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Multifamily in transition: The future of the ILS

Ask Rent.com, Callsource, Lead Tracking Solutions, Vaultware, RentWiki, and MyNewPlace what the past year has been like. Mergers, acquisitions, and rebranding have been the theme. The top of the sales funnel has never seen such turmoil before.Multifamily's change

Change.

It's a sign of evolution within the industry. RentWiki represents a good case study. Back in 2009, their mission was to try to get residents to engage with each other and share their experiences. It's a good concept. The problem? Residents and prospects aren't passionate about apartments. Apartments are boring. RentWiki has noticed the shift to ratings and reviews and are rebranding themselves as RentAdvisor soon.

So what do people want then?

When shopping around, they want to read comments from other people who have lived at a community. They want to hear their experiences, and get crucial decision making feedback. The evidence for this is compelling. According to the "Getting Inside the Head of the Online Renter" survey from 30 lines and Satisfacts conducted late in 2011, the #2 source used during an apartment search isn't Rent.com, your website, Craigslist, Apartments.com, MyNewPlace, or BSitko.com but word of mouth. Where does Facebook rank for sourcing? It's used only 1% of the time - that's down by the way from 2010. Even in that sweet 18-24 age bracket, Facebook is not a place people go to find an apartment. 79% of all respondents in the survey used an ILS to find information about an apartment, 13% used a social media networking site. The key then is not to get people to find you on Facebook but to utilize the power and reach of Facebook to help them find you.

Using the power of word of mouthRentMineOnline has some success doing this but they are lacking a key component. They aren't an ILS (and would tell you they aren't trying to be). For RMO to work, property management companies must get their message started and hope people continue to share it. This is certainly great for resident referrals but what if you don't know anyone that lives there? 

Facebook is the largest social networking site on the internet with well over 800 million users. There's no better channel to get people talking. Apartments are boring conversation pieces but word of mouth has been proven to be the most effective source for finding one. It's high time we find a better way to utilize it.

Newest generation of the ILS

Yield Technologies, creators of RentSentinel, fired the first shot in the changing world of the ILS. Called a Social Renting Site, RentSocial is more than just apartment listings. According to Andy Hamilton, Chief Technology Officer for Yield Technologies: "We don’t simply provide apartment listings. We do quite a bit more than that. RentSocial is a mashup of: Apartment Listings; Ratings & Reviews; Resident Experience (pay rent and maintenance requests); and Social (meet your neighbors, share your searches, message your friends, etc…)" It's a slick site and although it will take patience and time to try to break into the ILS dominated world of the organic Google front page, this model is the next generation. Here you can get recommendations from your friends using the power of Facebook and can read reviews by verified residents. ApartmentGuide has also released a deep Facebook integration where prospects can see what their friends are saying. Reviews and recommendations from friends and non-anonymous residents. That is where you're going to see the biggest evolutions in the years to come. 

51% of apartment hunters find out information about your community from a review site. We, of course, still loath the anonymous rants posted on ApartmentRatings.com. Lots of prospects are also turning to Yelp for reviews mainly because people must have an actual account to post. Either way you look at it, reviews are here to stay. The ILS of the future is one that can eventually turn a search engine query into a listing view where a prospect can see a branded property page, a friends recommendation while reading a review from a resident, without having to go elsewhere. 

Computers are connecting people better than ever before but the tried and true ways of getting people to rent are still the most effective. Hopefully things will continue to evolve to better tap into it.

Happy renting everyone.

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This comment was minimized by the moderator on the site

I find this post refreshing. Thanks for addressing the elephant on the table.

  Stephanie Gonzalez
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I agree with this article 100% My property is very small and 100% rated on Apartment Ratings.com. I get people more and more frequently telling me they saw our rating and came to check us out. That doesn't mean they rented, however.

What one person likes, may not be what someone else likes. For instance, I might be 100% recommended, but I don't have any A property amenities. I think some people will see a high rating and expect to get all of the bells and whistles when they show up.

I only have a nice, small community in a prime location with a picnic area. They are older and don't have the granite countertops or stainless appliances. So, I really think some have been disappointed when they show up to see this "high rated property." What they can't see is how well I take care of my residents.

  Sandra Martin
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Hi, Bill, and my apologies for the somewhat "late" comment to your post -- guess I'm getting caught up after a heavy travel month! As always before I give my thoughts, in the interest of full disclosure I work with Apartment Guide and have been on the marketing side of the industry for over 21 years.

As usual, an insightful post -- I think you're right on track in that the consumer is looking for input from sources they trust; friends and other renters who can give them "real" information on what it's really like to live somewhere. They utilize the ILS, but also want additional information that isn't someone marketing to them. It presents a real challenge to most ILS companies, because the vast majority of our customers simply aren't there yet in embracing ratings & reviews and how they can join the conversation to their advantage. We at Apartment Guide recognize that Facebook and other social media sites (Twitter, Pinterest, etc.) offer a great opportunity to both expand our reach and offer added value to the apartment shopper, and we make it easy for them to share information out to their friends and to find us via social media. We also offer robust options to our customers to make it easier to know what's being said about their property and manage the conversation more easily.

I do need to take issue with the recent Satisfacts Research survey that you quote as determining that "word of mouth" is the "#2 source used during an apartment search." The Satsifacts methodology was to ask respondents to choose "all that apply" from a long list of potential sources, including word-of-mouth and drive-by/signage. Drive-by was the #1 source (the one checked by most respondents). I think the survey results can be misleading if the reader doesn't understand that this is simply an "if you used it, check it" survey. Asking someone to "check all that apply" is a far cry from asking someone "what sources proved most valuable."

I'm not saying that word-of-mouth isn't...

Hi, Bill, and my apologies for the somewhat "late" comment to your post -- guess I'm getting caught up after a heavy travel month! As always before I give my thoughts, in the interest of full disclosure I work with Apartment Guide and have been on the marketing side of the industry for over 21 years.

As usual, an insightful post -- I think you're right on track in that the consumer is looking for input from sources they trust; friends and other renters who can give them "real" information on what it's really like to live somewhere. They utilize the ILS, but also want additional information that isn't someone marketing to them. It presents a real challenge to most ILS companies, because the vast majority of our customers simply aren't there yet in embracing ratings & reviews and how they can join the conversation to their advantage. We at Apartment Guide recognize that Facebook and other social media sites (Twitter, Pinterest, etc.) offer a great opportunity to both expand our reach and offer added value to the apartment shopper, and we make it easy for them to share information out to their friends and to find us via social media. We also offer robust options to our customers to make it easier to know what's being said about their property and manage the conversation more easily.

I do need to take issue with the recent Satisfacts Research survey that you quote as determining that "word of mouth" is the "#2 source used during an apartment search." The Satsifacts methodology was to ask respondents to choose "all that apply" from a long list of potential sources, including word-of-mouth and drive-by/signage. Drive-by was the #1 source (the one checked by most respondents). I think the survey results can be misleading if the reader doesn't understand that this is simply an "if you used it, check it" survey. Asking someone to "check all that apply" is a far cry from asking someone "what sources proved most valuable."

I'm not saying that word-of-mouth isn't valuable -- clearly, it is for most of us, no matter what we're in the market for. But I am saying that drive-by/signage coming up as the "#1 source used" is laughable. Yes, just about anyone might drive a neighborhood we're entertaining living in . . . but is it the most valuable means by which an apartment shopper makes a decision on a specific apartment community or unit? Doubtful. And word-of-mouth is so ambiguous and potentially broad given today's social media networks, we need to redefine this when doing marketing studies.

I think we are a long way from any internet site that offers a "one stop shop" for apartment shoppers -- and I'm not even sure it's a valid concept given the wealth of both marketing information and user-generated content available to the consumer who likes to thoroughly vet out their options. But I do hope to see the industry become much more comfortable with and knowledgeable about leveraging both ratings and social media to their advantage.

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  Judy Bellack
This comment was minimized by the moderator on the site

Our "community" is actually a collection of 3 heritage 19th century buildings. This is a special niche within the rental world and I would love to see some conversations with specialists in our real estate area that identify and address our special needs.

  H. W. Graham

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