The War For Tenants Is Heating Up. What Steps Can Developers Take To Win?
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Multifamily construction is on the rise and, in some states, even outpacing the construction of single-family homes. While demand for apartments is expected to remain strong, as the pool of multifamily buildings continues to grow, so does the competition to attract and retain tenants.
“As the industry evolves, it is important to stay ahead,” said Steven Levin, Mega Supply Pro senior vice president of procurement. “Some developers are keeping up with the times, but others aren’t doing enough to differentiate their buildings from the competition.”
Levin and his team at Mega Supply Pro work to help developers find the construction materials and finishes they need to compete in today’s market. He gave Bisnow a rundown of the steps he believes property owners can take to encourage tenants to choose their building.
Install Easily Serviceable and Attractive Appliances
Developers often work to attract tenants by installing new appliances. Levin cautioned that while new appliances can be a huge draw for tenants, developers need to do their research and make sure they are not lured by brand names alone.
“Not all big-name appliances are created equal,” Levin said. “It’s important to shop around for appliances with a reputation for being durable, as well as easily serviceable. It may take extra effort to research what will work best for your project, but the time invested will pay off.”
He added that not all big-name appliance companies are known for customer service, and when something breaks it can be impossible to get it repaired, leaving property owners with no choice but to replace the unit.
Rental property owners should care especially about durability, Levin said, since tenants may not treat the appliances in their rental apartments with the same care that they would with appliances they own. Consider installing panel-ready appliances as stainless steel refrigerators tend to get dinged up and scratched.
Invest In Smart Technology
Property owners can also set their buildings apart by offering smart home technology that enables tenants to control thermostats, locks and lighting with the touch of a button — and renters may be willing to pay more for the convenience this tech offers.
A Schlage and Wakefield Research survey found that 86% of millennials are willing to pay one-fifth more for a smart apartment, while 61% are more likely to rent a unit if it offers electronic access features like keyless entry.
Consider LED Lighting
When it comes to apartment lighting, Levin explained that some developers have gravitated toward installing electrical outlets throughout a space for lamps, as opposed to installing light fixtures in each room, in an effort to reduce costs. He said that this might not be the best move, since he has found that tenants prefer the convenience of light fixtures over the hassle of purchasing lamps.
Levin recommended that if developers want to cut costs while keeping tenants happy, they should instead install LED light fixtures, which use 75% to 80% less energy than incandescent bulbs, saving consumers as much as $75 per month. These environmentally friendly bulbs could be an additional boon for tenants, since research shows that people are drawn to buildings that make the effort to install environmentally conscious features.
Levin added that along with reducing a building’s environmental impact, just one well-placed LED fixture can make an apartment feel brighter and more welcoming.
“Well-designed lighting adds character and convenience, making a space more appealing to potential renters,” Levin said.
Install Quality Plumbing Fixtures
While there are often opportunities to cut costs during construction, Levin said that when it comes to plumbing fixtures like showers, faucets, sinks and bathtubs, developers should always prioritize quality.
“Experienced developers know that cheap fixtures aren’t cheap,” Levin said. “Budget contractor-grade fixtures tend to be very low quality and end up forcing owners to spend more later on repairs and replacements, while providing an inferior user experience.”
Keep Functionality In Mind
Levin said that above all else, the key to attracting and retaining tenants is to focus on functionality.
“Put yourself in the renter’s shoes and try to simulate the living experience in as much detail as possible,” Levin said. “Think of the kind of space you would want to live in and all of the amenities, fixtures and appliances it would take to keep you renewing the lease year after year.”
Two ways to create a functional space are to make sure an apartment has ample storage space and well-spaced electrical outlets in each room.
Creating high-quality spaces can be overwhelming and time-consuming, but companies like Mega Supply Pro can help. Mega Supply Pro specializes in sourcing and delivering construction materials, helping developers find the perfect materials and finishes, and coordinating on-time deliveries to job sites.
“We want to help forward-thinking developers evolve with the times and find the materials they actually want to create the types of spaces that will attract tenants both today and for decades to come,” Levin said.
This feature was produced in collaboration between Bisnow Branded Content and Mega Supply Pro. Bisnow news staff was not involved in the production of this content.