What a difference five years can make. Apartments.com surveyed 2,500 renters recently, and they found that renters want different things now than five years ago, and incentives landlords offer to get them to move may need to change as well.
There are solid reasons for differences, but the most influential is likely the far lower vacancy rates now than back in 2009 when vacancies hit a 23 year high. Landlords do not need to offer those big flat screen TVs, large rent discounts, or free rent months to maintain reasonable occupancy these days. The flight of first time buyers from the housing market hasn't helped the renters in their quest for a deal either. Competition and rents for homes and apartments have steadily risen.
The majority, 56% of renters surveyed, say that they plan to move within the next year mostly for a change of scenery, rather than for economic or other reasons. They also were asked what would get them to move immediately, and they cited:
• Big rent discounts.
• More space.
• Free month's rent.
These were reasons to act sooner than they planned, but they aren't considered critical in rental unit decision-making. When asked about the relative importance of rental incentives, survey respondents said:
• Nice to have but not a deal breaker: 33%
• Incentives are one of a few key factors in their decision: 28%
• Didn't see any incentive offers in their search: 20%
• Incentives are crucial, make-or-break in their decision: 14%
• Didn't care at all about incentives: 5%
Landlords can't get complacent, as only 6% of those surveyed said that they loved their rental so much they couldn't be convinced to move. Questions about why they rent yielded interesting results. As you may expect, about half of the respondents say they rent for financial reasons. However, more than a third of them stated that maintenance-free living was their primary reason for renting. Though we're a highly mobile society and workforce, only 13% rent because they need to be mobile.
Those are the reasons they rent and some of the factors that play into their decisions as to when to move. As far as what renters consider important in their choice of a rental unit or location, only 21% want to be in a "cool neighborhood or city." Factors important in their decision as to unit and location ranked this way:
1. Affordability: 71%
2. Safe area/Low crime rate: 57%
3. Convenient utilities/Amenities: 50%
4. Large rental unit/home size: 48%
5. Location near work or school: 38%
6. Parking: 33%
7. Pets allowed: 26%
8. Rental incentives: 23%
Some of these responses should be considered as important by developers who are making development location decisions. Perhaps the recent trend toward developing in big cities and popular urban areas isn't going to be as lucrative in the near to mid-term future; especially if the size of the apartment is on the skimpy side.
For investors buying single family rental homes, it's important to note the affordability and safety concerns at the top of the list. With location near work or school number five and behind home size and amenities, this could open up some neighborhoods for consideration previously dismissed or placed lower on the priority scale.