As a property owner and landlord, your investments (and possibly your livelihood) will depend entirely on your ability to attract tenants. Accordingly, you need to be familiar with tenant psychology if you’re going to make effective, profitable decisions.
In this guide, we’ll explore the biggest priorities for tenants – in other words, what do tenants look for when choosing a property?
Why Tenant Priorities Matter
First, why do tenant priorities matter? Reviewing these tenant priorities can help you in several ways, including:
· Property choice. Better understanding tenant priorities can help you choose better properties to invest in. You can purchase homes that have the ability to attract better tenants – and attract them faster.
· Marketing strategies. If you’re working with a property management company, you won’t have to worry about marketing; your partner can take care of everything on your behalf. But if you’re marketing your property solo, you’ll need to understand what tenants are looking for (and do your best to describe your property in line with these priorities).
· Ongoing communication. Tenant priorities can also help you become a better communicator. You’ll develop more empathy for the problems that affect tenants the most and be able to resolve those issues faster.
What Tenants Care About
These tend to be some of the most important priorities for tenants:
1. General location. Location is always the highest priority. Some tenants will exclusively consider one city or one neighborhood because they want to be close to work, close to friends or family members, or have access to specific businesses and amenities. This does present a small conundrum for investors, however; the most desirable locations in a given area also tend to be the most competitive, meaning it’s hard to find a solid property for a good price.
2. Rent price. If a tenant reviews your property and sees a price they can’t possibly afford, they’re instantly going to close the window and move onto something else. For most tenants, price is a variable that can’t be ignored. You’ll need to charge enough rent to cover your expenses and keep the property operating profitably, but it’s also important to remain in line with what similar properties in the area are charging. Aim to buy properties where you can offer competitive rent without jeopardizing your bottom line.
3. Schools. If a tenant has children or plans to have children in the near future, the quality of the local school district is also going to matter. You can review school districts online to find the best options in your given city, and prioritize buying property in that area. Of course, not all tenants will care about the quality of local schools, which is why location and rent price rank higher in this list.
4. Crime rates. Additionally, your tenants will want to live in a place with low crime rates – especially rates of violent crime. Proactively search for properties in places with low crime rates to maximize your appeal. If you hold property in an area with increasing crime rates, consider investing elsewhere or purchasing upgrades that improve security (such as better door locks, a lighting system, or security cameras).
5. Transportation access. Most people prefer to live in places with ample access to transportation options. For some people, that means living near a bus stop, a subway station, or another point of access for public transportation. For others, it means living near a place with ready access to a highway. You may also encounter tenants who want to live somewhere with walkable sidewalks and/or bike lanes, so they can travel easily as a pedestrian.
6. Parking. Depending on where your property is, most of your tenants will probably have a car (or at least a bike). Accordingly, they’ll want a place to park. This isn’t always possible, but you may be able to widen the driveway, add a garage, or pay for additional parking spaces that make the property more attractive to tenants.
7. Appliances. Though somewhat superficial, most tenants like the idea of having new appliances in their unit. Buying a new refrigerator, stove, and/or dishwasher can instantly make the kitchen seem warmer and more inviting – and will be more appealing to a broad range of people.
8. Fixtures and extras. Finally, tenants will prioritize properties that have beautiful fixtures, solid aesthetics, and other extras. Was the bathroom recently renovated? Is the lighting impressive? Is there a balcony where the tenant can entertain guests?
Obviously, there’s a lot of room for variability here. What matters to one tenant may not matter to another, and priorities may shift based on demographics, location, and other factors. Make sure you do your demographic research and work to better understand tenant dynamics in your area so you can manage your property portfolio even better.