Data from J Turner Research and Appfolio says that we are in the middle of absorbing 80 million Millennial renters. So what properties are they looking at the most? How might this compare to what other generations are trending towards? What can you take from this information to make your rental portfolio perform that much better?
Surveyed renters reported the three most important factors impacting their decision to rent:
- High quality units
Several renters also identified the home’s proximity to work, its value and condition as some of the most important aspects they were looking for. Must have amenities, on the other hand, included the following:
- Walk-in closets
- In-unit laundry facilities
- Balconies or outdoor areas
Renters cited the following as bonus amenities:
- Fitness centers
- Outdoor swimming pools
Appfolio suggests you do the following when looking for new renters:
- Update lighting, flooring, appliances
- Include Wi-Fi
- Maintain constant communication with renters via social media
- Partner with local businesses like yoga studios to offer more perks to tenants
What Generation X Renters Are Looking For
A lot of these trends hold water for Generation X’s rrequirements. However, they are at a different stage in life than, say, Millennials. Most are just getting back on their feet after the crises. They are in peak earning years, but also peak spending years. Kids, insurances, retirement savings, and investing all have an impact. Some are part of multi-generational households, others are freshly separated. Most have reported that they want to own homes. They may still be working out some credit issues or waiting for mortgage underwriting to loosen up, but they either want to position themselves to buy, or if they feel they can’t, want to live like they did own.
So what does this mean for real estate investors and landlords? One group will be eager to keep rent down, so they can save up a down payment. They may be willing to sacrifice some of their wants if they know this is a short term situation. They may make exceptions if there is hope to buy this rental later, with a lease option or rent to own offer. Others may be willing to pay a premium for short term and month to month rental agreements.
The other group may be settling in to rent for the long-term. They want to keep their families happy. So they may trend towards what they would look for in a home, as a long term rental.
What Boomer Renters Are Looking For
Let’s not forget boomers. They are one of the most active populations in the market at the moment. Many are retiring, downsizing, and heading off to better weather. Some are cash rich from being able to sell homes, others have lost a lot in the stock market and have little equity, but may anticipate retirement savings being able to cover renting. However, they are likely trending towards modest spaces, in safe areas, near good healthcare, with good transportation.
Serving Renters Better
The most successful landlords and real estate investors will take all of the above into account when making acquisitions, and renovating units. They will get to know their tenants, and who are the best prospects for their units. They will learn to speak their language, highlight the right features, and meet them where they are. Most importantly, they will make it easy and appealing for renters to do business with them. Too many have lost sight of this most important piece of the puzzle. That leaves a great space to fill for those that want to win.
What do renters want today? They want location, quality, and the amenities which support their lifestyles. Millennials are a massive force in the rental market, and will be for years. Yet, investors shouldn’t discount older generations either. Know your renters, talk their language, serve versus sell, and you’ll reap the rewards you got into real estate for.