Tenant Statistics that will Blow Your Socks Off
According to the “rental clock,” there are at this moment 109,487,821 renters in the U.S., and 22,496,335 landlords. The number of renters increases by more than 2,000 every day. Appealing to tenants can be a challenge, so it helps to know with whom we’re dealing. Read on for a discussion of facts and statistics that might surprise you.
Among other interesting stats on the rental clock site is the fact that more than 50% of all renters are between 25 and 44 years of age. Bearing that in mind, it’s pretty important to understand the so-called Millennial generation, and how their attitudes are influencing the rental market. Here are some facts about this critical demographic:
● They show a preference for renting over home ownership. This is partly due to the financial crisis, which forced many people out of their homes and made it harder to get a loan. It is also often chalked up to student loan debt, which totals an incredible $1.2 trillion.
● Millennials are concerned with sustainability and are looking for ways to be environmentally responsible.
● They favor living near the city center and are willing to give up some space for the amenities and culture at their urban doorstep.
● They value community and appreciate the social opportunities that apartment living can afford.
Technology is the Gateway
In both residential and commercial real estate, there’s no phase of the process that’s untouched by technology. Here are some stats on digital activities that our tenants are involved in:
● More than half of prospective tenants in CRE reported turning to the Internet first for property information, in a study published recently. 86% of the respondents used the Internet at some point in the process.
● Mobile devices accounted for 19% of the overall traffic related to commercial real estate.
● Nearly 2/3 of Americans own a smartphone.
● According to the latest Pew Internet Report, 44% of Americans have used their phone to “look up real estate listings or other information about a place to live.”
Pets are the Norm
Results of an Apartments.com survey published in the LA Times last year tell us that over 70% of renters have pets. Nine out of ten pet owners reported that a building’s pet policies played a major role in their decision-making process. This segment of the market is already being wooed by new apartment developments designed to be pet-friendly, with features like bark parks and on site grooming.
Rent Makes up a Large Slice of the Household Pie
For residential property, traditional wisdom says that you should pay no more than 30% of your income on housing. This is actually an arbitrary figure chosen by the government to serve as the cap for what residents of public housing would be required to pay. These days, millions of Americans pay well above 30% of their income on housing costs –including rent as well as other related expenses.
While average rents have increased nearly 5% since 2000, incomes have dropped among renters by 13%. Now more than 35% of renters spend more than the recommended 30% of income on rent, and an astonishing one-fifth of households spend more than 50%.
On the commercial side, the percentage of income given over as rent is much lower. This varies greatly depending on the nature of the business, but can range from less than 1% to around 13%, with 7% considered fairly standard for so-called percentage rent.
Knowing our tenants can inform our planning with regard to customer service and technology adoption. The priorities of this large segment of the population are the business of both commercial and residential brokers intending to get the lease signed and keep the tenant happy.