How can real estate agents, investors and businesses survive in the new nomad economy?
The world has changed, and continues to change. While statistics show that many people still crave their traditional, suburban American Dream with a spacious single-family home, there is a rapidly growing population of location independent digital nomads out there. This pool isn’t even near tipping point yet, but when it hits, there will be a noticeable separation between the results of those real estate professionals and companies that were prepared, and the rest.
Real estate investors shouldn’t be confused about who these “nomads” are. It is a group of highly intelligent, tech savvy, high income earning, professionals who just don’t feel they should be permanently tied down to one spot – especially when that spot is high rent zones like Silicon Valley or Manhattan. Their group includes some of the brightest minds in every industry, and there are even billionaires in the mix. While this might be a trend that is dominated by Gen. Y, there are plenty of Gen. X members on the road, and a growing number of boomers that will be joining this nomadic society. This big question is this: how can real estate investors retain the business of these individuals?
Month-to-Month Leases
While many landlords are currently focused on attracting and developing long term tenants, others have found great rewards in offering month-to-month leases. This doesn’t mean individuals won’t stay longer, but there are many advantages of them for both sides. This includes flexibility, reduced risk, higher spreads, and less time bogged down in junk paperwork.
Extended Stay
Nomadic professionals love extended-stay housing. It can provide them a home base for several months or longer, and often provides more of what they want than an apartment they need to furnish.
Fractional Ownership
While fractional ownership is still a fringe concept in the U.S., it is one of the most popular ways to invest in real estate around the world. It can provide buyers all the benefits of homeownership, a vacation home, and investing in real estate, but with a fraction of the risk, liability, holding costs and hassle. This is perhaps most akin to what U.S. investors are familiar with in turnkey rentals, but with a given amount of time to stay each year. Professional management and non-resource loans can make it even better.
Concierge Services
Adding more concierge services to all of the above can be a great way to stand out and differentiate yourself from the competition. Piecing together a menu of optional services could also provide real estate companies, agents and investors many new relationships and referral streams. This could include everything from dog walking and pet sitting, to personal shopping, cars and drivers, personal trainers, maid service, technology and appliance and bike rentals, and more.
Hostels
While this may be a new niche concept for many U.S. investors, hostels could be ideal for serving this growing group. There is plenty of space to innovate and update in this realm.
Fantastic Internet
If there is one thing that nomadic professionals cannot afford to compromise or sacrifice on, it is high speed internet. The faster and more reliable the internet you can install, the better. In fact, this could be one of your best-selling features.
Aligned Marketing Channels
For those real estate professionals and companies that would like to embrace this section of the market, reach out through the channels these individuals are looking for housing on. This might include travel sites like Airbnb, travel forums, Craigslist, and collaborating with local chambers of commerce and travel agents.
Who knows; offering these services to others now might better prepare you for your own nomadic adventure without having to put off the perks and rewards of real estate investment.
