How much will your home rent for?
Date:May 13, 2013 | | Author:Jennifer Chan
Image by james.thompson via Flickr
Are you tired of residents moving in and out of your units each year? We’ve discussed how it’s more cost-effective (and less work) to retain tenants, but what if the type of property you own could encourage residents to lengthen their lease? According to a survey conducted by ORC International, a global market research firm, for Premier Property Management, renters of single family homes are more likely to stay put for five years or longer. For property owners, this means lower turnover rates, more stability, and reduced costs.
If you’re looking to invest in single family rentals, here are some results from the 2013 National Rental Survey that will help you understand this group of renters.
The single family rental sector has received lots of attention from investors who have been purchasing foreclosed and distressed properties in the housing downturn. As a result, it’s a fast-growing housing option: about 52 percent of all rental units in the U.S. are single family homes. Demand for these homes are strong, as shown by reduced listing time (six weeks in Fall 2013 compared to eight or more weeks in 2009) and increasing rent, rising one to two percent in 2011 and 2011 after declining in previous years.
Single family renters are more likely to stay in their current home than apartment renters. 26 percent of single family residents said they plan to stay in the home for five years or longer, compared to 22 percent of apartment residents. This stability could be the result of great property management: 80 percent of single family residents reported good or excellent service, as opposed to only 63 percent of multifamily residents.
For those who are saving to buy a home, are unable to get a mortgage, or don’t fancy the responsibility of home ownership, a single family rental is the next best thing. These renters value the space, privacy, and community of single family homes. Single family renters are twice as likely to have children in their household than multifamily renters. Their median income is higher than that of apartment dwellers ($75,000-100,000 vs. $50,000-75,000, respectively).
Three out of five single family renters said they plan to buy a home within five years. That’s 60 percent, significantly larger than the 44 percent of apartment renters who are on the road to home ownership. If you’re a real estate professional who works in both sales and rentals, this is exactly why it’s important to maintain great relationships with your past clients – today’s renters could definitely become tomorrow’s buyers.