For the past five years, Rent.com has surveyed apartment property managers nationwide to give renters insight on current rental trends. In the 2013 survey, property managers provided insight on the current and predicted demand for rentals, expected rent increases, how to retain residents, and the changing demographic profile of American renters. Here’s what we found:
Renting Still Trending
For months, we’ve been reporting that renting has become more appealing than owning–and our survey results confirm that the rental market is hot. Compared to a year ago, 82% of property managers tell us that it takes the same amount of time (52%) or less time (30%) to convert a prospect who visits a rental property to a new resident. Additionally, 44% say there are more applications received per rental property on the market.
Seventy three percent (73%) of the property managers surveyed said it takes just one week or less to convert a prospect who visits a property into a new resident. The majority of those, 47%, said it actually only takes a few days. With the rental market still tight, renters should be prepared to apply and sign on the spot if they really like an apartment.
The U.S. rental vacancy rate, 4.3% according to Reis, while historically low, was unchanged in Q2 2013. This marks the first slowing in the dramatic rate of vacancy declines witnessed the last few years. With new apartment construction beginning to come online, this could mean rental rate relief on the horizon for renters in the tightest of markets next year. But, let’s see what our property managers predict:
Rents Going Higher, Inflation in Tow
The majority of property managers, 60%, predict that rents will rise over the next 12 months and just 2% expect rents will fall; the remaining 38% think rents will be flat. Those who predict an increase foresee, on average, a five percent (5%) change over the next 12 months. The increase in housing prices is one of the key factors driving the 1.5% increase in the inflation rate as reported by the Bureau of Labor Statistics in September 2013.
Cash is King
Rent.com asked property managers to rank resident retention tactics from most to least important and it’s no secret that money talks. The top three most important tactics are:
1) Keeping rental rates competitive (flat/smaller) was ranked first by the clear majority of managers.
2) Maintaining the property exterior and grounds came in a definite second for the majority.
3) Offering in-unit upgrades/remodels was not far behind in third.
Renters Are Younger and Richer
According to 75% of property managers, prospects applying for apartments are younger or the same age as compared to a year ago. At the same time, the average income of prospects is generally either higher (42%) or the same compared to a year ago. The majority of property managers seeing demographic shifts in family status among their prospect base (30%) reported that more singles are renting their own places compared to a year ago. These are hopeful signs that the downward trend in unemployment, albeit slow, is driving more financial freedom.
The survey was conducted among Rent.com’s property customers representing approximately 15,000 rental communities and 1 million rental units.