In the last twenty years the renter pool has expanded well outside the age cohort of twenty-somethings. Renting as a lifestyle choice is very much a common happening today. As housing affordability has decreased in recent years more family’s have continued as renters further expanding the real estate investing universe (more rentals, more property for investment). So, who is in your tenant pool really?
Even though affordability has returned (all things considered) with lower interest rates, home ownership numbers are not increasing as jobs continue to be scarce and loans difficult to come by. When looking to fill apartments the bigger the qualified renter pool the better. Here are four cohorts to target:
- Seniors, young family’s and working professionals over the age of thirty, all are now mainstays of the renter pool representing a demographic who rent as a lifestyle. There is certain rental housing targeted for specific tenants; students, seniors over the age of fifty-five, etc. Everyone else should be in your tenant pool. Who is your target audience?
- Most everyone is aware of the non-discriminatory laws that we must all abide by. But can you stretch? Many older properties were not constructed for handicap access so they do not have to offer accessibility. But do you have a unit that can be converted for this use? Imagine how many people you can add to your tenant pool by offering a handicap accessible unit. Granted, it’s difficult to change door sizes, but sometimes just a few changes can increase the possibility of a handicap person selecting your property. Handicap rails in the bathroom for example. Or a doorbell with lights for a non-hearing person.
- Many owners have a no pet policy. There are many reasons for this and I would submit if you do not have to open up your property to pets then do not. But, right now we are looking for tenants to increase our pool of potential customers to fill our units. So consider making some units available for pets – small pets. Pets under ten pounds. Make sure to add a Pet Rider to the lease and spell out that if the pet becomes a nuisance to neighbors that it cannot stay. There are so many pet lovers in the world now is not the time to exclude them from our renter pool if you can possibly accommodate them. And have reasonable, one time, non-refundable pet fees. There is no reason to put this out there and take it away with high fee barriers.
- Active and over 50. Today, if you are age fifty you can join the AARP. Apparently, a single gray hair qualifies a person as being a senior citizen. These working professionals are not hanging out at the “center” quite yet, but they do need housing. They go to plays, they work out at the gym. They have some investments that create income to subsidize their wages. As renters, they want a hassle free environment where maintenance is timely and late night noise is minimal. While this cohort is not significantly active in electronic social media (they still buy newspapers and magazines) they bring income stability to a property as their length of stay is often longer than the average renter. Find out where they are in your marketplace.
Please note these suggestions for adding to your rental pool do not include lowering screening standards. There is no reason to increase occupancy AND turnover for non-payment. That’s a vicious cycle to be avoided. Do some brainstorming and add to this list. Every additional paying customer is one less vacant unit adding to NOI.
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