What’s the best bait to hook renters?
“In the ’80s, it was whoever could come up with the best tennis court, the slickest resort pool,” says Laura Rowley, editor of Multi-Housing News in New York. Today renters are turned on more by an on-site ATM machine than a fancy pool or party room.
The renter profile has changed drastically in the last decade, causing apartment-building owners and managers to scramble for amenities that will attract–and retain–tenants.
People are lingering in the rental ranks, delaying marriage and homeownership. Thus, today’s renters tend to be older, more affluent, more sophisticated and more demanding than those a decade ago.
Consequently, quality has improved substantially, particularly in upscale apartments that are trying to lure lifestyle renters.
“Apartments are offering a lot of amenities you used to find only in a house,” says Jonathan Kempner, president of the National Multi-Housing Council, an association of apartment building owners and managers based in Washington, D.C. On the hit list of homey touches: 9-foot ceilings, crown moldings, wine racks, full-size washers and dryers, better cabinetry and upgraded finishes.
Just like home
The trend toward homelike apartments is reshaping common areas as well. Instead of glitzy contemporary lounges, lobbies are now featuring fireplaces and more traditional decor. “Clubhouses were showplaces for years; now libraries are going in and these spaces are really being used,” says Anne Sadovsky, an apartment consultant in Dallas.
Some innovative apartment buildings are transforming portions of their clubrooms into theaters, complete with graduated seating and popcorn machines. Sadovsky chalks it up to cocooning: “Anything that contributes to a sense of comfort will go over big with renters.”
Although some amenities are found only in new, upscale projects, more comforts are starting to trickle down. “Rehabbing has to be more than new carpeting and wallpaper,” stresses Sadovsky.
If apartments appear larger, it’s not an optical illusion. “Today’s renters have more possessions and are looking for more space–to store things as well as more space to entertain in,” observes Tom Bozzuto, head of the Bozzuto Group, an owner and manager of apartment buildings in Greenbelt, Md.
In the ’80s, a one-bedroom apartment was about 600 square feet, but today a new one-bedroom unit is more likely to measure 750 or even 800 square feet, experts estimate. Two-bedroom apartments, formerly 1,000 square feet, are now averaging 1,200 to 1,400 square feet.
Time-pressured tenants appreciate any amenity that translates into convenience or service. “The apartment industry is looking to the hotel industry for inspiration.” says Rowley. “People want landlords to take care of things they traditionally didn’t take care of.”
Chicago-based Draper & Kramer has been providing complimentary continental breakfasts and box lunches to tenants on occasion. “From a service perspective, we want to make them so comfortable that they never want to move out–either to competing buildings or to buy a house,” says Frank Livingston, senior vice president at Draper & Kramer, which manages 23,000 apartment units in the Midwest.
And in buildings staffed with garage attendants, Draper & Kramer offers tenants gas, oil, air, and–in subzero winter months–windshield fluid.
Attached garages have become almost a standard feature in suburban garden apartment projects, says Rick Cavenaugh, president of Prime Residential Inc., a Chicago-based REIT (real estate investment trust) owning 37 apartment properties. Brookdale Lakes, an apartment community built four years ago in Naperville, was one of the first to feature attached garages in the Chicago area, says Cavenaugh. Attached garages are not only a convenience, but also provide additional security for tenants.
And security is an escalating concern among today’s renters. In response, apartment building owners are installing more lighting, perimeter fencing and steel entry gates.
Technology is helping beef up security, observes Tim Peterson, senior vice president at Post Properties, an Atlanta-based company that owns and manages some 15,000 rental units in the Southeast. “Master keys are the antichrist of the apartment industry,” says Peterson. To prevent keys from falling into the wrong hands, Peterson’s firm uses a computer-controlled system safeguarding its keys. The system requires staff members to log in the date, time and person entrusted with the key before the key drawer will unlock.
Technology is also enabling apartment owners to offer some new conveniences. At Post Properties, tenants can obtain a card with a computer chip that operates laundry machines. Residents have to pay for the card, but it eliminates that frustrating search for quarters that can keep dirty clothes from coming clean.
In many ways, technology in the apartment arena is still in its infancy. But more is coming down the pipeline, say experts.
“Everyone is either on the Internet or feeling guilty that they’re not,” says Kempner. It’s important for apartment buildings to demonstrate they are technologically advanced, he says.
Much of the current technology being introduced into apartments is through home office amenities. “People are looking for the flexibility that allows them to work out of their home,” explains Bozzuto. “We find that 30 percent of renters work out of the home at least part of the time.” His firm is equipping all of its apartment units with four telephone lines: two for calls, one for a modem, and a remaining line to ensure future flexibility.
More apartment complexes are adding business centers to properties, making computers, fax machines, copy machines and conference rooms available to tenants.
Still, some apartment innovations are high-touch rather than high-tech. Post Properties has set aside land for tenants to use as vegetable gardens. Plots are awarded to green thumbs through a lottery system, since response has been greater than anticipated. Renowned for its landscaping, Post Properties also arranges to have professional landscapers host gardening clinics for residents.
Bicycling and jogging trails are something renters have been asking for, says Rowley, referring to a recent survey her publication conducted last year.
Still, although opportunities for outdoor exercise are in demand, fitness centers continue to be important. “We used to just dedicate a room and stick in some equipment,” says Frank Miller, president of JPI Companies, a large owner, developer and manager of apartment buildings in Irving, Texas. However, more thought and detail go into designing fitness centers today, says Miller. State-of-the-art equipment is installed and personal trainers are made available to residents periodically.
Overnight guest suites are a new innovation proving to be a big hit with renters. Apartment buildings make certain units available to tenants for overnight guests. The suites are rented on a first-come, first-served basis. Although fees vary from property to property, they are structured well below hotel rates for the area, say apartment owners.
“Some house guests are more wanted than others,” explains Peterson tactfully. By offering alternative housing for guests, management helps residents save face–and sanity. Endearing themselves to tenants with pets, some apartment buildings are offering a kennel service of sorts. Staff will walk and feed pets while residents are away on long trips. A fee is charged, but is typically less than a kennel. Again, the goal is to provide greater convenience to tenants, says Bozzuto.
Catering to travel-oriented tenants, Bozzuto has initiated another service: Residents can arrange to pay rent through credit or debit card. “It’s a convenience, they don’t have to worry about writing a check,” explains Bozzuto.
Bozzuto also allows tenants to split their rent into two payments–to avoid being cash poor half of the month. Residents opting for this schedule must pay a slight premium–about $10 per month–to offset additional accounting charges.
Warned that this would encourage delinquencies, Bozzuto happily reports that the reverse has actually happened: Delinquencies have dropped about 30 percent.
Finding the right hot buttons involves a lot of common sense. “This does not require the intellectual finesse of nuclear science,” says Bozzuto.
Nor is it all bells and whistles. Staff attitude is as important as the right amenities, stresses Cavenaugh: “It takes months to find a new resident and only one minute to lose one.”
Peterson tells a story about a tenant at a store trying to buy a bicycle with a check. But, the man had left his driver’s license at home. The resident called the management office and a staff member secured the keys to his apartment, located the driver’s license and faxed a photocopy of it to the store. It took a few minutes but went a long way toward making a good impression on the resident, says Peterson.
“We’re not in the apartment business, or even the development business as much as we’re in the service business,” concludes Peterson.
If what they say is true, today’s renters can look forward to a lot more TLC.
