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Catering to the Next Generation of Renters

Generation Yers. Millennials. The Internet Generation. Echo Boomers.

Their labels have been controversial, but whatever you want to call them, they are those individuals born between 1977 and 2000, encompassing approximately 76 million U.S. residents¹. They are a group that has been defined by its obsession with popular culture, reality TV, and the Internet. Whether fresh out of a college dorm or their parents’ home, taking a summer internship, or starting a new job, many Gen Yers are becoming first time renters. They are young, enthusiastic, and come with a whole new set of needs and wants from their rental community than their predecessors.

Why are Gen Y renters so important? Because there are potentially a lot of them! Approximately 3.1 million people graduated from college this year². Of those numbers a significant portion are Gen Yers who left college dorms and became first time renters. Moreover, early Gen Yers, who are now in their late 20s and early 30s, have already been out of college for some time and possibly already settled into a career. This demographic is especially important because they represent a large portion of existing rental community residents who can now afford to upgrade to better apartments.

It’s no news that Gen Yers are technologically savvy. Because this generation was born into the computer age, technology is more than a luxury; it is a way of life. Gen Yers spend an average of 3 hours online per day³, which in turn means that they watch the fewest hours of television per week, averaging 10.5 hours in comparison to Generation X, which watch 15.1 hours⁴ per week. Naturally, their daily online usage will encompass researching the residential communities they are interested in, so the more unit information that a property management company can provide online, especially information on floorplans, virtual tours, and amenities, the more they will attract Gen Yers.

From their MP3 players to their gaming systems, Gen Yers’ interests are cutting edge and state-of-the art, so the more technology their apartment can accommodate, the better. They’ll want apartments that can house their hi-tech needs and most are willing to sacrifice living space for it. One apartment community in Washington, D.C., has tailored themselves to Gen Yers by offering loft style rental units, which are on the small side at a little over 600 square feet, but come with a multitude of community amenities such as a café, fitness center, billiards room, computer workstations built into every unit, Wi-Fi ready units, and easy access to D.C.’s metro system. They are just one of the many apartment communities in metropolitan cities around the country that are catering themselves to this important and growing demographic.

While a potential increase in revenue, as first time renters Gen Yers can also be a source of concern for some property managers, as they may be inexperienced about apartment living. This is why they should be encouraged to carry renters insurance. Personal budgeting probably being a concern, they will not be thinking about purchasing renters insurance on their own, or even why it could be necessary. It is necessary because a recent college graduate with an entry-level job probably cannot afford to replace everything they own if it was lost in a burglary, fire or explosion - even if they think their belongings don’t amount to much! In the case of most Gen Yers, their belongings can very well amount to quite a lot, in between their clothing, furniture, personal computer or laptop, software, or entertainment system. Considering that the average MP3 Player retails at $150, or a gaming system retailing at over $300, renters insurance adds up to a real bargain.

Many first time renters move in during the summer, as this is traditionally the time of graduation or summer internships.  Coincidentally, summer is a busy season for burglars.  According to FBI statistics, the greatest numbers of home burglaries occur in July, with August a close second.  In 2008, the average dollar loss per burglary offense was $2,079⁵. 

Personal liability is another factor first time renters may not be thinking about. They may not be aware that if someone is hurt in their apartment they can be liable for that individual’s injuries and medical expenses. If they accidentally start a kitchen fire and they do not have renters insurance, the property manager would have to tap into their insurance deductible to cover the damages to their unit or any others.

All renters, first time renters or existing ones, should be informed that renters insurance is a necessary part of apartment living. If your property does not mandate renters insurance, the best time to counsel a first time renter about the need for renters insurance is before lease signing, so they can budget appropriately. They may be less likely to obtain it later if they don’t feel they can afford it.

Encourage your renters to calculate the cost of their belongings and see how much the contents of their apartment are worth, so they can see how much they would really have to pay if they had to replace it all. There are many online tools that can do the calculations for them.

Gen Yers already outnumber the Baby Boomers. As they continue to age their buying power will continue to increase, and they will soon become the age group with the greatest spending potential. So there is definite profit to be made in catering to Gen Y renters and one of the ways to attract them is to accommodate to their unique needs. Advising them on renters insurance is just one of the ways you as a property manager are letting them know that you are putting their interests, and yours, first.

¹ America’s Gen Y, Demographic Profile
² http://www.thefiscaltimes.com/Issues/Life-and-Money/2010/06/08/Class-of-2010-Will-These-College-Grads-Ever-Find-Jobs.aspx
³ http://blog.ogilvypr.com/2009/10/understanding-generation-y-through-social-media/
⁴ http://diversityinc.com/content/1757/article/5017/
⁵ Crime in the United States, FBI, 2008