CoStar Insights

Technology has Changed the Way Renters Find Apartments, Forever

by John Hogan | Aug 01, 2016
Tech and ILS
I spent some time today thinking about how I would purchase an airline ticket before airline search engines and airline websites existed. I got a migraine when I thought about getting out the yellow pages to call several of the major players, com - paring quotes, calling the airline with which I ultimately decided to book my voyage, feeding the airline’s associate my credit card number over the phone, and then waiting several days for the tickets to arrive via snail mail. At least that’s how I think it happened. I can’t remember, but the hold time alone seems enough to fill up an entire workday. 

There is no debate that technology has changed the way we live. Today, 93 percent of consumers do research online before buying a car. That’s because the prospect of spending an hour online researching ten makes and models as a starting point turns out to be way less awful than spending an entire weekend visiting ten dealerships, each with ten sales associates ready to tell you anything to get you to bite. Not to mention the internet offers easy access to unbiased, third-party reviews and competitive pricing via websites to empower you with the information you need to negotiate the best deal. 

Moreover, 61 percent of adults now use online banking—a number that’s sure to increase swiftly over the next few years. Even if balancing your camera phone just right to snap a picture of a check for mobile deposit is sometimes tricky, it beats going to the bank 11 times out of ten. All that to illustrate that technology has changed and will continue to change nearly every industry, and it’s no different for the multifamily industry. The days of picking up an apartment listing guide at the grocery store or getting your hands smeared with ink as you fumble through the classified are long gone. Due to the Internet Listing Services (ILS), the apartment industry has joined airlines, hotels, rental cars, entertainment, sporting events, online retail, and the stock market in publishing reliable, up-to-minute inventory and pricing information.

According to a study conducted by Apartments.com and Google last year, 72 percent of Americans turn to the internet first when searching for an apartment. It’s the same principle as shopping online for a car. Why visit seven or eight apartment buildings when a little bit of online research can help you narrow your choice to two or three and save you a lot of time and effort?

The study, titled “Online Search Behavior and Trends of Apartment Renters,” found a striking two-thirds of respondents rented an apartment they first found online. A quality ILS gives renters all of the basic information they need to know: price range, location, pet policy, etc. 

Conversely, less than half of apartment renters use a real estate agent, and even of those that did, 87 percent said they per formed their own online apartment search at some point. 

The takeaway: multifamily professionals who don’t advertise their communities online are doing themselves a severe disservice. 

That doesn’t mean that generating renter leads is as simple as just having any online presence. The study also revealed that not all online advertising is created equal. For example, 50 percent of respondents who search online for an apartment use their smartphone to do so. If your online advertising isn’t optimized for mobile, or if it isn’t available via a mobile app with a sleek user interface, its effectiveness will be cut in half. 

But as much as renters want ease of use, they also want content. The study found that if renters encounter multifamily data that isn’t relevant to their lifestyles or needs, they’ll redirect to other online resources which have the information they’re after. 

So, what sort of content makes for the most effective multifamily advertising? Today’s renters are looking for details that illustrate not only where they’ll live, but the experience they’ll have while living there. Among a few must-haves: 

Visuals, visuals, visuals. Of course, potential renters expect to truly see where they’ll be living before they even set foot on the property. That’s why virtual tours and photography are becoming a must-have during any apartment search. From the doorway to the bedroom to the closets to the kitchen to the property outside, photos must be plentiful, high quality and accessible. 

Reviews. There’s nothing more powerful than a user review because it’s third-party and unbiased. How quickly do maintenance requests take? What are the other renters like? Does the gym get too crowded at certain times? 

They want to map out their daily routines. New ILS innovations allow potential renters to estimate their work com - mutes, time out their schedules based on distance and traffic, determine the most convenient transportation routes, and locate key staples like gyms and coffee shops along the way. 

They want to know the critical information up front. Are pets allowed? Is there a dog park? A swimming pool? A nearby grocery? Where are the best places to dine and relax? ILSs need to provide this information up front in order to hold a potential renter’s eye. 

They want to know the bottom line. New apps like cost calculators can help prospective renters understand the full cost associated with their move and tenancy—allowing for the right rental decision and a good fit right off the bat. 

Most people spend between 30 to 35 percent of their income on rent every year—and even upwards of 60 percent in urban areas. For many of these people, where they decide to live is the most important financial decision they make. With the rapid technical evolution achieved by apartment listing services in the past two years, no other venue does a better job of meeting consumer needs.

The piece originally appeared in the June Issue of Apartment Journal.
 
 

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