Features Of Successful Renting Communities
The biggest question when it comes to finding a successful rental community is: who. Who is renting? Location is definitely important, but one of the biggest indicators of a successful rental community is going to be the rental demographic. In certain sleepy small-town communities throughout the Midwest, the rental community may be older.
In college towns, you’re almost certainly going to find a rental community that is young and in some ways transient. They may live locally for four years before moving to a place where they feel their occupation may be better pursued.
Some towns have a migratory workforce, like North Dakota. In this region roughnecks working oil rigs come for a time and then go. Often they’ll live in motorhomes or trailers, but you’ll find there are many who prefer rental solutions as well.
What Do All Renters Have In Common?
Most renters are going to want nearby amenities. They’re going to want restaurants, entertainment, shopping, recreation—the works. One thing that often makes a community popular in terms of rentals is a “happening” nightlife. But again, that depends on your demographic. This isn’t true for older communities.
Still, something to consider across the board right now is that the millennial generation is increasingly representing a statistical majority of renters in most municipalities. That trend should continue for ten to twenty years, after which the majority will most likely be composed of the post-millennial generation.
Millennials love to party, they love to socialize, they are often group-minded, and they like to be where the action is. Not all of them, of course; but a large enough statistical set to be significant. If you’re looking at installing an apartment complex, or leasing some other property, you want it to be near a thriving community; but you also want it to be near a community that is on an upward climb.
Time moves quickly, and one area of town may be thriving for several years, then wane, while another becomes vibrant. Look at city planning. Look at developments. You might stop by the chamber of commerce or the city council to see what sort of commercial projects will characterize development in the next several years.
Watch Out For Subleasing
Something else to consider, if you’re dealing with a large millennial population, would be the tendency to sublet via mobile app. This has become a trend today; many millennials “couch surf”, and that trend transitioned into Airbnb, which is an internet listing site where someone can put up a room and charge someone to stay there for a night.
When it comes subletting, you want to ensure your property isn’t being taken advantage of. To that end, SubletAlert.com monitors online sites where those who are already renting commonly rent; according to the site: “If we find one of your units listed on Airbnb, we send you an email alert within 24 hours of the listing going live.”
But regardless of subletting, your most important choice in acquiring property you can lease out should be perpetually filled rooms. If you buy a building that’s never fully rented out, it may take longer to get your investment back. In fact, you may never get it back, and it could be time to sell.
Selling Property As Necessary
Repairs, landscaping, upgrades, and a spot of paint here and there are wise pursuits.
Selling a property used primarily for rental can be a challenge. If you haven’t landscaped your property as much as you could, here are some ideas to help get your imagination going.
Increasing property value is usually a worthwhile pursuit. Whenever you can do something to make what you own worth more, it can give you valuable capital for necessary property purchases later on.
When you’re finally in a position to acquire property, look at the kind of renters you’re likely to deal with, the location of the property, and what particular trends are characterizing changes in your local community.
If you live in a college town, for example, you’re likely going to find there is a perpetually vibrant section of town replete with continuous nightlife. This is the case in Iowa City, IA, Fort Collins, CO, Brookings, SD, Missoula, MT, and countless other cities.
Every four years a group of students cycles through campus. Most go, some stay, and new ones always come. Provided the collegiate institution is doing well, those students will usually look for apartments around town in statistically predictable numbers. If things are going well, you should see those numbers steadily climbing.
Fort Collins, Colorado has seen some exceptional growth in this area. Colorado State University is centered in this town, and apartment complexes are going up like man-made ears of corn you can rent. New complexes are studding a section of the community called “old town”, which has long been known for its vibrancy.
Identifying Growth Areas
But there is another community in this town which those leasing apartments would do well to consider. It exists on the west side of town, just across from the college. Bars, restaurants, fast food joints and liquor stores have been being built regularly for years on this street, West Elizabeth. One of the reasons for such growth in this part of Fort Collins has to do with increasing collegiate attendance. City planners had to meet the need.
So take that information and look at your town, see where areas are developing. Look at that community which is most developed, and remember where it was before the changes came. Then find another part of town where the same is set to happen soon. If you get in at the right time, your property could be very lucrative. You must be up on the local trends, though. Talk with people. See how the housing market has been doing.
It’s not always predictable which area of a given community will suddenly take off economically, but there are usually signs: increased dining, shopping, and traffic, new buildings being regularly built, and upward population thrust.