Are apps the answer to meeting tenants’ shifting demands?

Expectations from rented property are changing to reflect modern lifestyles – and providers are embracing technology to improve tenant experiences, reports Will Upton.

Just as the residential real estate market is evolving, tenants’ demands and expectations are shifting too. For example, once proximity to offices or schools was a key factor for many. But since the pandemic ushered in the trend of working from home, the importance of this factor is decreasing.

Now, when seeking rental properties tenants prioritise peace, quiet and privacy, security, and proximity to leisure facilities such as shopping centres and restaurants, according to a survey carried out by proptech company Chainels.

This survey of 1,750 of tenants in the Netherlands, UK and France revealed that there is one feature of rented property which can really enhance tenants’ wellbeing and general living experience in particular: a sense of community.

At Real Asset Media and Chainels’ The Future of Tenant Experience briefing, Sander Verseput, co-founder and chief operating officer/chief financial office of Chainels, said: “A total of 67% of people think it’s important to have a sense of community in their building.” Indeed, loneliness is a strong factor for moving out, especially for expats who can have difficulty integrating (see below).

“Community is a vague term, so we tried to find out what makes a community. We found that people want to feel safe, want to make friends, want to have people around that they can rely on and they want to feel less lonely,” added Verseput.

Assets designed for purpose

With tenants expecting more than just a space to live in from the property they rent, companies are no longer thinking of their rental buildings simply as assets. Now they are viewed “as products that are designed specifically for a demographic or area of the city”, said Jack Renteria, living concepts director at Danish property developer Alfa Development.

It is leading to what is known as the “hotelisation of real estate”, said Renteria. “We’re having to recognise tenants as customers, that we need to retain by giving good service. We need to identify the different ways in which we can give them that service.”

The most proactive landlords and rental property managers are turning to technology to meet these changing demands. Apps, such as the one developed by Chainels, enable easy and clear communication between tenants and landlords. They facilitate the reporting and fixing of issues, and the organisation of events, while offering amenities, perks and services. They also allow the managers of rented residential property to collect data about their tenants.

‘There is a gap between what tenants want and what landlords are delivering. Too many landlords are currently ill-equipped to meet tenants’ expectations.’

Sander Verseput Chainels

Tenant experience apps can play an important role in developing a sense of community and responding to the specific demands of various demographics and locations. Some 95% of tenants in Chainels’ survey stated that they would find a digital app useful for managing one or more aspects of their living experience.

“The mobile app is fundamental, it is a discovery tool. It allows people to know what’s going on, have information on what is happening inside and outside the building, as well as enabling people to connect with the community,” said Esteve Almirall, global managing director of asset manager Node, which specialises in co-living.

Fifty-four per cent of tenants surveyed by Chainels are happy to pay more for such an app, if it offers the convenience of booking the gym or a meeting room, for example. However, only 17% of landlords use a tenant app. “There is a gap between what tenants want and what landlords are delivering. Too many landlords are currently ill-equipped to meet tenants’ expectations. Interest is high, but adoption still low,” said Verseput.

Globally, more than half of real estate companies are hesitant when it comes to investing in technology. The real estate industry can be slow to adopt innovations – and the ‘proptech revolution’ is no exception.

This reticence could be a mistake for rental property managers. “For the last 50 years, landlords didn’t invest in their properties and just collected rent. Now it is crucial for landlords and property managers to be responsive and fix things. You must find a balance between providing the best experience for the tenants but still generating value for shareholders,” said Almirall.

The impact of artificial intelligence

In future, this could be achieved with the help of artificial intelligence. “We’re looking at AI solutions, but not using them yet. They would be useful for maintenance reports and so on, but there is a value on a human touchpoint. I think AI would be useful to free time up for property managers to have personal interactions with tenants,” Almirall added.

While AI is not quite ready for implementation yet, it will undoubtedly have an effect on most industries, including real estate. Combined with an app where AI would be accessible for a tenant, the possibilities could be very exciting.

Even if we are not at that point yet, it would be unwise to disregard AI, and Verseput believes it will have a role to play. “I see a big role for AI in the tenant experience app over the long term,” he said.

Another issue is getting tenants to adopt the app and use it. Almirall said: “You have to ‘force’ people to use the app, streamline communications so the app is the only line of communication to be used unless it’s a really urgent matter. Set the rules clearly: no emails or phone calls. All information has to be on the app, not just social events, but also practical information, from the manual for the washing machine to instructions on using the oven.”

It is also important to maintain a balance with the app. “Give information but don’t overload people with information. A few times a week, but not every day,” said Verseput.

Privacy and shared spaces

While tenants appreciate the sense of community, they do also still want their own living space. “People want privacy, but they also want to interact with their neighbours in a communal space,” added Verseput.

Indeed, in Chainels’ survey, the fourth most important factor for tenants looking for a rental property was well-maintained shared spaces. This could come in the form of a gym, working space or common rooms, but tenants want to be able to share communal areas with their neighbours while still having their own private space.

When it comes to landlords, expectations are clear: good communication and responsiveness, and prompt response to maintenance and repair issues were the two factors that tenants valued most in their landlord.

A tenant app can help facilitate this communication. But more than that, the tenant app’s main benefit is the creation of a sense of community which makes people feel more at home. It makes them more likely to renew their lease and it also helps them feel less lonely. 

The ability of tenant apps to help renters make friends faster is a prime feature. As Renteria pointed out: “It took me 10 years to get to know my neighbours, but in our buildings, it takes 10 days to get to know your neighbours.”

As technology continues to develop, other industries have been quick to adopt it to help their processes. And the benefits of technology such as tenant apps will be hard for the residential real estate industry to ignore.

Community valued over location in Denmark

Specific research into the demographics of renters can yield positive results for rental property managers. Alfa Development owns properties on the outskirts of Copenhagen, in the “largest life-sciences cluster in all of Denmark, employing thousands of people”, said the company’s Jack Renteria.

“We did a collective intelligence exercise and everyone mentioned the loneliness issue. The value of community came up again and again. Companies want to attract talent, but if there is no sense of community, people leave,” he continued.

‘We did a collective intelligence exercise and everyone mentioned the loneliness issue. The value of community came up again and again.’

Jack Renteria, Alfa Development

According to a survey conducted by the Confederation of Danish Industry, loneliness emerged as the primary reason why expats choose to leave Denmark.

Alfa Development showed focus groups the clubhouse it was offering, the services, the amenities and the sense of community. The idea was that they were offering renters an easy way to make friends and the young professionals responded very positively.

This community the properties could provide was far more important for tenants than the location. By taking into account the specifics of the demographics of their tenants, Alfa Development could cater to their needs much better, leading to more satisfied customers who were less likely to leave.