The best way to ensure the financial success of your rental property is to keep vacancy rates low by encouraging your tenants to rent for longer periods of time. Tenant retention is essential to establishing a reliable stream of income and building sustainable a cash flow from your rental property. However, it can be challenging to know where to look for qualified renters when you do experience tenant turnover. Real Property Management Southern Connecticut, one of the leading firms for real estate management in Greenwich, is continually analyzing the most effective marketing strategies for their clients and looking for untapped markets to reach. In addition to focusing on traditional target markets, our professional property managers encourage clients to consider some often overlooked renter markets. Here, we’ve detailed three renter markets that landlords would be keen to remember when searching for their next ideal tenant.
Don’t Overlook Recent College Graduates
It may come as no surprise to you that college students and recent grads are more likely to rent than purchase a home. However, the reason for doing so may not be so apparent. In past decades, having a college degree was a significant factor in a person’s ability to land a higher paying job, which in turn could afford them the chance to enter the housing market by purchasing a home. However, as student debt continues to grow, its negative effect on the housing market becomes more apparent. According to a recent study by John Burns Consulting, student loan debt has had an extreme impact on home sales. The consulting company estimates that 8% of all home sales did not take place last year due to buyers being weighed down with student loan payments. This issue is estimated to cost the housing market $83B per year according to the study.
One thing is for sure, as these young people delay purchasing new homes as a result of excessive student debts, they are still need a quality place to live. It is at this juncture where rental home properties can tap into this market and fill the need. Our real estate management in Greenwich suggests marketing your property as a stepping stone for these renters toward their future financial goals; a kind of “have your cake and eat it too.” Position your property as a home where working graduates can have the comforts and autonomy of living in a single-family home without the financial responsibility of carrying a mortgage. This could be incredibly appealing to graduates who have had their fill of tight communal living quarters. While Southern Connecticut is experiencing growth in both population and new job opportunities, it becomes a magnet for this demographic of renters. Don’t miss out on the potential of this market.
Don’t Overlook Pet Owners
Renting to pet-owners is a hotly debated topic in rental real estate. With the biggest concerns against allowing pets in rental property being noise disturbances to neighbors, property damage caused by pets and insurance liability, many investors avoid the risk altogether by denying pet-ownership outright. However, our professional real estate management in Greenwich warns investors that they could be missing out on a huge population of prospective renters by doing so.
According to the American Veterinary Association, one out of every two renters have pets, and 35% of those without pets stated they would have them if they were allowed in their current housing situations. A considerable number of renters with pets questioned in the study stated their willingness to pay excess rent and a pet deposit in order to keep their pets.
“Because of their ability to charge a separate pet deposit which can range anywhere from 40-85% of the rent, and charge a larger deposit up front, property owners who allow pets in their properties are seeing their bottom lines increase substantially,” said Lukas Krause, CEO of Property Management Business Solutions, the franchisor of Real Property Management. “Real Property Management encourages property owners to allow pets whenever possible as a means to assist them in achieving financial goals faster.”
According to the research by Firepaw, a nonprofit organization that works with landlords to provide pet friendly housing options through tailor-made programs and customized pet policies, the damage caused by animals is only slightly more than damage caused by humans. Concerns related to prospective property damage are easily offset by charging 20-30% higher rent rates to cover increase insurance costs, repairs, and maintenance. It’s a risk worth taking when you consider the benefits of having long term tenants and lower vacancy rates thanks to the shortage of pet-friendly homes. Appealing to this market will set you apart from your competition and open up your applicant pool, giving you greater flexibility in finding the right tenant.
Don’t Overlook Empty-Nesters
You may not give much thought to marketing yourself to empty-nesters because the assumption is that they are already homeowners with no reason to leave. However, more and more adults approaching retirement are finding that life after children is the perfect time to invest in themselves, and not in a home. Even those with significant wealth, are eager to downsize and embrace the freedoms of renting. According to a 2013 report from Harvard University’s Joint Center for Housing Studies, the baby boomer generation will contribute approximately 2.2 million more renters to the renter population by 2023. In the next decade, this demographic is expected to continue to make up close to half of renter growth overall.
When marketing to empty-nesters, RPM Southern Connecticut, the premiere real estate management in Greenwich, suggests painting a picture of the benefits of renting compared to the costs of homeownership. Appeal to their desire to avoid managing the kind of upkeep a larger home requires. Mention the costly maintenance and homeowners’ association fees they could save by renting. If their home mortgage is paid off or close to it, note that the presumed tax-advantage isn’t significant enough to offset the overall costs. Appeal to their desire for more predictable monthly expenses. Make the case that downsizing to a rental as retirement approaches makes better financial sense. By appealing to the kinds of freedom that renting offers, you are more likely to capture the attention of this untapped market.
How Our Professional Real Estate Management in Greenwich Helps You
When investors partner with Real Property Management, they have access to the tools they need to position their rental property as a solution to the unique problems of these often overlooked rental markets. Because we offer services like customized rent assessment, a 24/7 emergency maintenance hotline, streamlined rent collection, and a proprietary incentive program for tenants, landlords are able to focus on growing their investments, not simply managing the day-to-day needs. Call us today and see how we can help you reach new markets and grow your investment.