It’s no secret that the way people look for housing has changed significantly in the last decade. Tens years after the start of the housing crisis the industry outlook has improved significantly. While growth is happening in the housing industry, it’s shifted into different sectors due to a number of factors. While individual housing markets have seen an upswing, millennials are waiting longer to buy homes than their parents. Many are opting for rental properties in more urban settings.
Some of them have moved to the city to be closer to employment, while others simply like the lifestyle that urban areas provide. Whatever the reason, there is a glut of renters hitting the market, and developers are racing to meet the demand. The New York Times reported that New York City alone will see an increase of close to 24,000 new rental units by the end of 2017.
In previous years the industry had been slow to adopt technology mostly because, early housing and real estate tech were geared towards a single constituent group, like property managers, or renters. Each new solution would eventually struggle because it failed to create value for all interested parties.
Recently, however, there has been a new wave of tech innovation targeted specifically at the rental market, that’s making it easier for rental hunters to find the right property, and property managers to find ideal candidates. These are some of the ways that tech is modernizing the space to meet the increased demand.
Listing systems give way to concierge solutions
It is difficult for buildings to develop their own listing system, and existing sites often increase applicant rates but not applicant quality. Similarly, apartment hunters find that listing sites rarely include the kind of information they care about. The emergence of concierge listing services is beginning to make things easier for both.
Ashrit Kamireddi, CEO and Co-Founder of apartment concierge and listing service VeryApt explains, “The platforms that have been the most successful have heavily invested in improving the quality of their data and have focused on making a traditionally opaque industry more transparent to renters. There has also been a shift towards concierge rental experiences that allow renters to connect with an expert that can guide them through their rental experience.” By providing more than just an inventory of available housing, concierge services are able to help renters find a better match, and property managers find more qualified candidates.
Payments have always been a hassle for renters and landlords alike. Many rental payments are still stuck in the pre-digital era. Considering the payments industry has undergone immense change due to some impressive technological innovation, it’s difficult to understand why industries that rely on timely payments haven’t caught up.
In response, streamlined payment solutions have been targeting the rental space to help standardize the process with better technology. Services like RentPayment offer payment solutions built to serve both renters and landlords alike, making it easier for renters to pay on time, and faster for property owners to process payment. Companies that offer a truly end to end solutions for payments stand to experience a great deal of growth as the industry adopts these technologies.
Using NLP data to empower renters
There are a lot of qualities to a property that aren’t regularly tracked or measured, meaning renters often lack the data they need to find the right property for their needs. That’s why the industry is turning to natural language processing (NLP) technology to search renter reviews for data that would otherwise go unnoticed.
Kamireddi explains, “NLP helps us identify qualitative attributes of an apartment such as noise level, maintenance responsiveness, and quality of amenities that a renter won’t be able to determine during a single apartment tour.” These technologies allow firms to tap into unstructured data like reviews to help deliver meaningful insights to renters.
Short-Term rental sites
The rise of short-term rental sites like VRBO and Airbnb are changing the game when it comes to real estate investing. For better or worse, savvy investors are beginning to acquire properties that can be used for short-term rentals on sites like these.
This change has been so rapid it’s created a great deal of debate in cities like San Francisco and San Diego, both of which have fought legal battles against these sites. Despite the controversy, these tools have driven an increase in independent wealth, with reports indicating that California Airbnb hosts alone made over $1billion in revenue in 2016.
Giving property managers access to renter insights
While property managers are often experts on what’s happening in their own portfolio, they often lack critical data on renter trends and interests. Fortunately, the same firms working to give renters more data are doing the same for property managers.
These insights are important because millennials have different interests when searching for housing. Kamireddi shared one example, “In many cases, living close to grocery stores, public transit, bars and restaurants is almost more important than the quality of the apartment itself. In fact, 46 percent of our users indicated that living within a walking radius of a grocery store or convenience store is among their top three search criteria.” Having the latest information on renters’ interests can help property managers improve their marketing efforts to reach the right audience.
Why it matters
Renters are getting to the point where they’re willing to spend a lot more for the right fit. In fact, Census data shows that rent to income spending is the highest it has ever been at 20.89 percent. That’s why it’s important for anyone in the rental industry to leverage the latest in technology to better connect with the influx of digital natives that are looking for apartments and housing options that meet their elevated expectations. The good news is, with the number of tech solutions hitting the market, it is becoming simpler for renters and property managers to find the right match and maximize the value of their housing experience.
This post is part of our contributor series. The views expressed are the author's own and not necessarily shared by TNW.