Speakers: Ronn and Martin
Martin: All right. Welcome back to the multifamily podcast with Ron and Martin. I am super excited about today’s show. But before we jump in, what’s been going on, Ronn?
Ronn: Well, hello. Hello, everyone. Hello, Martin. Good to see you. Good to chat with you again. It’s August, late August, end of summer q4, obviously is approaching very fast. I cannot believe we are towards the latter homestretch of 2022. The economy is wild, interest rates are up. Single Family real estate, market is quote unquote, slowing down. Let’s see how that works. The worldwide uncertainty. So, a lot going on, right? Oh, yeah, obviously. Meanwhile, apartment SEO continues to grow across the country. Super excited for all of our listeners to meet our new hires coming on board in our sales and account management team, have about six plus just this month, and next alone that just start joining the team. So, a lot of things going on.
Martin: Yeah, definitely excited. And plus, we’re gonna be prepping to have some of our own team members on the multifamily podcast to share some of their expertise and experience in the field.
Ronn: Totally. That’s gonna be great.
Martin: So yeah, so the first topic today is around an article that you actually sent me, Ronn, and we thought it would be great to share with our audience, its focuses around the multifamily sector needing 4.3 million apartments by 2035. And the source of this was PropModo.com. And then we will be getting into some big Google updates the multifamily industry needs to know about, things are always shifting in Google land. So, it’s important to stay in the know. So, let’s get right into it. So, for the first article that we’re going to be reviewing together, multifamily sector needs to add 4.3 million apartments by 2035. And the source was from PropModo.com. It reads, in order to meet the projected demand for housing in the US, 4.3 million apartments must be added by 2035. According to a new report from the National Apartment Association, and the National Multifamily Housing Council, the projected total includes 600,000 units that are needed, just to bring the five plus rentals buildings with five apartments or more back to the equilibrium.
Ronn: Yeah, so according to page 193-page report, 600,000 apartment deficit is obviously a direct result of a lack of construction that has occurred in the wake of the 2008 financial crisis. The deficit has obviously since snowballed into a much bigger problem, that we’re all failing. And due to the under production of housing, apartment rents, obviously have risen, we’re going to go into some stats, but in some cases, upwards of 25% since last July alone, and obviously affordable units, as we know have continued to dwindle, which we need a lot more of those. In fact, 4.7 million apartments with rents of over $1,000, a month or less have vanished from the market. So, a lot going on there.
Martin: Yeah, so apartment demand continues to be driven by population growth, young workers leaving their parents homes, older people downsizing from home ownership and immigration, the report speculates that demographic growth will push demand for another 3.7 million new five plus rental properties through 2035, or an average pace of about 260,000 apartments per year. But in addition to a newly constructed units resulting from net new demand, a sizable amount of the new rental housing builds will also need to replace aging buildings, over half of the five plus rental stock was constructed prior to 1980 in 14 major US cities.
Ronn: And you know, what I thought about just now is that I remember seeing a news article recently that skilled labor is actually down as a job source. So, anybody listening who has family or friends that want to get into the industry, they were saying how there’s such a need. Obviously, there’s such a need for just multifamily housing, let alone other housing to meet the demands. And if we do have a skilled labor issue, now or in the future, you can only imagine that any stats that we’re sharing, according to these articles, could be even more catastrophic. So, get out there, for those that are skilled enough. I don’t know how to hammer a nail in or if you paid me, but I’ll figure it out.
Martin: Definitely surprised by the stat, you know, the needing larger family style apartments, I know it’s pretty uncommon to see five plus bedroom apartments. Normally we’re seeing studio 123, maybe four bedrooms, the five plus is really kind of pushing it. So yeah, so any thoughts there on how maybe the multifamily industry or maybe other companies might be solving this problem?
Ronn: Yeah, I know, for sure, obviously, I think that’s what we saw the rise of single-family home rentals with companies such as Tricon and invitation homes, is, you know, back in the 2008 financial crisis, when there was a bunch of homes coming back and people were losing them in droves. The banks had to like offload them and there were some very smart people out there I know you and I talked about it back in the day about like, just, you know, buying a couple, well, they bought tons. And it started as a temporary solution. But it really turned into a full-time business model. And I think that was the solution for the residents, and also for the lack of multifamily supply. So, I really believe that while we do have the house, multifamily housing shortage, overall, some of it has been absorbed in the single family. And it does represent the larger three plus bedrooms that you guys, that you talked about, are like you know, shacking up together.
Martin: Definitely and Tricon and invitation homes, if any of your team is listening out there, we’d love to have maybe the CEO or one of your team members on the show to talk more about single family and what’s going on there.
Ronn: A lot to learn there.
Martin: Yeah, so continuing on with the article, the study does point out some regional variations. Texas, Florida and California will account for more than 1.5 million new housing units, or 40% of net new demand through the year 2035. However, secondary cities typically take the lead in terms of percentage growth. It is anticipated that growth in Boise, Austin, Las Vegas, Raleigh, Orlando and Phoenix will be at least twice as fast as the national average.
Ronn: Yeah, and other markets, including Nashville, Austin, Charlotte, Raleigh, Jacksonville, Orlando, Phoenix, and of course, Denver, with obviously Nashville, Austin and Phoenix experiencing the strongest ramp up in total deliveries. Definitely Tampa, Las Vegas and Dallas, a lot of these names, you guys know, a lot of cities, you’re probably not surprising. But they’re actually big migration winners, but they haven’t ramped up deliveries on the new units. So, while people are moving there in droves, they again, there’s just a natural supply issue going on. But overall, several markets will receive plenty of product into this year. So, let’s hope there are no more delays with permits and all of the above.
Martin: Yeah, and we are seeing a big boom in like places like Texas and Vegas. But again, you know, with climate change, I think that’ll also probably make some things happen as well, like we just saw Dallas have thousand-year flood. And so, if you saw some of the news on that with how it looked in Dallas, you know, some of those changes, some of its maybe other areas getting too hot to bear, you might see people start migrating into different areas. You know, we’re maybe climate change, not so much affected.
Ronn: So, the West, and the West needs that water, California, where we’re based out of.
Martin: So, the dynamics of the multifamily market have changed, population trends and migration patterns, aging, infrastructure, and other building have all culminated into a full-on housing crisis. The lack of affordable housing is presenting an opportunity for multifamily developers, as a massive supply of homes are and will continue to be needed in the United States. So hopefully more supply can be created to keep up with rental demands and keep prices from rising too fast. So, I know we have, Ronn, you can share some of the stats that you have from the one other webinar that we recently attended with Zonda.
Ronn: Yeah, Zonda is the great, I always reference them, if you guys haven’t joined them, you should sign up for their email alerts. They do a lot of like single family and multifamily housing, and actually economic updates, typically quarterly and or for the year. So, I always get a lot of my Intel and insight from there. What they did say out of all of this whole housing issue, what I realized is Zonda quoted, it was actually really a real page data, that about our average rental, renewal rates in the industry have been 51%. That’s our overall average. But in q1 of 2021, it rose to 53%. And actually, this year, in first quarter of 2022, it grew up to 58.3%. So almost 60% of residents are choosing to renew, which is a good thing. Obviously, that’s what a lot of people want. It’s also afforded the ability of raising rents, as I mentioned earlier, upwards of 25%, just since last July, with the overall average right now being about a 10% increase. So, I know for a lot of the owner operators out there, or even third-party managers, everybody listening, it’s in the industry, that’s the life you’ve been living, it’s been a very fast life, we’ve been able to absorb that. And with that being said, I don’t think we commented on it earlier. But because of these rising rental rates, it’s also helped mitigate some of the rising construction costs for a lot of these new builds. So, if you’re in, obviously existing housing, and you have new construction as a company, you can pay for it, basically.
Martin: That’s awesome.
Ronn: Yeah. So, Martin, I know that was a great topic. I’m so glad we brought it to the forefront. Hopefully, if you guys hadn’t seen any of those articles or the webinars. This was good intel for you. But I know that when it comes to Google, we are always internally and even our clients across the country, always look to Martin as a national speaker and an intelligent voice for all things search. So, let’s talk about the Google updates you were mentioning earlier.
Martin: Yeah. So, we have two really big Google updates. One is an algorithm update. This one was called Google’s helpful content update, and this is where it’s basically focus on people first content. And Google has a list of questions that when you are creating content or any kind of experience digitally, they want you to be asking yourselves these questions when creating your website. Do you have an existing or intended audience for your business or a site that would find the content useful if they came directly to you? Does your content clearly demonstrate firsthand experience and depth knowledge for the expertise coming across, around your product service or even local area? Does your site have a primary focus or purpose? After reading your content, will someone leave feeling they’ve learned enough about the topic to achieve their goal? Will someone reading your content leave feeling like they had a satisfying experience? And then also, are you building brand authority on Google business profile and other publishing platforms, so you can’t just be writing for SEO anymore, is going to be about you, as an individual author or the actual company as an author. So, whether you’re publishing on Google business profile, which is going to be more of a publishing platform, where our communities are going to want to be pushing out content on a daily basis, because that content will be stored and saved in Google business profile, thus having more opportunities to be shown for different longtail searches.
So, besides the reviews that you’re getting on your Google business profile, and the actual responses you’re making, and all your google Q&A, content, all the images, you’re uploading, even reviews, even getting reviews with images, all these different types of engagement on the Google business profile is going to help get you more authoritative, and more overall presence on Google. So, avoid creating content for search engines first. Here’s some more questions that you really want to be asking when creating content, according to Google, and a new update, is the content primarily to attract people from search engines, rather than made for humans? Are you producing lots of content on different topics in hopes that some of it might perform well in search results? Are you using extensive automation to produce content on many topics? And this is a big one right here. And I’d say for the most part, the industry is not using automated content. On a huge level, there’s a rise in artificial intelligence type content, where if you need to have a blog post written instantly, you could just plug in a few keywords are instantly generated based on a topic. And this certain AI content programs will actually push out content, but you can tell it’s somewhat automated. And, you know, they make it sound like it’s good. But Google has ways to kind of sift through that.
So, if we’re creating an apartment website, for a community in a specific area, you want to become a local authority, whether you’re in DTLA, downtown Oakland, any kind of submarkets that you want to be a part of, it’s going to be important to create pages about these different locations and areas. So, you can build linkable assets, whether it’s a local directory, maybe it’s an info graph, graphic talking about all the local hotspots, maybe it’s a video that really talks about the whole local area, all of this type of content is going to really help build your expertise at the individual level and at the company level. So, for communities, it’s going to be important to build your company brand, beyond Google business profile, be on LinkedIn, even other platforms that publish like WordPress, where you can build up your authority on the web as a publisher. And then over time, you know, this update is actually going to help you rank better in Google as you build up your brand, and authorship authority in Google’s eyes.
Ronn: That’s awesome. We used to call it romance language. So, we got to romance our customers, once again, right? Not just romance the search engines.
Martin: Most definitely, it’s really important, even more than ever. So, we’re gonna be pushing out more information and more content about this. And keep you guys updated, as we know more. But keep an eye on your local rankings. Track, make sure you’re tracking rankings for desktop or mobile, in Google Maps, and in Google organic, so you need to keep a pulse on all those because depending on how Google sees your website, is going to rank each of those accordingly. Okay, so the next one is actually a big Google Ads update. And this is about a new campaign type, it’s called performance Max, Pmax for short. And this is one very powerful campaign that takes advantage of all the different Google assets in search and display. So of course, Google, if you’re running a search campaign now, any other campaigns are running, Google wants you to keep running those campaigns, and add on a performance Max campaign with additional budget. And so, your campaigns already working that you have currently, or maybe you don’t have one. But either way, you know, Pmax is to expand overall and take advantage and get other opportune moments where your other campaigns maybe didn’t capture them. And so, it takes advantage of Google search. You’re also able to take advantage of Google Maps, google discover, Google Gmail and maps and also a part of it display networks. So, you really get to touch all of the Google assets all from one campaign.
And so, you are spreading your budget a little bit thinner across all the major platforms. But it is a great way to get more qualified traffic on top of what you’re already getting with the search campaign and other display campaigns. So, as we move more into the performance max age, being able to set up, you know, a goal-based campaign, using the smart bidding and keywords is based on keywords, it’s based on the videos and the assets you put in the images, the texts. And it’s putting that all together and creating the best ad experience for that particular user at that perfect time. There’s definitely a lot of fun things coming down the line with performance max. And again, we’re going to be getting more of our clients into performance max, setting them up, launching their campaigns. And so, we look forward, if you have any questions about that, you can always just, you know, reach out to apartmentseo.com, get your free marketing analysis. And also, we can dive into, you know how performance max could actually work for you. And, you know, get you all set up and good to go. Ronn, what do you think about that? Any final thoughts?
Ronn: No, that’s amazing. I mean, the whole time I’m thinking, and I’ve always said this, and not just because we own apartment SEO as a digital marketing agency. But this is just another reason why you should have some, either a really good consultant, very good people in house that can manage your SEO and or paid strategies. And or I would be remiss if I didn’t say hire a digital marketing agency, whether it’s us or anyone else, I’ll say it that way. Because there’s always changes going on. And I think that that’s exactly why I’ve loved working for decades in marketing, digital marketing in particular, because no one day is ever the same. And Google helps promise that, so thanks for sharing those stats. That’s powerful.
Martin: Definitely, I’m working with the premier partner, you know, we work hand in hand with Google, you know, they keep us attuned to what’s going on, all the new campaign types. And when we are running new campaigns, you know, they give us all the knowledge needed to make sure that they run right from the get-go, we make sure to get all your digital assets from the text copy to the images and the video, all of that is going to make a big difference in your performance max. So, the better-quality assets that we can deliver in the campaign, the better that I believe Google will and the users will see that data and they’ll be able to mix it up and really deliver to that specific user, the message that you want to get across to really get that qualified traffic you need. So overall, you know, make sure to subscribe to the multifamily podcast at multifamilypodcast.com. And if you want a free marketing analysis, just head over to apartmentseo.com and feel free to reach out there and we can set you up with a demo and review more about your community overall. So, until next time, Ronn, you know we won’t be too long before we push out some new episodes. We got some exciting guests on the way, so look out for that.
Ronn: Totally. Can’t wait for the next episode too. Hope you guys enjoyed it. Have a great day.
Martin: All right. Bye.
Ronn: Bye, bye.