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Executive Summary

Maximizing the Effectiveness of Marketing in the Single and Multifamily Rental Industry

Author: Zach Harper, rentbits Account Manager
November 2009

Introduction:

At rentbits we manage thousands of rental advertisements monthly through an online distribution method, with the goal of generating property managers and real estate investors the most leads possible. In monitoring these ads and our lead generation, we have seen a drastic difference in lead volume between properties even when they are similarly located and priced.

It was this observation that led us to create an online survey to determine what makes a potential resident inquire about one ad over another. Our survey was executed on the rental search engine, rentbits.com, where 1,000 individuals that are currently seeking housing from across the U.S. responded to our survey.

Research Questions:

We used this survey to answer seven questions in regards to rental advertising. The answers to these questions provide the basis for creating and distributing effective rental advertisements.

  1. What type of housing is currently in high demand?
  2. What marketing sources are potential residents using, and how do they use them?
  3. When searching for housing, what are potential residents looking for?
  4. What makes location important?
  5. What is the importance of pricing and knowing the average rental rate for your area?
  6. How long is a potential resident willing to wait for a response from a property manager?
  7. How does rental search vary for different demographics?

Research Findings and Recommendations:

In asking potential residents what they want to see in a rental advertisement, we are able to provide answers to the above questions. Our first discovery is that houses are in much higher demand then apartments. Eighty three percent of our respondents said they are interested in a house, while only 32% said they would like an apartment. This presents a challenge to the apartment industry, especially since apartment completions in 2008 were the highest they have been since 2004.

Explanations for the demand in houses over apartments include the foreclosure crisis and credit standards. Families being forced out of their homes due to foreclosure are more likely to seek similar housing in a similar neighborhood. Apartments also tend to be more stringent on their application process, which eliminates individuals facing foreclosure and bankruptcy.

When placing your advertisement, it isn`t just important to use the Internet, but you also need to maximize your exposure by being on as many sites as possible. Seventy two percent of our respondents told us that they go to the Internet first when beginning their rental search and 93% told us that they are searching two or more sites. Additionally, 25% are searching more than 10 sites.

The average rental seeker begins their search with a search query that is three to six words long. This usually includes a location identifier as well as a price range. Price and location are two key elements for every rental, but the potential resident wants to know more than just that.

Our survey indicates that the most important elements in the ad, after price and location, are pictures, lease terms, deposit amount, pet friendly, and washer and dryer included. Our respondents go on to tell us in the comment section that they want as many details as possible, so that they avoid making unnecessary calls and trips to tour a property that is not the right fit.

We also looked at rental preferences based on different demographic factors such as gender, income level, age, and those looking for houses versus apartments. What we found is that there is a very small difference when comparing these factors. Most responses had a variance of less than 5%.

The category that had the greatest difference in preference was gender. The majority of our respondents, 82%, were female. This gender gap can be explained by a David Powers Home Research study that states that 80% of home buying decisions are made by a woman.

Overall, potential s are searching multiple sites across the Internet looking for an ad that will give them all the details they need to make an inquiry without wasting any time. Many respondents said they would not even consider an ad that did not have photos, and that they want all the details and hidden costs up front to avoid surprises at move-in. Creating an effective ad can be time consuming, but by spending the time upfront you can reduce invalid leads and vacancy times. Next Section>>