So where do you live today? The answer for a lot of us is in an apartment. Now let’s go back and think about what it took to get you into that apartment. First, of course, you had to find the apartment. Then you had to find a way to get the stuff that you owned to the apartment. Then it had to be put into the apartment. Finally, you spent the next weeks, months, years unpacking and putting everything in the place where it belonged. Wow – what an effort that was! If only there was an easier way to go about this moving into an apartment thing…
Say Hello To Furnished Apartments
We’re product managers, we should be able to solve any problem, right? We’ll it turns out that the pain and hassle of moving into a new apartment is one such challenge that product managers are in the process of trying to solve. Say hello to the furnished apartment. So just exactly what is the product development definition of a furnished apartment? Well, it’s exactly what it sounds like: an apartment that is furnished and ready for you to move right in to. The apartment comes with furniture in each of its rooms (selected by somebody else) and its utilities (gas, water, electricity, cable, internet) are all turned on and waiting for you to arrive. There is quite literally nothing for you to do in order to start living in your furnished apartment besides showing up.
In order to be successful, product managers need to know who their customers for these furnished apartments are. The traditional customer for a furnished apartment has come from corporations who need housing for their employees who are going to be staying in a location for an extended period of time. Additionally, people who have been displaced from their homes due to fires or floods are good candidate customers along with people who may have relocated to a town in order to get medical treatment. The good news about the furnished-rental housing market is that it has been growing. This increase is despite the face that the market is facing new competition from sources such as Airbnb and other startups.
Where things start to get interesting is when the product managers realized that there was new demand for this type of housing. Over the past decade there has been new demand. What seems to be happening is Americans are changing from being home owners to becoming renters. Among these new renters, some simply do not want to go to the effort of buying all of the furniture that a new apartment requires. Likewise, these people don’t want to deal with the hassle of getting cable set up and the water turned on. The benefit of a furnished apartment is that all of this has been taken care of for you.
How To Market Furnished Apartments
The furnished apartment market is currently booming. Last year revenue in the market where apartments are typically leased for at least 30 days (to distinguish it from hotel rooms) rose by 13% to US$3.62B. The number of available apartments for rent rose by 6.5% to 71,201. The cost of staying in one of these apartments for a single day was up 7.3% to $161. That kind of market growth would look good on anyone’s product manager resume. Most furnished rentals are provided by firms that that rent them from landlords, furnish them, turn the utilities on, and then sublease them. Since the rentals are being made for at least 30 days the companies that are doing this won’t have any of the short-term lease problems that Airbnb is running into.
Product managers who are renting out furnished apartments can generally do it at a lower daily rate than extended-stay hotels. The reason for this is because unlike the hotels, they can get rid of excess supply simply by not renewing their leases. This is exactly what they did back in 2008 when the financial crisis hit. The thinking going forward is that furnished apartments are going to be appealing to customers who are looking at a change in “generational lifestyle”. Many of the potential customers are ones who do not want to have to worry about paying utility bills or worrying about decisions about what to do with a house.
Going forward, who is going to be renting these furnished apartments? It’s going to be a combination of millennials and a younger generation who are not interested in owning a home. Additionally, there will be empty nesters who will have the same desires. You can also add in those people who are seeking to only have to write one check to cover their housing each month. Product managers do need to realize that as their market grows, they will be facing more competition. One of the biggest sources of competition will be coming from vacation home rentals that get listed on sites such as VBRO.com and Airbnb. Things may become even more complicated as new players enter this growing market.
What All Of This Means For You
Everyone has to live somewhere. A lot of us choose to live in apartments that we rent on a monthly basis. The whole process of picking an apartment and then having to pack things up, move in, and unpack everything can be a huge amount of work. There has to be an easier way to find a place to live! Looks like its time for product managers to take a careful look at their product manager job description and see if they can come up with a solution.
It turns out that there is an easier way to go about doing this. There is a type of rental called a furnished-rental housing in which you can rent an apartment that comes fully equipped with furniture in every room and the utilities turned on. The customers for these types of apartments include corporations looking for a place for their employees to stay while assigned to a new town, people who’s homes have been damaged, and people who are in town to get medical treatment. The market for furnished apartments has been growing as people are starting to appreciate the fact that they don’t have to purchase furniture or turn on the utilities. The market for furnished apartments has been growing and there is new competition starting to show up from firms like Airbnb. Furnished apartments can generally be rented for less than extended stay apartments because product managers can shed inventory if the market turns down. Going forward millennials and younger people along with empty nesters are expected to become the new customers for furnished apartments.
Product managers realize that they have a unique product that appeals to their customers. In order to be successful, they need to stay aware of what their customers alternatives are, such as Airbnb, and make sure that their apartment product is a better fit. Having more units to offer in attractive locations will make furnished apartments an appealing option to people who are seeking their next apartment. Who knows, perhaps you and I might be selecting our next apartment based on the furniture that is already there!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: How can furnished apartment product managers compete with Airbnb?
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What We’ll Be Talking About Next Time
So before we dive into my tale of woe, let’s first make sure that we are all on the same page at least in terms of vocabulary. When you lose a job, there are a couple of different ways to have this happen. One is that you get laid off. This generally happens when the company is forced to reduce its workforce because they’ve run into financial problems or a contract got canceled or they are closing a branch office. Multiple people generally get laid off at the same time. You get the point. When you get fired, it’s a lot more personal. Everyone else is still going to have their job but you are not. You have been told that you are no longer wanted and you need to pack your things up and get out. This is what happened to me. I got fired.