Single-family home tenants are 18 per cent more likely than apartment tenants to stay in their current homes five years or longer, according to a new national opinion survey released by Premier Property Management Group out of Memphis, Tenn. This suggests demand for single-family homes, the fastest growing rental category, will be more stable than multi-family demand.
The study indicates that one of every four (26 per cent) single-family tenants plans to stay in place five years or more, compared to one out of five apartment dwellers (22 per cent).
One factor contributing to single-family stability could be high marks renters give the quality of single-family property management. Approximately 80 per cent of tenants in single-family rentals said their property management was good or excellent compared to only 63 per cent of apartment renters. One out of four apartment dwellers (26 per cent) rated their management as only adequate.
“With the emergence of the single-family rental option, American families have a new housing choice that brings them the aspects associated with owning their own homes important to families such as living space, privacy, safe neighborhoods and the sense of community, without the cost and risks of homeownership,” says Chris Clothier, director of sales and marketing, and partner of Premier Property Management. “Single-family rentals can be found in virtually every community today, and more and more families are choosing single-family rentals either as a temporary stop on the road to becoming homeowners or as a permanent solution to their housing needs.”
More than half of renters (52 per cent), including 60 per cent of single-family renters and 44 per cent of apartment dwellers, said they anticipate becoming homeowners in the next five years. Families with three or more members (64 per cent) and children under 13 (69 per cent) were more likely to become homeowners than the 43 per cent who don’t plan to become owners.
Clothier says near term interest in becoming homeowners among single-family tenants reflects the new roles single-family rentals are fulfilling as a stepping stone to homeownership for first-time buyers and as a sanctuary for large numbers of families displaced by foreclosures but who plan to buy again when they can afford to do so.
Despite reports that difficulties getting financing are keeping many U.S. renters from becoming homeowners, the survey found the inability to get a mortgage ranks only third among the reasons renters don’t plan to become homeowners. Among those who do not anticipate becoming homeowners (43 per cent of all renters), 29 per cent say they can’t get a mortgage. More renters report they don’t want to buy a home because they enjoy being renters (40 per cent) or they simply don’t want to be homeowners (39 per cent).
Short-term turnover rates for both multi-family and single-family rentals over the next two years are 56 per cent for multi-family, and 59 per cent for single-family rentals. Apartments typically experience an annual 50 to 60 per cent tenant turnover.
The survey also found:
- Single-family renters make more money and are nearly twice as likely to have children as apartment dwellers. Median income for a single-family renter is between $75,000 and $100,000 annually (66 per cent) versus $50,000 to $75,000 annually (51 per cent) for a multi-family tenant. Single-family households are larger; some 65 per cent have three or more members compared to 32 per cent of apartment households. Approximately 63 per cent of single-family households include children; only 34 per cent of apartment renters have children living with them.
- Most single-family tenants are older, aged 35 to 44 (53 per cent) compared to 14 to 34 (46 per cent) and 65+ (61 per cent) for apartment dwellers.
- Compared to apartment dwellers, single-family renters value neighborhood features important to children such as parks and playgrounds (65 to 71 per cent), good schools (72 to 82 per cent) and safe neighborhoods (97 to 98 per cent).
