Landlords take note: Although millennials remain the largest group of renters, Gen Z, defined as people born between 1997 and 2012 (or so), is catching up. Gen Z renters just surpassed Gen X renters in 2020, making Gen Z the second most active renter group.
Just as all generations have defining characteristics -- Boomers are self-assured and competitive, Gen X'ers are independent and informal, millennials are tech-savvy job hoppers -- so does Generation Z. Find out what those characteristics are and how that might affect your rental business.
Gen Z is on the move
If you have vacancies, you're likely to see applications from Gen Z'ers this year. That's because they're moving like crazy. Of all renter movement in 2020, 23% of it is attributed to Gen Z, compared with only 12% two years ago.
The trend is reversed with Gen X and millennials who are moving less than they were in 2018: For Gen X, it's 18% in 2020 compared with 20% in 2018, and for millennials (still the largest group) it's 47% in 2020 compared with 53% in 2018. Can you see a trend here? Gen Z, if not today, will likely be driving the rental market in the near future.
Gen Z likes upgrades
Not only does Gen Z enjoy the finer things in life, they're willing to pay for upgrades. Their favorite items are a large balcony, hardwood floors throughout, a large bathroom with a glass shower stall, and granite or quartz countertops, according to J Turner Research.
Gen Z and the internet
By the time Gen Z children were born, everyone, not just academics, was using the internet. This generation, therefore, has no firsthand experience of a non-online world.
If information isn't on the internet, this group is unlikely to see it. So, not only do you need to market your properties on the internet, including social media, for Gen Z to see them, you also need to market your rental properties well by having a good internet presence. That means professional photos of your property are a must and, post-pandemic, so is a virtual video tour. This group might be leery of going inside places during the coronavirus, and besides, doing business virtually is second nature to teens and young twenty-somethings.
Use tech for your rental business
If you're an old-school landlord who still hands out paper applications and leases, you might want to get a tad more high-tech if you want to attract and relate with younger tenants. Gen Z expects to apply online, sign a lease using an e-signature, and pay rent electronically. If you manage a building, you should have a way to accept electronic maintenance requests, and if you own single-family homes, text messages work well for communication.
Be eco friendly
The Gen Z cohort is, probably more than any other group, environmentally aware. Being an eco-friendly landlord, while not the first thing renters look for, is becoming more important, particularly to this age group. So if you're thinking of making some improvements to your rental units, consider environmentally friendly ones, such as energy-efficient appliances, LED lighting, programmable thermostats, and a well-insulated home. You can also promote the walkability of your property.
Plus by helping the environment, you've created a win-win all around: You'll help environmental conservation and you'll make a positive impression on future renters.
The Millionacres bottom line
Gen Z is moving, and it's likely some will be interested in your rental properties. COVID-19, however, has forced many people from this group to move back home with mom and/or dad (about 2.2 million Gen Z'ers). The future is still uncertain, because, at the time of this writing, the coronavirus is still raging, but when life returns to normal and Gen Z'ers get steady employment, expect to have a slew of eager renters knocking on your door.