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By Evelyn Long
Now and then, demographics will lean a certain way, pressuring the market to bend with it or fail. New trends emerge, and you should follow these changes to make the most of your investment properties. That way, you can maximize your ROI and provide the best service possible for your tenants.
Analyzing the common demographics of today’s renters can help you get a leg up on your competitors and better understand what people want to see on the market. Subscribing to these trends may help you retain your current tenants and find new ones to move into vacant properties.
Some may come as a surprise, but others might be expected and will likely not change anytime soon.
1. Younger Renters Reign
It shouldn’t be a surprise that most renters are young. Nearly 50% of all renters are under 30 years old. Because of their age, they can be unpredictable. They may move after just a year or two with you, and you won’t find them likely to stay if they have dreams of owning their own home.
According to Statista, almost 10% of renters are senior citizens who are 65 or older. This number might be surprising to some who assumed older people would own homes at their age. The bulk of renters are young adults and older adults, while other ages fall somewhere in between.
2. Older Folks Renew
Though they may only make up a small percentage of the renter market, senior citizens are more likely to renew an expiring lease. When people are settled, they aren’t as likely to move around and change addresses as someone in their 20s might.
This means you should consider rentals that are prime for older tenants if you want to retain a renter for years on end. It’s an often underserved market with a high demand for amenities and comfortable rentals.
3. Public Transportation Isn’t Priority
You may think access to public transportation is a boon for your property, but unless your building is located in a more urban area, it’s not as likely to affect your tenants. Fewer renters rely on public transportation to get to work than you might think.
Just over 40% of workers telecommute at least once throughout their working month. Of those who commute to the office, 75% of renters take a car, taxi or some other motorized vehicle. Only around 10% of renters rely on public transportation to get to work.
Of course, how this trend affects a real estate investor’s decision making will greatly depend on whether they are working in a dense, urban market or another part of the country.
4. Pets Are Family
If you haven’t marketed your rentals as pet-friendly, now is the time to upgrade them. About 90% of renters say they have a furry family member, and of that number, around 80% say pet-friendliness is a factor they look for when searching for a place to rent.
While it might require some extra money upfront to pet-proof your rental properties, you can consider implementing a one-time fee that could cover any potential damages an animal creates during your tenant’s stay. Denying access to furry family members likely won’t fill many vacancies.
5. Rental Rates Are Higher Than Ever
More people are renting than ever before in 50 years. In just a decade, the number of renters grew by 7.6 million people. The rental market is essential — you’re providing people with a home while you support your own family and grow generational wealth.
Additionally, renting is still more affordable for many people. In many cities, particularly those seeing the most growth, renting is still cheaper than homeownership. This is not necessarily the case in more suburban or Midwestern markets, where young renters might have down payment savings on the mind.
Regardless of your location, don’t underestimate the future of the rental property market. Rentals are always in demand.
6. Mobile Search Is Increasing
However you choose to advertise your property, make sure it’s optimized for mobile viewing.
From 2020 to 2021, the number of people searching for rental housing on their phones jumped 9%. Now, 74% of people search on mobile, while 73% use computers. Mobile searches are growing exponentially, so targeting this audience with optimized marketing is vital.
Choose Your Renter Niche
As evidenced by these demographics, it would be easier to find your niche and pare down. Do you want to cater to renters with dogs? Pet-proof all your rental properties and search for ones near dog parks, veterinarians and pet supply stores.
Appealing to a niche group will lower your competition, too. You may be the only landlord or investor around that caters toward a specific demographic and works with them and their income, whether it’s fixed or unlimited. To continue thriving in the rental business, appeal to your ideal tenants.
Author
Evelyn Long is the editor-in-chief of Renovated. Her real estate work has been published by the National Association of REALTORS®, Rental Housing Journal, and other online publications.
