2023 was a volatile year for the multifamily industry.
Demand patterns and rent prices returned to a post-pandemic normal, but apartment communities' operating expenses skyrocketed while nationwide occupancy rates declined.
Additionally, the supply of new units entering the marketplace drove up competition and gave renters more control in choosing where to rent.
Those issues are setting the stage as the industry turns the calendar. How will they impact your communities' plans to attract, attain and retain residents? Let's look deeper at the challenges owners and operators face in 2024 and how to overcome them.
Challenge #1: 2024 will be another record-breaking year of new unit deliveries.
According to Yardi Matrix, an additional 500,000+ new units will enter the marketplace in 2024, giving renters the upper hand by having more apartment choices than ever and undeniably impacting your existing communities' ability to attract new residents.
Solution: Ensure your apartment's digital marketing presence remains competitive by letting renters see the inside of your units.
The opening of a new apartment community nearby is less threatening when your apartments' digital marketing presence prioritizes the needs of prospective renters. You'll stand out in 2024 (and beyond) and make it easier for renters to choose your community when you make it possible for every renter to see the inside of the specific floorplan or unit they're interested in on your apartment's website and other online channels.
Challenge #2: Turnover costs are on the rise in 2024.
According to Jay Parsons, rental housing economist at RealPage, turnover costs have more than doubled since the COVID pandemic hit and can "easily exceed one month's rent" of that unit. Alarmingly, the rising costs do not factor in marketing expenses or vacancy loss.
Solution: Make resident retention a priority by focusing on your renewal strategy.
Your lease renewal strategies in 2024 will be critical as you combat rising operational expenses. Treat renewal pricing as crucially as you would for a new lease and include any concessions, if necessary, such as offering renewal rates below what the current resident is paying.
Additionally, you must provide an excellent resident experience, as that, above anything else, is the best method for ensuring more residents choose to stay.
Challenge #3: Apartment marketers must generate leads with smaller budgets in 2024.
Many are responding to the increasing expenses of owning and operating a multifamily property by tightening their budgets, which sometimes include marketing and advertising. The fear is that reducing marketing investment could also reduce lead counts.
Solution: Develop the right mix of marketing channels for producing better-qualified leads.
Even though it may feel that you need more marketing tools and higher budgets these days to manage multiple channels, the truth remains that there's a very typical pattern by which renters discover, engage, and eventually select an apartment. We call it the "Leasing Funnel," or the mix of apartment marketing channels you can apply that puts your community front and center throughout a prospect's search.
The Leasing Funnel
Following the Leasing Funnel as you establish your multifamily marketing plan for 2024 will make your marketing expenses more efficient and help prospects discover and learn essential information about your community online and feel more comfortable with making the life-impacting choice of where to rent an apartment.
Takeaways
- New Unit Boom: 2024 will see a record influx of new apartments, increasing competition and requiring stronger digital marketing with floorplan-specific visual content showcasing the inside of your units to stand out.
- Rising Turnover Costs: Combat skyrocketing turnover costs by prioritizing resident retention through competitive renewal rates and an excellent resident experience.
- Smaller Marketing Budgets: Optimize marketing efforts with the "Leasing Funnel" strategy, focusing on the right mix of channels to attract better-qualified leads while maximizing efficiency and return on investment.