Getting renters quickly is a top concern when buying a rental property. Set yourself up for success by zeroing in on the things that renters are looking for
By Allen Taylor
An annual survey by NMHC and Kingsley Associates, and reported by National Real Estate Investor Online, reveals the things the top priorities for apartment renters when looking for a home. Landlords, multifamily developers, and rental property investors would do themselves a favor by paying attention to renters’ needs—after all, your profits are directly tied to your ability to deliver on those expectations.
The number one feature renters want is central air conditioning. That might not be a huge surprise, but did you also know they’d rather have on-site childcare than a fitness center?
There are other interesting results, as well.
What renters want
The same survey was conducted in 2017, asking what apartment renters wanted for 2018. The results may surprise you.
Eighty-two percent of respondents wanted fitness centers, even if they don’t use them. In fact, 41% of those surveyed said they rarely use them. Nevertheless, renters were willing to pay $31.75 per month for the opportunity to stay in shape.
Two years ago, renters wanted package lockers: fifty-seven percent of those surveyed were interested or highly interested in this feature. Forty-seven percent reported receiving at least three packages per month.
When it comes to outdoor space, four out of five apartment renters wanted a patio or a balcony. Two-thirds were interested in shared outdoor spaces and common barbeque grills. Almost half noted a playground or community dog park on their list of desired amenities.
One area renters two years ago had in common with those today was their interest in smart technology (or lack thereof). Only 14 to 17% said they wouldn’t rent an apartment if it didn’t have a smart thermostat, smart lighting, or smart locks. If it had those features, however, they were willing to pay an extra $30 per month for them
What renters are willing to pay
Knowing what apartment renters want is one thing; knowing how much they’ll pay is another. According to the survey, 95% of people want air conditioning and are willing to pay an extra $40.98 each month for it. The 94% of people who want soundproof walls are willing to pay $37.94 per month. The additional rate for a garbage disposal is $27.09 per month, and 92% of respondents said they want a garbage disposal.
Ninety-one percent of apartment renters want reliable cell reception and are willing to pay $30 more to have it, but only 85% want a swimming pool and controlled access. They’ll pay $44.78 more in rent per month for on-site childcare, and $38.86 more for valet parking.
What renters don’t want
What apartment renters don’t want is just as interesting as what they do want. Sixty-nine percent are definitely not interested in co-living spaces. Sixteen percent said they “probably” would not be interested. Twelve percent said it depends on price, and four percent are definitely interested.
For voice-activated technology, 66% of respondents are not interested versus the 34% of respondents that are.
Implications for real estate investors
It’s one thing to know what renters want and don’t want, but it’s another thing entirely to deliver on these things. When it comes to changing apartment amenities to meet the demands of renters, investors should consider a few things first:
- What are the local desires of renters in your area? This is important because geographical differences can play a part in renter expectations.
- Will the cost of changing amenities result in a return on investment enough to make it worth your while? This is where you’ll have to do that math.
- Renters’ desires can change rapidly. Do you really want to convert that fitness center into a childcare center only to find out two years from now that renters want a fitness center? What will you do with all that equipment in the meantime? Take the flexibility of your property into account.
The bottom line is, you’re in business to make money. If you’re developing from the ground up, it makes sense to build for today’s expectations. If you’re buying an apartment built with amenities from two-year-old expectations, it might not be worth the expense to convert your amenities. Do your own due diligence and do what is best for your pocketbook. That goes for investors in marketplace properties, too.
Sharestates is an online marketplace lending and investing platform. To access investors, investors or borrowers can create an account and present their project for review. Using a 34-point underwriting process, the project will be vetted to see if it meets investor expectations and can be funded from more than one source.
