Most of us don’t worry too much about our customers’ demographics - if they pay on time and don’t make problems, they’re good tenants, right?
But knowing your customers can help you predict their behavior, which in turn helps you plan out your next moves. For example, different age groups use storage for different lengths of time!
If you have a good idea of how long your average renter is going to stay, you can know how much money you expect to make per renter, how much demand you’ll need to drive, and how you’ll need to approach raising rates!
Let's take a closer look at the length of self storage unit rentals by generation.
The 2023 SSA demand study offers a ton of information, but it can be difficult to parse out the useful numbers from all this noise. In this blog, we’ll show you have knowing your renters’ generations can help you predict how long the average tenant is going to stay.
Baby boomers may rent a unit for several years as they downsize their homes and accumulate possessions over time. On the other hand, millennials may only need a unit for a few months as they move between apartments or homes. Gen Z is in an age bracket where they’re going to college, moving to new jobs, and getting out of their parents’ houses.
The generations that use self storage the most are changing too! All of this information can give you a glimpse into your business’s future so you can make good plans and stay ahead of the curve.
The overall spread of rentals is pretty flat - all generations will have tenants that rent for 1 month or for 3 years. But some generations tend towards shorter rentals and others lean towards longer rentals.
The demand study revealed that the older generations rent for longer periods of time, with Baby Boomers renting for over two years on average.
This means if you’re serving Boomer communities, you’ll need to consider how you plan to set rates - tenants don’t love having their rates raised, and if you start with too low of a rate you will either have to fight to bring it to where it should be or settle with making a suboptimal return on that unit.
Gen X are less likely to rent for two or more years than Boomers, but more likely than Millennials. Both Gen X and Millennials are slightly more likely to rent from 1-2 years than for shorter periods of time.
Millennials and Gen X are equally likely to rent between 3-6 months and 6-12 months.
Gen Z is equally likely to rent from 0-3, 3-6, and 7-12 months, but they are far more likely than the other generations to rent for less than 3 months.
This makes sense! The younger folks are more likely to move for a new job, go to college, get out of their parent's house - temporary storage needs that they only meet for a few months at a time. The older the renter gets, the more likely they’re using storage for longer-lasting needs. Boomers and Gen X are using storage units more as a way to increase their usable space - for seasonal decorations, hobby equipment, etc.
All of this information taken together boils down to one easy-to-remember point: the older a generation is, the longer they’re likely to rent!
Knowing how long each tenant is going to stay can help you plan out your fiscal year, devote your resources to the most beneficial avenues, and prepare for difficulties.
If you’re looking to invest in self storage, demographic information about the area you’re considering can also tell you what sort of turnover rate to expect.
If your business caters to longer-term renters, you can feel safe offering discounts on the first few months, because you’ll make the money back over time. On the other hand, if you find yourself renting to younger tenants, your initial discounts can’t be too steep because you won’t have a chance to make it up.
Length-of-rental is also very important for your self storage marketing. You’ve got to know how many leads you’re getting from your ad campaigns, your website, your flyers - and then you need to know how much money you’re making on average from these rentals.
The value of a renter changes drastically based on how long they stay. If a renter stays with you for a year, that renter is worth over a thousand dollars - if they only stay for the summer, the value is much lower.
That doesn’t mean you can be picky about who rents, but it does mean that you can’t count the two options the same. You may want to invest more money in the marketing channels that bring you Millennials, Gen X, and Boomers than those that net you Gen Z students.
Alternatively, if you know you’re going to be renting with a lot of turnaround (which isn’t bad if you always have new renters!), you may want to hire more managers to help facilitate unit turnaround.
Whatever generation your customers are, understanding what they’re likely to do next can give you a step up on the competition!
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