Higher paying tenants: we all want them, but sometimes they can seem like the proverbial unicorns of the rental business.
The good news is, at least in our industry, unicorns exist and if we can find out how to catch them, we’ll reap the rewards of higher rent for years to come.
In years past, attracting a higher priced tenant required things (like granite countertops) that were so expensive that they’d tend to wash away any added benefit. But nowadays, a new class of renter is willing to pay more for amenities that will lead to higher profits without breaking the bank.
The key is to attract millennials.
The key lies in attracting millennials. Specifically, these are the folks born from 1982-2004 who practically entered the world with smartphones in their hands.
Millennials are a good group to market to because they place less value on expensive things like space, extra bathrooms, and flashy countertops than their parents did. Instead, they value things like flexibility, community, and functionality.
So, let’s take some time to unpack five steps you can implement on your current property to attract a higher paying tenant:
1. Use “Smart” Technology
This is much easier than you might think. At a basic level, millennials want to be able to monitor their home via a smart phone.
Adding things like a smart thermostat (Nest), video monitoring (Dropcam), and smart lights are made very easy by the self-contained/DIY systems on the market nowadays. You can personally install one of these highly affordable systems in 15-20 minutes at your property.
Once the system is in place, it will provide a unique benefit that would allow you to draw in a higher priced tenant. These systems will benefit you too: once the tenant left, you can use the same system to monitor your vacant property until it was occupied again.
2. Market the Community, Not the Space
Just because you don’t have the most square footage to offer, doesn’t mean you can’t compete for those higher priced tenants.
Millennials especially value spaces where they can meet their neighbors and socialize with their community. Think of creative ways that you can market the spaces near your property as gathering points.
You could also educate yourself on the neighborhood hot spots, restaurants, clubs, and coffee shops and market those as a benefit of renting your property.
Millennials, more than other generations, enjoy living car-free, and have extra income as such. Anything you can do to highlight the public transportation options will certainly attract a higher paying tenant.
3. Offer Lease Flexibility
Flexible lease contracts will command a higher price. Many times, a higher priced tenant will travel a lot, or have a business allowance for housing. Lease flexibility, such as a monthly lease, or easy termination rules, will give the tenant the confidence to pay a higher price.
4. Tell a Story
Are you a family run company? Proud local resident? If so, these are the kind of stories that will resonate with a higher priced tenant.
Millennials especially are known to value local businesses and shopping small. Use this to your advantage if you have a story like this. Of course, you’ll still need to offer a high quality residence, but the added value of a special story will help you stand above the crowd.
5. Support a Relevant Cause
Statistics overwhelmingly show that higher income tenants have a strong preference for businesses that are doing well for the world. They’re even known to pay more for brands that make a dollar AND a difference.
Another way to build brand loyalty is to weave a social cause into your business. Perhaps you could beef up your brand by donating leftover construction materials to a Habitat ReStore? Or maybe you could lead a group on a Habitat for Humanity build day? The bottom line is find a cause that makes sense for your business and is near and dear to your heart to resonate with higher priced tenants.
It’s easier than ever before to attract a higher priced tenant to your property. The good news for you is that few landlords are actually taking the steps above, so by following them, you’ll give yourself an unfair advantage while drawing in more rent dollars.