Many people will ask, why would a future resident choose to rent an apartment over buying or renting a house. They believe that the average American wants his or her own home, plot of land and backyard. Especially if the rents are the same, people struggle to understand why apartment living would be the preferred lifestyle choice over the traditional house. Whereas in the near past, this general preference would be accurate, things are changing, and below highlights a few key reasons for those changes in preference.
People are adopting simpler lifestyles. Whereas in the past, the dream was to leave Mom’s house, get an apartment, work to someday get a great job and a house, now, they seek overall flexibility. The general trend among the younger generation is that they are seeking greater flexibility and mobility; they do not want to be tied down to a particular city or house and prefer to have the option to live where they want when they want.
Access to Amenities
In your typical entry-level single family home, it is unlikely that you will have access to a pool, fitness center, dog park, etcetera. In many apartments, these amenities are standard. Prospective tenants are opting out of the choice to have a private fence for access to amenities that support their lifestyle, give them freedom and great health benefits.
Choice of Location
In many hot areas, San Antonio, Austin, Orlando, Raleigh-Durham, for example, people want to live in the heart of the city, where the action is. Recognizing that many cannot afford the typical house in that area, they make the easy choice to rent a very nice apartment in the area. Their priority is location, not pride of ownership.
For many of us who own homes, it is hard to understand the logic of choosing to rent an apartment over buying or even renting a single-family house. However, when you stop and think about the value that residents receive – flexibility, amenities and location – for what they pay in rent, there is better understanding. For $1,200 in rent, they can have a luxury apartment that affords them the space, minimal upkeep and freedom to live their lives.
This nationwide trend of preference change presents opportunities for multi-family investors who can understand the shift and serve the demand by providing apartment style living in growing areas. There is a national shortage of supply and even more so where people are migrating. COVID has helped expedite this trend and we will see more migration into secondary and tertiary markets as well as demand for multi-family housing. What a great opportunity for those who are ready to be a part of this phenomenon.
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Rodney Robinson II