It’s a Millennial World … Or Is It?

It's a Millennial World

For quite a few years now we’ve been told that we need to build for and market to the Millennial generation. Many have jumped on the bandwagon and are building nothing but smaller apartments (to try to keep absolute rents down while still meeting the rent per square foot investors are seeking) in urban locations with marketing/advertising campaigns geared mainly towards those between 18 and 34 (one of the definitions of the Millennial generation).

If this is your current strategy, stop for a moment and take a look at your submarkets and the demographics within as you might be missing out on and ignoring a huge opportunity. Although, according to numerous sources, Millennials will surpass Baby Boomers this year as the largest cohort, Boomers still make up close to the same percent of the population as Millennials (and we forgotten X’ers are only a couple of percentage points behind). And, guess what? Boomers (and X’ers), in general, are more established and so have the income to afford the higher rent apartments.

Millennials may remain renters for a while because after having watched the housing bust they may still be cautious about buying, or may not yet be at an income level that allows for it. Boomers (and X’ers), on the other hand, are making the conscious choice to give up home ownership for what they view as a more “free” lifestyle of renting. The influx of Boomers to the Multifamily Market has begun. When you add their numbers to Gen X’ers who choose to rent, you have a substantial amount of income available to support the rental market.

Some statistics from a current lease up that is 2/3 leased support this movement. This community is 360 units with an average apartment size of over 1000 sq ft and average rents closing in on $2700 in a suburban town center location.

• 77% have been leased by those 35 or older (66% 40 or older)

• 37% have sold homes to move to the community

• 57% have annual household incomes of $125,000 or higher

• 21% are retired.

The good news is that all of the varied generations are looking for some of the same things: convenient, often walkable location, amenities/social opportunities, up-scale design, technology that simplifies their lives, pet-friendliness and more.

From a product standpoint, the differentiator is the size of apartments being sought. The older generations are downsizing, and to them, even an apartment that is 1500 sq ft is small. If you are located in a submarket that supports multiple generations, pay a lot of attention to your mix, and your rental rates. Have the larger apartments for those who want and can afford them, and look to see that if by doing so, you can keep some of the smaller apartments at more affordable rates than you might otherwise have been able to. Remember…. those Millennials will increase their household size (and income) at some point and also need those larger apartments if they choose to remain renters.

Where you may see greater differentiation is with the programs and services you offer, how you present your marketing, and in the direction some of your customer service efforts may need to go.

From a marketing perspective, you’ll need to make sure that you are really using a mix of media that will appeal to all the applicable generations; but don’t think that digital formats preferred by the younger set won’t work for the Boomers, you may just need to modify how you are using them.

Facebook advertising works well across the board. In looking at Google Analytics, Facebook is consistently a top 10 driver of traffic to our websites regardless of the differing resident demographics. Run a couple of different campaigns adjusting graphics, messaging and targeting information to ensure that you’re reaching all of the different demographic groups that make up your resident profile (or that you’d like to you’d like to attract to your community). There are some additional cool ways that you can use Facebook advertising. You can put your prospect database into the Facebook advertising platform allowing you to re-market to these customers with Facebook ads. You can also put your resident database in and work within the platform to market to Facebook users who are “like” your residents. Facebook advertising is relatively inexpensive, so play around with it some to find out what works best.

Real Estate driven sites are also showing a great deal of promise and/or results across demographics in many markets. Zillow has done a great job of building their urban multifamily footprint and bringing the Millennial renter into their site. We’re also seeing results from older demographics in more suburban locations where people are selling homes to transition to the renter lifestyle. One can assume that this may be due in part to the fact that Zillow started out on the home side and so this demographic is already familiar with using the site.

Video use is key among all demographics. In addition to giving a broader view than a photo of what your community is about, if you shoot resident events and include testimonials you add lifestyle which is such a large part of apartment living today. We know that our customers are using review sites; letting them hear what your residents have to say can have such a positive impact to your marketing

efforts. Numerous sources demonstrate that video content is shared at higher levels than other types of content on social media sites. And…. people do search YouTube for apartments. Recently one of our properties shared with me that one a couple in their 70’s who had recently rented at the community found them initially on YouTube…. It was the only site that their children had taught them to use for search.

You should all be doing it anyway (FHA guidelines), but make sure that across your marketing campaign you’re representing multiple age groups. Find that fine line between “horsey” font size, and “too small for old eyes to read” font size for your marketing materials and digital presence.

Review sites have been a part of our world for a while now, but they too, are now a “source” used by varied demographics. People are searching Yelp for apartment communities, and if you maximize your listings on this site by using their business listing program, you can drive qualified traffic and rentals to your websites. Using this program provides you with the opportunity to put a larger call to action button on the listing which you can link to whatever you would like. You get access to reporting that gives you great insight as to who is searching on Yelp. We’re seeing good results among the different demographics already and are just about to dip our toes into their paid search program.

We could “talk” forever about some of the newer/ different forms of advertising out there as we’re seeing changes somewhat frequently. The above are a great place to start and are showing some solid results.

Marketing encompasses so much more than advertising. To maximize your multi-generational marketing, you need to make sure that you’re adequately touching all areas related to marketing.

From a programs standpoint, you’re going to want to make sure to “activate” your property as much as possible. The Millennials may enjoy it, but are probably not going to be home enough to take part in much. The Boomers and X’ers will appreciate the opportunity to have things to do close to home. Make sure to have as many partnerships for services as possible (maid service, auto-detailing, etc) as well as suggestions for apps (I’m a fan of Instacart) that will make your residents’ lives easier. They’ve worked hard for their money and have probably also worked hard to maintain a home. They have disposable income and aren’t afraid to spend it if it makes life more enjoyable for them.

Adjust your customer service focus to understand that many of these renters have NEVER rented an apartment before as it wasn’t “what you did” when they were younger. As a result, they are uncomfortable with much of the process and may need more “hand holding” than those who have rented at some point. This is a great opportunity as if you gain the trust of the more mature demographics at this point in the process, they’re probably not likely to move any time soon.

Put away that bandwagon… Multifamily today is a Boomer, X’er, Millennial (and soon Gen Z will be sneaking in there) World and your marketing needs to speak to all of them!