You choose your tenants when you choose your building. Most investors look for a property that some other real estate investor is selling just to reduce their workload. They figure that if it has been used by someone else as a rental property for years, it should also work for them.
However, the right investment property for someone else may not be the right property for you. Moreover, the best type of investment property 15 years ago is not likely to be the right property now or even 15 years from now.
Households are changing
The U.S. Census Bureau reports that American households are changing. The number of households that have a married couple with children has been decreasing steadily since 1960. As the number of households with married couples has declined, the percentage of unmarried couples with and without children has increased significantly.
Another key change that is important for real estate investors is the percentage of one-person households, which has gone from approximately 12 percent in 1960 to almost 30 percent in 2011. With many Americans living longer, more active, and busier lives, they are appreciating the convenience of living near shopping and healthcare without having to take care of property maintenance themselves.
It is important for real estate investors to understand their local market. Many people who rent are not doing it because of credit problems or other financial issues. Instead, many responsible people choose to rent a nice place to live rather than go deeply in debt on a home that will also take much of their free time to maintain. There is a need for well-maintained rental properties that suit all household types. These households include young people with no children, older Americans looking to downsize, and couples with and without children.
What all renters want
Regardless of their current household composition, there are certain things all renters tend to look for when choosing where they will live.
- Responsible management: The most common complaint from tenants is lack of responsiveness and basic respect from property managers.
- Security: There are no guarantees, but people prefer communities with adequate lighting, background checks of residents, and management that responds quickly to security concerns.
- Convenient location: Millennials and people over 65 are not big on driving. These demographics like having things within walking distance.
In addition to having as many of these features as possible, it is important to showcase that your property cares about all of your tenants. People want to feel welcomed and appreciated. It might be your property, but it is their home.
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