It seems like yesterday that Millennials were the new renters on the block, slowly taking over from Gen Xers to become the new majority. Suddenly, Gen Z is beginning to gain ground on Millennials, entering the workforce en masse and looking for somewhere to live other than their parents’ homes.
By 2034, Gen Z — Americans born between 1997 and 2012 — will overtake Millennials as the largest portion of the U.S. population.
Today, about 44 million Gen Zers are looking to rent (updaterdotcomblog) — 60% of the entire generation. This represents the most intense demand for rentals in decades.
At first glance, it might not seem like much has to change to accommodate this influx of new renters. Millennials and Gen Zers often feel like two sides of the same coin: Both groups tend to be tech-savvy, and they both faced a recession upon graduating from college.
However, there are noteworthy differences between the two generations regarding technological preferences in their homes.
Gen Zers grew up along with the Internet of Things (IoT), and they connect with technology more than any other generation.
Gen Zers Aren’t Just Younger Millennials
While most Millennials know their way around a smartphone, being tech-literate and tech native are two completely different things.
Gen Zers are tech natives who grew up with smart home devices, smartphones, voice assistants, social media, etc. They are the “all digital natives. ”
In one survey, 60% of Gen Zers said they had used smartphones before they turned 14. They’ve been in the middle of it all, adopting the newest technology even as it evolved at a more rapid pace. Unlike Millennials, technology isn’t just a part of the Gen Z lifestyle — it is their lifestyle.
In practical terms, this means that Gen Zers expect more from their technology than previous generations. Technology feeds their connected lifestyle — which, in turn, informs every decision, including where they live.
Much like electricity or water, high-speed internet access and a smart home that can be controlled remotely will be considered necessities rather than conveniences.
Though many Gen Z members have not yet bought homes, 43% say that smart home capabilities, like connected IoT devices, are a key consideration in choosing where they live.
Frugality Sets Gen Z Apart
Technology isn’t the only differentiating factor when looking for a place to live. Not only do Gen Zers face a severe financial strain thanks to COVID-19, but they also grew up in the shadow of the Great Recession.
In many ways, Gen Z has more in common with the Silent Generation, who grew up during the Great Depression and World War II, than Millennials.
As a result, Gen Zers prize stability and affordability much more than Millennials do.
Upgraded amenities in properties might be great selling points, but amenities aren’t as appealing to this generation unless they help save time and money.
For professionals in the rental property space, the challenge will be finding new ways to attract this generation of renters by combining their digital native lifestyles with their cost-saving concerns. This attitude isn’t as difficult as it may seem. The two priorities can complement each other — with the help of IoT devices. IoT devices create real benefits that serve as selling points for Gen Zers.
The Tech that Gen Z Wants — Smart Devices
The following areas will be most attractive to Gen Z tenants as smart property tech continues to take over:
1. Appeal to their values.
Smart properties offer money-saving opportunities for tenants, but the monetary aspect isn’t the sole benefit. Most smart home tech is energy efficient and good for the environment, which is a big selling point for many Gen Zers.
Moreover, smart property tech like keyless locks can make properties safer — especially as we practice social distancing — and more secure. For example, fobs can’t be lost or given to people who should not have them.
These smart devices save money, help the environment, and deliver a convenient lifestyle — all major Gen Z concerns.
To accommodate these technologies and further appeal to Gen Zers, smart property platforms should be thought of as utilities, much like water and electricity.
2. Offer savings, convenience, and connectivity.
High-speed internet in every rental property is a given by this point, but more advanced tech is needed to meet Gen Z’s needs.
Most Gen Zers will want their homes to be as connected as they are.
There isn’t one tool that connects everything, but there are several tools for specific uses that deliver the right combination of performance, cost, and coverage for different applications.
For example, Z-Wave could be used for low bandwidth, high-security IoT devices, such as water sensors and door locks. 5G cellular networks could be used for secure communication on remote devices. And Wi-Fi could be used for high-speed, low-security services, such as streaming videos.
Smart IoT-Connected Devices
IoT-connected devices, like smart lighting, thermostats, door locks, video doorbells, intercoms, etc., all have the potential to become part of a single “smart property” that truly appeals to Gen Z’s need for convenience and savings.
Smart thermostats, for instance, can automatically turn the temperature down or up using voice control, location, or occupancy rules, making it easy for tenants to save money on their monthly electric bills.
Intelligent thermostats can also check to ensure the unit is operating correctly, so property managers can identify and fix faulty units before they cause any problems.
A connected intercom, meanwhile, allows Gen Zers to buzz friends in using their phones without the need to disrupt their TikTok browsing.
Prepare for Gen Z Tenants Today
Gen Z is just starting to enter the adult world, and there is no doubt that this shift will cause plenty of changes. If property owners and managers wait until Gen Z overtakes Millennials to implement IoT-connected smart home technologies, they’ll be playing catch-up.
Property managers, realtors, and loan officers must all start thinking about what they can do now to prepare for the Gen-Z client. Creating a plan and begin testing now, for a decided edge in the market.
Be proactive now — and the prep for Gen Z will pay-off-big-time when this next generation of young adults becomes the biggest renters.
Image Credit: picjumbocom; pexels
