As time goes on, tenant preferences change. This is because technology changes, real estate changes, the economy changes, etc. There are many different factors that contribute to changing tenant preferences.
As a landlord or real estate investor, you might not think that changing tenant preferences are all that important because, after all, everyone needs a place to live. However, the bottom line is that if you are not on top of changing trends in the real estate market that are fueled by shifting tenant preferences, then it will be difficult for you to compete against other properties that are on top of these trends.
In this blog, we are going to break down some of the top trends in multifamily real estate that tenant preferences are currently creating.
1. Telecommuting Workspaces
With the rise of telecommuting that has taken place during the past few years as a result of COVID, it is natural that people would want telecommuting workspaces. 45 % of people now work from home at least once a week. Many people want workspaces in their buildings that are outside of their homes that have a desk and high-speed internet that they can use.
Catering to remote or semi-remote workers by having one of these telecommuting workspaces can help you attract tenants and beat the competition. High-speed internet is essential because many people have to be on Zoom calls, and good reception is critical for these calls.
2. Electric Vehicle Charging Stations
It’s no secret that more and more people are buying electric vehicles these days. Tesla helped to fuel the rise of the electric vehicle industry. But now many top automakers offer electric vehicles. In fact, Ford now even has an electronic version of the Mustang, the Mustang Mach E. Considering the fact that gas prices are rising rapidly, more and more people will likely switch to electric vehicles. This will only increase the trend of tenants wanting electric vehicle charging stations. So, you might want to consider adding some to your properties.
3. Online Payment Options
In 2022, many people, especially millennials and Gen Zs are used to paying for many things online. In fact, millennials pay 61% of their bills online. Many tenants now want easy options for paying their rent and other fees online. Additionally, they want options from their landlords to complete lease agreements online. In other words, tenants are starting to want their property rental's financial and legal aspects to be increasingly convenient. So, if you do not currently have an app in place for digital lease agreements and rent payments, you may want to consider implementing one to attract more tenants, especially millennials and Gen Zs.
4. Pet Spas
People have always loved their pets. However, many tenants now have higher expectations for pet-related amenities. In fact, pet spas are becoming a strong trend. Pet spas include things like dog-washing stations, on-premise pet sitters, on-premises groomers, and even on-premise dog parks. Many people consider their dogs, cats, and other pets a part of their family. So, the more amenities that a building has to accommodate the needs of pets, the better.
The world is becoming increasingly environmentally conscious and so too are tenants. Many tenants now have higher expectations for greenspace. This can include rooftop gardens, outdoor kitchens, etc. Greenspace can be included in units or in common rooms. Adding it can definitely help your property stand out in an environmentally conscious age.
6. Energy Efficiency
Just like electric vehicle charging stations, energy efficiency upgrades will become increasingly important in the near future. This is because the war in Ukraine will most likely keep energy prices high for the foreseeable future. So, more and more, tenants will be looking to rent properties with energy efficiency upgrades such as new windows, insulation, and other measures to keep energy costs down.
7. Bike-Related Amenities
Many people use bikes to get around, and the amount of people who use them is only likely to significantly increase due to the increase in gas prices. This is especially true for people who live in cities. However, suppose your multifamily property does not have bike-related amenities. In that case, it can be a major inconvenience to tenants who want to use their bikes on a regular basis. There are a number of bike-related amenities you can add to your property to help you please your bike enthusiast tenants. For example, you can add bike storage, bike repair, bike-sharing, and even bike paths.
8. Smart Home Features
Smart home features can help to increase safety and convenience while preventing energy-wasting. Smart home features can include smart lights, smart thermostats, smart appliances, etc. Tenants like these features because it helps them have more peace of mind. With smart home features, tenants have the ability to check in on their home and adjust lighting, temperature, etc., from their phones. This is highly desirable for many people and is a growing trend in multifamily real estate.
9. Wellness-Related Amenities
This can include an on-premise spa, gym, yoga studio, massage center, etc. Many people are under tremendous stress between the pandemic, the lockdowns, inflation, rising energy prices, and now, the breakout of a major war in Europe. As a result, tenants are starting to look for multifamily properties with wellness-related amenities. So, if your building has some unused rooms, consider converting them into a yoga studio, a massage center, a gym, or a spa. This can help you to attract tenants.
10. Package Lockers
A mailbox just isn’t good enough anymore. Because of the pandemic, people are ordering packages online more than ever. This is because people don’t necessarily want to go out and risk getting COVID to shop when they can just shop online and remain in the safety of their apartments. Package lockers make it a lot more convenient for people to order packages online without getting lost or stolen along the way.
The more you cater to the needs and preferences of prospective tenants, the easier of a time you will have filling your vacant units. Real estate investors need to stay up-to-date with developing trends in the multifamily property industry. We have provided you with ten of the most important trends for 2022. The more of these trends that you can capitalize on, the better!
Not all real estate investors and property owners will be able to capitalize on all trends. However, even if you can just add a couple of things to your property to take advantage of these trends, it can help. For example, adding package lockers or bike storage is relatively easy. So is adding online payment options. So, it might take a little bit of time, money, and energy to make some changes, but adapting to any of these trends can help you to get a leg up on your competition. Being able to fill units faster by capitalizing on trends is good for business and prevents you from losing money with empty units.
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About the Author
Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.