occupancy rates as renters confidently seek new living situations suited to their needs. This might tempt leasing teams to relax their multifamily marketing initiatives, but resident retention will be one of the biggest challenges moving forward.
High demand means that renters, including your current residents, are active in the market. Owners and operators should be wary of getting caught in the ‘occupancy fallacy’—the idea that high occupancy rates in the near term will alleviate vacancy concerns longer-term.
During this period of shuffling, it’s important that leasing teams stay aware of just how mobile renters will be moving forward. Renter migration is the sleeping giant that apartment communities won’t want to ignore.
Research on renters’ long-term plans shows just how harmful falling for the Occupancy Fallacy could be for leasing teams that don’t prioritize retention. In a November 2021 survey conducted by RentPath, 60% of renters indicated that they planned to seek a different apartment or home within the next six months.
Renter migration started to rise at the beginning of the pandemic. The Wall Street Journal found that in 2020 alone, more than seven million households moved to a different county. There was also a 23% higher rate of people moving out of big cities in favor of midsize and small communities.
The shift toward remote work is one of the biggest factors contributing to new moves across the country. Working from home is the new normal for many companies with 70% of renters saying they will continue to work remotely as often, if not more, in the future. With less pressure to live near the office, renters are assessing their options and using digital resources available to more efficiently find the next best home.
Renters are also redefining what an ideal home means to them, and where that ideal home should be. New factors are motivating renters to relocate, from ideological reasons to the need for outdoor space. Redfin predicts that renters will “vote with their feet,” moving to areas that align with their politics.
Savings and lifestyle factors are also making the top of renters’ wishlists. In a November report, the RentPath research team surveyed renters across the country about their plans to move and preferences. When asked about reasons for moving, respondents selected saving money, finding a property with outdoor space, and living in a safer neighborhood as the top three factors.
Budget is another growing concern for many renters. The Federal Reserve Bank of New York predicts a median increase in the price of rent at 10.1%. Unable to sustain increasing rent prices, renters are seeking more affordable communities. And to compound that, the eviction moratorium has ended.
The real estate industry is booming. So, homeownership is out of reach for more and more people. The median sale price for homes is up 15% this year and demand for real estate nationwide grew 9.1% this year, compared to a 17.7% drop in housing supply.
Families that went into a rental with a short-term mindset hoping to eventually purchase a home are now faced with highly competitive housing markets on top of new work environments and day-to-day needs. In these cases, it is natural that rental home priorities are different.
Losing a resident is no small cost for owners and operators. As cited by the National Apartment Association, the starting cost of losing one tenant starts at around $1,000 and can grow to $2,500-$5,000 depending on capital replacements needed to get the unit move-in ready again.
In light of these trends, multifamily marketers can get ahead of the occupancy fallacy by implementing strategies that nurture current residents. Through communication and reputation management, effective property teams strike a balance between attracting high-intent renter leads and keeping long-term residents happy.
To take full advantage of high demand, you can capture renters migrating to your area by giving them what they need in their search. A holistic marketing approach that reaches high-intent renters through social media, search advertising and email marketing in addition to ILS (internet listing services) will multiply your lead count. Optimizing your online listings with virtual touring options and online applications will also alleviate long-distance leasing concerns for renters searching remotely.
High demand is a good sign for the multifamily industry, but the market is in a constant state of flux as renters settle into new ways of living and working through the pandemic. With the right strategies in place, properties can avoid being blindsided when renters begin their migration to new opportunities..
Our data-driven solutions will help your property withstand market challenges and drive performance on social media, search, email, ILS and more.
Rachel Richardson is a Demand Generation Specialist with a mission to bring RentPath’s social media, marketing and communication efforts to life. She holds an MS in Brand Communications from the University of Colorado – Denver. In her free time, you can find her painting, boxing, baking, and hanging out with her calico cat, Aiva.