[REN #421] What Tenants Want (A Changing Checklist)

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picture of red and white door for Real Estate News Podcast Episode #421

Landlords are catering to a whole new kind of tenant. These renters are the ones who “choose” to rent and come with a longer list of requirements. According to a new survey, of more than a quarter million renters across the U.S., there are several new trends that landlords need to consider.

As we’ve seen, the number of people who rent has grown significantly since 2011. The Census Bureau said we are seeing an additional 1.7 million renters each year. And, many of them won’t settle for the minimum. Instead, they have a growing checklist of the kinds of amenities, features, and services they expect.

The latest survey on renter trends, by the National Multifamily Housing Council, gives us a peek at the new breed of tenant. It began as a way to analyze tenant preferences and has expanded to show us what renters are considering while searching for, and deciding on, what’s best for them (1).
 

Top Trends for 2017

One of the top trends for 2017 is all about the short-term renting of a leased apartment. Renters want to be able to generate additional income, and almost half of those under the age of 25 said they want to be able to sublet their apartment on sites like Airbnb. That percentage drops as the renter gets older, only about 15% of renters age 65 or older want to sublet. So, this information is very important for landlords who rent to millennials.

Another top trend for 2017, is the importance of online reviews while searching for a new place. They want to see what other people say about an apartment complex. And, even more importantly, they want to see how property managers respond to those comments, especially the negative ones. More than 80% of the respondents said they expect property managers to respond to pretty much all the comments.

With the rise of online shopping, package delivery lockers have also become very important. The survey shows that almost half of the respondents get at least three packages a month, and that more than half of those receiving packages want lockers.
 

“Must-Have” List for Renters

The report also cites several things that renters cannot live without. At the top of the list is air conditioning. While 94% said they would like to have air conditioning, 92% said they could not live without it.

About the same number of people would like high-speed internet access, but just 64% said it would be a requirement. That’s still a high percentage however, so high-speed internet would be a good selling point, for landlords and property managers.

Other must have amenities include: soundproof walls, a washer and dryer inside the unit, and a dishwasher. Wow, 77% said they won’t live without their own washer/dryer while 86% said they won’t live without a dishwasher!

As for what they must have “outside” their apartments: Cell reception hit the top of that list. Security was big for both parking and common areas. Many also want a swimming pool and a fitness center.
 

The Future of Apartment Rentals

This data is not just important for today’s landlords, but also for tomorrow’s developers and investors. The NMHC recently estimated that the apartment sector will need 4.7 million new apartments in the next two decades. The Council’s VP of Industry Technology Initiatives, Rick Haughey, called this “a pretty long runway for new apartment development.” So, Haughey feels that there’s time to adapt, but the changes are already underway.

While analyzing the needs of future renters, it’s important to look at why they are choosing to rent in the first place. Haughey talks about how public opinion on renting has changed, saying, “Apartments have long been painted as a housing option of last resort. However, survey data shows that today’s renters choose apartment living for a wide variety of reasons.”

According to this survey, 23% of the respondents said they are renting because it provides convenience and lifestyle flexibility. They are not tied down by homeownership or a mortgage.

Another 18% said they are busy saving up for the down payment. They would like to have their own home, but can’t afford it yet.

Eleven percent said they had just moved and hadn’t made any big decisions about long-term housing yet. They were still in the neighborhood exploration stage.

Ten percent said they were renting temporarily. They had apparently owned a home previously and were preparing to buy another home.

The last 7% said they liked to rent because of all the great amenities that apartment living provides.
 

Why Renters Choose to Move

What Haughey finds even more interesting is “why” renters choose to move.
According to this survey, the most important reason cited by renters is to get lower rent, presumably with all the same options. But, paying less for an apartment was the primary reason for moving (2).

Second on that list is the quality of the apartment management. If renters are not happy with the managers, they will look for a better situation.

Apartment features were third on the list, followed by community amenities, and lastly, by the apartment floorplan or layout.

Haughey said, “A deeper understanding of the needs and wants of apartment renters across the U.S. … is paramount,” That’s not just true for multi-family units, but single-family rentals, as well. You will definitely attract more and better tenants if you are offering the things that they want the most.
 
Links:

(1) Summary of Study: World Property Journal

(2) Rick Haughey Article

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