Apt. Renters’ Renewal Intent Falls Below 60%

Results from latest Kingsley Associates’ Resident Survey 

Apartment resident renewal intent continued its downward slide during the fourth quarter of last year as the year ended with only 59.5% of renters indicating they “definitely” or “probably” would renew their lease. This figure, based on Kingsley Associates’ latest resident survey results, represents a new three-year low and is down from a high of 65% reported as of June 30, 2010.  What this means to you as a landlord is that your renters are becoming more choosey.  Providing rental space is a service industry and amenities count! With the recent economy being what it has many landlords have postponed tenant improvements.  Aging kitchens and baths and neglected landscaping will result in higher turnover.      

While renewal intent trended down in 2011, overall resident satisfaction remained stable. For the most recent four quarters, 76.2% of residents rated their overall satisfaction as “excellent” or “good,” compared to 76.3% for the prior period and 76.0% at the end of the second quarter of 2011. “In many ways, multifamily real estate has led the economic recovery,” said John Falco, principal of San Francisco-based Kingsley Associates. “As renters themselves recover, there are indications that more of them are renting by choice. They aren’t unhappy – just choosy.” Three observed trends support the hypothesis that more residents are choosing to rent in multifamily housing rather than enter (or re-enter) the ownership market, Falco said.

First as of the end of 2011, 45.9% of surveyed apartment residents indicated that they live alone, an increase of more than 2 percentage points from earlier in the year.

Second residents 55 and older now make up 13.4% of surveyed renters, compared to 12.6% for the period ending in Q2 of 2011.

And for the first time in recent memory, households with incomes of $75,000 or more now comprise a greater share of surveyed renters (32.0%) than those earning less than $40,000 (30.7%).

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