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8 Primary Factors That Make A Property Appealing To Tenants
You spent a bomb on a house in a prime location right on the outskirts of the city. You then threw in a big budget to do up the place so as to get a premium on rental. You even allow pets just so there is one less reason for tenants to shun you.
Yet the property is still vacant.
Not because of a lack of interest. But for a lack of prospects who see good value in what your house has to offer.
What is wrong here?
It is almost impossible to predict what a tenant is looking for in an apartment. In all likelihood, many don’t even have a good idea of what they want.
And what happens most often, is not about whether a property on the rental market meets all the criteria of what a tenant want. It’s more about the trade-offs he/she is willing to make.
- What are their priorities?
- What kind of balance in criteria can they achieve with their budgets?
- Emotional and family factors?
As you can see, you’ll need to be a soothsayer in order to determine exactly what a tenant is looking for.
But here are 8 key factors that are often the most important criteria that can swing a tenant’s decision.
This is the most obvious factor and few landlords will be oblivious to the importance of location.
In fact, it is a well-known fact that many people are willing to rent a place situated in a good location even if the house is in a run-down condition as if a warhead just hit it the week before.
Location is king when it comes to rental property acquisition.
A good location can offer proximity to amenities and even a prestigious address to boast about.
Saying that, please do give it serious thought if you are going to buy an apartment in very bad condition just because it is located in a good spot in the city. Buying a place that meets the single factor of “good location” is a move more associated with rookies even if that’s the most influential factor to tenants.
If you are a sharp landlord, the ideal size for a rental house will depend on the niche market that you have identified and targeted.
For example, expat professionals working in the city might have a preference for studio apartments.
Homes with 2 or 3 rooms seem to be the sweet spot acceptable to most types of tenants. Singles, couples, and small families often don’t mind the extra space as long as the price is reasonable. And bigger families are often receptive to the restricted living space just to save money.
Just be mindful that if you acquire a large house, your options are pretty limited to large families. This can mean a higher rental, but a smaller market to reach out to.
As mentioned in the previous point, BIG houses can be difficult to rent out.
The masses will not be able to afford it.
These homes often only cater to high-flying corporate professionals that are transferred to the location for a short period of time often between 6 to 36 months. And the rental is usually paid for by the company through accommodation benefits and claims.
Let’s put it this way. If they can afford to rent it, they can afford to buy it too. The reason they rent has nothing to do with limitation to their finances.
Unless you have a way to market to these specific clientele, it is best to stick to the masses.
This means smaller homes that is affordable to most working adults.
In this market segment, where most of your competitors are, you might face a lot of cut-throat price competition. If you can accept lower rentals to weed out the competition, by all means, go for it.
Be mindful though, that tenants who are price sensitive can be very meticulous at expenses. And a beast in getting their money’s worth.
The best way to stand out in this market is to offer more value.
Developed markets with educated consumers tend not to mind paying a premium for better value. They often make better tenants too with their reasonable expectations.
4) Good or bad neighborhood
A lot of people think it’s politically incorrect to mention this. But as an investor, you have to confront this reality head-on.
Some areas are known to be of higher crime rates and some of lower. And this can be a material factor to families with small kids.
If you do own a place in a bad neighborhood, at least take precautions that can add that little more security for the safety and peace of mind of you tenants.
5) Near good schools
Who doesn’t want the very best education for their children?
Not only is a house situated near a good school provide convenience travel and transit concerns, it also addresses safety fears. Being in the vicinity does not guarantee safety. But it sure eliminates a lot of the fears and provide peace of mind.
A shorter route to and from school means a lesser exposure to strangers should they travel alone. It also makes it more convenient to fetch them after classes.
Lower transport costs can also be attributed.
The condition of a house tend to be of particular concern with people who strive for financial success, but yet to attain it.
The average tenant will however be most concerned with practicality.
Saying this, it is your duty as a responsible landlord to provide a livable condition for your tenants to live in.
You don’t want the trouble of having to handle issues that arise from your negligence in maintaining a house’s living condition.
But if you are selling low rental, tenants are usually able to compromise on quality. And if you are charging top dollar, you can very well expect that your tenants expect a high quality of service from you.
The layout of a house can be an important aspect especially when the tenants are house mates sharing the place.
They would want their own privacy in their rooms. And don’t want to have to invade into someone else’s private space whenever they need to use the bathroom.
Some people also like bigger kitchens while others think the kitchen is a luxury they don’t need.
Some people also like their rooms to be of a squarish shape.
The point is that you should not assume.
8) The look
Although common sense tells us that tenants spend the majority of their time inside a house looking in rather than outside looking in, an aesthetically pleasing home design can be particularly appealing to certain people.
This is why certain buildings are built with grand architecture… to attract people willing to pay more for it’s look!
A building that uniquely stands out from a city of skyscrapers can be too tempting for some tenants to resist.
Remember that different tenants have different needs and wants. Sometimes, certain factors rank higher in their priority list, while other factors don’t even exist in their minds. And don’t be surprised to find tenants willing to take up the unit just based on 1 factor alone that your property has in abundance.