Evolving Demographics: The rental market is shifting with more Gen Z and millennial renters, who value digital communication, immediacy, and tech-driven home amenities.
Younger renters, particularly those from Gen Z (born between 1995 and 2009), are already having a significant impact on the rental market and influencing decisions made by property owners. On the horizon, even more of these youngsters are about to become tenants. According to the U.S. Census Bureau’s Current Population Survey, there are an estimated 17.2 million people in the country between the ages of 16 and 19 — more than at any point in history.
Already the primary driver of rental demand growth (move over, Millenials!), Gen Z headed 7.9 million renter households in 2022. As a result, property owners must keep up with the youngsters’ preferences, attitudes, and lifestyles in order to secure their tenancy. Have no fear – the kids are more than alright as they steer the American rental industry towards a highly intuitive, automated, and efficient touring and leasing process that spares everyone involved the redundancy and tediousness of outdated ways.
1. They want minimal human interaction and more mobile-friendly tech.
A Forbes survey of over 700,000 consumers calculates a striking statistic regarding interaction with sales representatives. While this isn’t a direct comparison to rental tours, it’s close enough to apply the findings to how potential tenants feel about their tour guides. The survey shows that 72% of B2B buyers across the board prefer zero interaction with sales representatives – which would mean an even stronger aversion for Gen Z and Millenials.
For the real estate industry, this means migrating towards better self-guided and virtual tours, fostering the independence with which younger tenants prefer to operate. Keeping things low-key and chill, they prefer low-pressure situations when it comes to high-stakes decisions, and the lack of in-person supervision makes the self tour a fitting development as they inherit the majority power of the renting population.
2. They’re confident in their research skills and self-education, and expect immediate results and delivery once they’ve made decisions.
“Digital natives” are used to moving at their own breakneck speed when it comes to decision-making. Like the high-speed internet they use for research, once they’ve decided to make a move towards reaching a goal, they expect a speedy delivery or response in return.
From their perspective, many milestones in the traditional rental process are perceived as unnecessary stoppages. This includes the waiting period between reaching out for availability of a unit, followed up with the back-and-forth communication required to agree upon a mutually available appointment time, as well as waiting for that appointment time to arrive. Streamlined appointment-scheduling processes can be found in virtually every industry at this point, and any deviation from that preferred process begs the question, “Why is this so hard?” and leads to the eyeroll-accompanying thought, “I should just be able to pick a time slot on my phone, without having to deal with anyone.”
3. They’re rolling stones with high-end taste.
Prospective tenants often have a list of criteria they are looking for in a rental property. If your showings fail to provide enough detailed information about the property, the surrounding area, or lease terms, tenants may feel uncertain and look elsewhere. Information gaps can create doubts and reduce the perceived value of your property.
Solution: Prepare comprehensive information packets for showings, including details about the property’s features, amenities, lease terms, and neighborhood highlights. Be prepared to answer any questions and provide additional insights. Educated tenants are more likely to feel confident in their decision to rent your property.
This shift may lead to more longer-term renters, or it may indicate more frequent turnover as Gen Z prefers remote work and long-term travel opportunities enabled by shorter leases. Regardless of how long a renter intends to settle in one unit, this indicates to property managers that less renters are planning to turn into homeowners down the line.
With their digitally native status, and cultural trend of advocating for and insisting upon the worth of their labor, “lifestyle renters” are earning more than ever. Yet despite being hypothetically able to afford home ownership, young high-income Americans seeking higher-end rentals in larger multi-family buildings opposed to buying single family homes. As evidence, the number of renter households earning over $100,000 per year more than doubled between 2012 and 2021, reaching 7.2 million.
Conclusion.
These trends indicate that younger renters, particularly Gen Z, are reshaping the rental market. Property owners are responding by adjusting their development strategies, amenity offerings, and management practices to cater to this growing demographic’s preferences and needs.
When it comes to the kinds of housing desired by Gen Z, the answers fall in line with their lifestyle preferences – amenity-rich, community oriented, and flexible spaces. Preferring to work remotely, tech compatibility is often a dealbreaker as their home must serve the dual purpose of their workspace. To attract younger renters willing to pay premium prices, property managers should be investing in smart home technologies and mobile-friendly rental platforms that replace manual processes with digital solutions and modern conveniences.
Citations
Chandan Economics. (2024, March 8). Generation Renter: Why the Multifamily Pipeline is So Promising. Arbor Realty. https://arbor.com/blog/generation-renter-why-the-multifamily-pipeline-is-so-promising/
Illig, R. (2022, June 8). Bad news: no one wants to hear your sales pitch. Good news: there’s something you can do about it. Forbes. https://www.forbes.com/sites/randyillig/2022/06/07/bad-news-no-one-wants-to-hear-your-sales-pitch-good-news-theres-something-you-can-do-about-it/
Maher, L. (2024, January 10). Modern Property Tours. InstaShow. https://instashow.app/self-tours-vs-virtual-tours/
