Last month, Freddie Mac released a new survey profiling today’s renters and their respective sentiment. Here’s how the findings compare with September 2016 and what the figures mean for property managers:
Inside Freddie Mac’s New Survey
Renters are now feeling more confident about their financial situation than they did in September 2016. The survey from last fall found that one in five renters said they could not afford the essentials; this year, that figure is down 6 percent. The survey also found that 45 percent of renters reported having enough to cover their expenses throughout the month, with 41 percent reporting having enough money left over after every payday.
45 percent of renters reported having enough to cover their expenses throughout the month, with 41 percent reporting having enough money left over after every payday.
In addition, surveyed renters of all ages and from all locations noted the increase in confidence toward their finances. However, the largest increases in confidence from September 2016 to April 2017 were seen in rural renters and baby boomers.
It was also reported that most renters, 55 percent, were satisfied with their apartments and did not plan to move. Renters planning to move in the next two years fell from 38 percent to 33 percent. Even amidst rent increases in the last two years, most renters anticipated that they’ll stay where they’re at because they’re content with the overall situation. These numbers suggest that more people feel positive about being renters and have less of a desire to become homeowners than in the past. In fact, only 15 percent of renters reported working toward homeownership.
The findings also reflected a preference for urban areas. Three-quarters of survey respondents said they would be willing to downsize to move to an urban area. Property owners who are considering buying additional properties should consider investing heavily in urban locations while decreasing the percentage of their real estate portfolio in rural or suburban communities.
Three-quarters of survey respondents said they would be willing to downsize to move to an urban area.
What the Data Means for Property Managers
The new numbers and rental trends spell good news for property managers who want to hang onto their existing tenants and enjoy stability at their managed properties.
With more people choosing to rent, property managers can benefit from these happier tenants.
It’s wise to focus on this tenant satisfaction by increasing opportunities to build community spirit at your properties, especially with the use of communal amenities that naturally bring tenants together. If you are planning on a remodel, consider doubling down on shared spaces that include elements like fire pits, billiards, barbecue and picnic facilities, and more. These amenities encourage people to hang out at their apartment rather than go out to a bar with a pool table, for example.
This type of camaraderie plays a role in keeping your apartment turnover low. Property managers can also decrease the amount of time they need to spend on advertising units and screening tenants. Instead, they’ll be able to focus on higher priority tasks, like providing customer service onsite or keeping up with maintenance requests.
Knowing that your properties will likely see increased stability in the future, you may want to renovate units when existing tenants give their notice. If your other units are bringing in stable income, stick to renovating the units that are experiencing a change anyway to decrease risk. In addition, by refreshing an apartment or renovating a tired bathroom, you can ask for more rent when the unit returns to the market. This strategy is recommended for multifamily property owners and managers who are likely receiving rental income that offsets the expense of renovating.
With the expressed preference for urban apartments, property managers in cities can get away with charging top dollar for rent at their units. If you have rentals in your portfolio that are in great locations but aren’t commanding top rent because they need attention, now is the time to update and renovate.
By paying attention to the findings from Freddie Mac and other renter feedback surveys, property managers can be equipped to make make smart decisions concerning their properties. It will be well worth the effort when you experience high-level satisfaction, low turnover rates, and happy renters.