According to the most recent report from the Joint Center for Housing Studies of Harvard University, released in June 2017, vacancies in rental properties are currently at all-time lows. The report states that “vacancy rates for professionally managed apartments in early 2017 were under 3% in 20 of the 100 markets [MPF Research] tracks, and under 5% in 65 of those markets.”
In light of high occupancy rates, communities may feel comfortable taking a risk with their marketing strategy. They may shift their budget away from more traditional marketing channels, such as advertising with an ILS or using paid ads on search engines. Instead, they may invest in newer options, such as Instagram stories or Snapchat, or focus on their community’s website. However, when changing a marketing strategy, one needs to keep in mind that today’s renters use many different digital channels when searching for a new apartment.
For example, a renter may submit a lead directly from a property website. In response, that property may look to invest in the development and promotion of its own website in the hope of attracting new leads. At the same time, that property may cut its spending with other marketing channels.
However, today’s renter journey is more complex than ever before. Most renters start on a search engine, using broad terms related to location and possibly some basic amenities or needs. This search will typically lead those prospects to an ILS, where they can see multiple options at once and make comparisons more easily than if they were viewing individual sites.
From the ILS, renters create a shortlist of properties that fit their requirements – pet-friendly, has a pool, has units available in the size the renter needs, and so on. Then the prospect will begin a deep dive into research of the short list, looking at the websites of individual communities as well as social media and review sites.
Therefore, the true lead source often occurs earlier in the pipeline, even if the lead itself was not submitted until the renter was later in their journey. However, once a property is part of a renter’s shortlist, other marketing channels, such as Snapchat or Instagram, may take on significance. While not usually part of the earliest stages of a renter’s search, social media can influence the final decision. A strategic investment in using these channels is important, but it shouldn’t replace other valuable tools.
When occupancy is high, communities can take risks with their marketing spend. Newer marketing channels can target a renter who has already created a shortlist of properties. At this stage, a Snapchat video or Instagram story can be an important part of a targeted marketing strategy.
Vacancy rates are likely to remain low for the near future. The Harvard report states that “Growth in rental demand may, however, moderate as the share of households opting to rent appears to be stabilizing near 37 percent.” Before making any change in a multifamily community’s marketing strategy, evaluate its effect on the lead pipeline overall, independent of the current occupancy rate.