Move over millennials! Here comes the next generation, Generation Z. Many millennials are now transitioning from renters to homeowners, freeing up the rental market for Generation Z. Generation Z consists of those born after 1996. According to a CNBC report, the U.S. has over 60 million people in this category. Some characteristics of Gen Z are that they are conscious of their health and wellness, the environment, are technologically advanced, and financially smart. According to Forbes, Generation Z emphasize that managing stress and mental health is their most important health and wellness concern. The fitness industry has more than doubled its efforts in attracting Generation Z. In terms of dietary selection, nearly 80% of Gen Z plan to go meatless 1-2x per week, citing health and environmental concerns. As for their finances, Gen Z are predicted to be financially smarter than some of their preceding generations. For example, 40% of millennials have overspent or gone into debt to keep up with their lifestyle. According to a recent survey, 89% of Gen Z say they are already planning for their financial future, with 64% researching financial planning starting at the average age of 13. And we all know that Generation Z grew up with smart phones. As many as 25% had a smartphone by the age of 10. Generation Z is accustomed to everything being on the tip of their fingers, on demand, by phone. Whether it be to order clothes, furniture, beauty products, or even food, access to these products and services are simply a click away.
So how will Gen Z approach the rental market? Generation Z are technologically advanced. They are extremely active on social media and use social media platforms to guide their buying decisions and experiences. As a multifamily owner and/or developer, establishing and maintaining the community’s brand and image is critical. As such, property management and developers are turning to social media such as Instagram, to promote their respective properties. Gen Z renters may use social media as a guide for their next apartment rental by looking at pictures of the property and using platforms such as Instagram, Snapchat, and Yelp, for reviews from other tenants, or to simply experience community interaction. Common areas for community-building events like yoga and happy hours have become more popular and are effective retention tools. A resident with one friend in the building is 75% more likely to renew their lease, and one with two friends is 90% more likely to renew.
Not only are these things important to Gen Z renters, they are also financially conscious and want to live within their means. High rental prices can drive away these renters. With Gen Z renters, frugality will win out over and beyond the latest and greatest amenity packages. As many of the Gen Z renters graduate from college and transition into their careers, they are prone to select an apartment home that they can well afford, while paying off debt such as student loans. Compared to the generation before them, we saw the millennials appetite for amenities such as Wi-Fi, delivery lockers, pools, fitness and recreational areas, walkable stores and restaurants. Many of these amenities are still relevant, however, with Generation Z, affordability and community interaction is the new amenity.
Doster is a leading multifamily contractor with more than 15,000 units completed. View some of our latest work and learn more about our multifamily expertise here.
Brandon Cummings, Business Development Manager
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