Why choose a furnished apartment?: Adding value for the tenant

Here at Retrac, we stay curious and constantly up to date with trends in our client’s space. We have already explored why furnished apartments are becoming popular, and investment trends grabbing investor’s attention, but what are the advantages for tenants?

In this post, we take a look at the tenant’s perspective. Understanding what is most valuable to tenants is crucial in this competitive market — going above and beyond to offer something extra is often what differentiates a super provider from the pack!

The core value proposition — While past tenants often rented for long periods and preferred to bring their own furniture, many modern tenants plan to stay for a short while, and appreciate furnished apartments. Standard furnished apartments come with the basics, like a bed and desk, while fully furnished apartments often include extras like crockery, appliances or towels.

src

Flexibility — As the average millennial changes jobs every 2 years, it seems frequent location changes are to be expected. Uncertain projects and temporary jobs may mean that modern tenants are unwilling to commit to a 3-year lease like past generations did. Many newcomers use furnished apartments as a “base” while they settle into their new life, and eventually search for their own apartment. Providers can offer flexible contracts with short notice periods to facilitate these often unexpected moves and short stays. This low commitment approach encourages tenants who are unsure of their plans and may attract more bookings than a locked-in but seemingly higher-yielding contract.

Reserve in advance — 60,000 people move to Berlin each year, and this is expected to rise to 200,000 by 2050. With its relatively low cost of living and bohemian edge, Berlin continues to attract more and more expats interested in working in the vast range of companies located here. In response to this demand, many providers now offer digital tours and an option to reserve rooms online before even arriving in Germany. This helps expats rest assured they will have a quality place to stay upon arrival. As it seems likely expat numbers will grow in the future, providers should invest in marketing internationally and making their booking and onboarding process as digital as possible.

Design — Modern, tasteful design adds another dimension for prospective tenants. When faced with similar options, most flat hunters will choose pleasant surroundings and prefer nicely furnished flats that reflect their personality and taste. Providers should invest some time in understanding tenant’s preferences and potentially unlock new value.

Furnished apartment bundles from Reco

Community — Even during the pandemic, Millennials flocked to shared spaces, even in off-the-beat locations like smaller cities and the countryside. Young, single people who move frequently are often starting from scratch and eager to make new connections. Social spaces and providers which create a sense of community offer a premium experience. There’s also a network effect — the more rooms filled, the more people, thus the more opportunity to socialise.

Asset Light — Millennials and Gen Z are making a shift away from ownership. In a trend known as “uberisation”, they prefer to rent, borrow or share assets if and when they need them, rather than investing in assets themselves. Tenants move frequently and may not have the budget or space to accumulate goods. Minimalism and a less encumbered way of living is the future. This offers flexibility for highly mobile tenants like digital nomads, freelancers or interns. It also presents a lower upfront cost to those on a budget. A provider could differentiate itself by offering something special, for example, the Student Hotel, which provides bikes for residents.

Sustainability — Gen Z is the most eco-conscious generation yet. They are concerned about the planet, social justice, and reducing humanity’s use of natural resources. Coliving spaces, student dorms and other furnished spaces often offer an underexploited sustainable edge. Organisations such as Conscious Coliving focus on creating sustainable shared environments for this demographic. The option to share appliances and facilities with other tenants reduces the need for tenants to purchase new things, and electricity usage is generally much lower when shared in a large space. This helps reduce carbon emissions, as well as expenses.

SRC

Appliances — furnished apartments are far more liveable than hotels, and can feel like home. Cooking facilities and all the home comforts help tenants live self-sufficiently in a new place. Tenants appreciate facilities like coffee machines or washing machines, which save them from trekking around unfamiliar neighbourhoods looking for the services they need. Providers should get to know their tenants and understand what else could really add value to their stay.

Services — Similarly, most furnished apartment providers include bills in the rental price. Waste collection, Wifi and things like electricity or gas are set up and handled by the provider. This takes a weight off the shoulders of newcomers who may not speak the local language or be aware of the process involved in setting these up.

Local knowledge — Those arriving in Berlin for the first time are often unfamiliar with the city, its neighbourhoods, and other important information for flat hunters. Furnished apartment providers locate in trendy neighbourhoods and often offer help or recommendations for local businesses, bars or restaurants. This helps newcomers benefit from some local knowledge and feel they are seeing the best of their new city — an experience they would have missed in a private apartment. Larger providers could invest in activities and guides for tenants to make the most of their stay in Berlin.

Furnished apartments are a solid investment for the future. They offer huge value to a large number of tenants, and demand is only likely to increase. While expansion is always exciting, it often comes with lots of operational headaches — especially when it comes to managing inventory. To learn how to digitise all your inventory management as well as save a lot of time and money, see our post: 10 Ways Retrac will benefit your business.