January 14, 2016
2016: The Year of the Millennial
As we look to the year ahead, will it be “business as usual” or will some new technology, trend or twist come along and disrupt everything you thought you knew about property management? In this continuing series, we poll industry experts, pundits and thought leaders to get their insights into how the property market is evolving, their most pressing operational priorities and how they plan to stay competitive.
Millennials, or people born after 1980, have recently become the largest generation in the Canadian workforce, and according to PricewaterhouseCoopers, by 2020 Millennials will comprise half the global workforce. And, by 2017 the Millennial generation is expected to have more buying power than any generation that has come before, including Baby Boomers. The sheer number of Canadian Millennials is having, and will continue to have, a profound impact on the property market.
As “digital natives”, Millennials have grown up with technology. Social networks are an ingrained part of everyday life. The ability to text, get instant answers and have seamless user experiences are “table stakes” – no longer nice-to-haves, but a minimal entry requirement.
The Connected Generation
“More and more real estate information is going digital, into the online space; search and having the properties found are key. Today, north of 90 percent of renters start their search online for an apartment,” stats Chaim Rivlin, President and CEO of RentSeeker.ca. This represents a golden opportunity for REITs, property managers and landlords. However, Rivlin cautions that historically, the property industry has not been technology-driven from a resident point of view and that “renters can only be as digital as the landlords.”
In the age of social networks and search engines, property industry companies must be as connected as prospective tenants.
“Millennials are especially socially active. And, many property management companies are really starting to embrace Twitter, YouTube, Pinterest, Instagram and other networks,” says Rivlin. “From our own perspective, 30 percent of RentSeeker.ca’s traffic comes from social media.”
Craig Hatt, Director, Asset Management at GWL Realty Advisors, stresses the importance of reputation management in this new online competitive environment. He states, “Millennials want to know who they will be renting from, so a corporate website and social media can help promote the individual units as well as the reputation of the brand.”
Millennials want the 24/7 convenience that digital offers – from being able to search for their next apartment to paying their rent online through their phone, tablet or desktop. Tasks that were typically paper-based, like work orders, or performed manually are now being moved online or to the cloud-based portals for ease of use, cost savings and better accountability.
And, issues that weren’t even on the radar less than five years ago, are now being pushed to the forefront. Derek Lobo, CEO of Sperry Van Ness/Rock Advisors, Inc., points to the Millennials’ love of ecommerce, noting that property managers and concierges can be inundated with hundreds of package deliveries per day. Rather than drain human resources, Lobo notes that you “need an digital system to notify residents so they can be notified when a package has arrived so they can pick it up.”
This new demographic isn’t just impacting technology, but amenities as well.
Lobo notes, “The 20- and 30-somethings are educated and have a good income, but simply aren’t enamoured with home ownership. However, they want the quality and luxury found in top-end condo or hotel.”
From wow-factor gyms to communal lounge areas to on-site cafes, Lobo says that in 2016, for Millennials, amenities will be “the sizzle on the steak.” Craig Hatt agrees noting that Millennials want upscale finishes and a better return for their money. In short, they are looking for “modern units that are in line with their tastes and expectations.”
“Ten years ago, people made rental decisions based on location and affordability. With the condominium boom, there’s more choice, and Millennials are more discerning,” states Hatt. “To stay competitive and to continue to see the returns landlords want, reinvestment into existing portfolios will be a much bigger trend in 2016.”
Stay tuned for upcoming articles that continue to explore how property managers and industry experts are evaluating and acting on shifting demographics, competition, operational and marketing concerns and other issues and trends.