Blog highlights:
- Families prefer single-family rentals over home purchases due to mortgage restrictions, school opportunities, and convenience.
- Single-family renters crave a different experience than multi-family renters.
- SFR renters appreciate the use of technology to improve the experience.
“Renting is the gateway to homeownership,” said Kori Covrigaru, CEO of PlanOmatic. “Home is home whether you rent it or buy it.”
But, a rental home feels more like home when it’s a single-family rental (SFR), which is the direction renters are going. There has been a steady increase in demand for SFRs, and it is all about the experience.
Why are single-family rentals growing in popularity?
The American dream has evolved, and it didn’t happen overnight. It started in 2008. Sub-prime mortgages allowed buyers to get approved for homes they couldn’t afford. This led to foreclosures, followed by more restrictions on loan approvals. Now, it’s more difficult to become a homeowner, shifting the American dream to something more attainable.
Loan approvals (or lack thereof) aren’t the only reason SFRs are growing in popularity. More people are working from home, so proximity to work doesn’t matter like it used to. If you want to live in rural Virginia but work at a Silicon Valley tech startup, you can.
Along the same lines, families can “rent up.” This means they can rent a home in a better area than they could afford to purchase. Renting opens a world of possibilities, allowing families to move close to amenities they enjoy and schools their children will thrive in without having a 20% deposit in the bank. There is a much lower barrier to entry when moving into a rental.
Not every adult wants to have the responsibility of taking care of a home, so homeownership is not appealing to everyone. With the surge in premium rentals, families can live in a beautiful, spacious home in a great school district without worrying about maintaining it. The option to submit a ticket when a pipe leaks or the HVAC needs a tune-up is a huge plus for many busy professionals.
What experience do SFR renters expect?
SFR renters and multi-family renters have different expectations.
Multi-family renters are in a different phase of life than SFR renters, so they have different goals. Often, they are more transient, so short leases and convenience are a top priority. If life changes, they want to be able to move to accommodate their new life. SFR renters stay in their rental for 5-6 years, on average, while multi-family renters stay an average of 2 years. Because SFR renters live in their rental for longer periods, they will want an experience that makes them feel at home.
Convenience
SFR renters want the ease of online walk-throughs, applications, leases, payments, and maintenance tickets. Add technology that makes it easy for renters to find your property and stay in it. Many online SaaS options will streamline marketing, onboarding, tenant communication, and frictionless rent payments and maintenance tickets. No tenant wants to drop a check off at their landlord’s house or call them when the overhead light starts flickering. Make it convenient and add tools to streamline these processes for tenants.
Schools
SFR renters are often families. So, invest in properties within good school districts. Families will choose to rent in a school district that meets their specific needs, whether it be more extracurricular activities, special needs accommodations, or small classroom sizes.
Smart Home Technology
Adding smart home features to your rental benefits both you and your renter. Think of the convenience of turning off the lights, lowering the AC, and running the dishwasher from your smartphone. Tenants love smart home options in their rentals. Property owners’ added benefits are reduced energy bills, more oversight, and less friction. If you have a smart lock on the door, there are no more calls to the maintenance staff about lockouts!
SFR vs multi-family rentals
Historically, multi-family rentals had an easier time creating a better experience through technology and process optimization. But, technology has evolved enough that SFRs can now provide the same streamlined experience, with the added benefit of more space, independence, and privacy.
“Technology allows us to create a better product and a great, low-effort experience for the resident. What excites me about SFR is the capital coming into the space. It’s new, exciting, and full of potential. But, it’s been around long enough that it’s a proven model,” Covigaru said.
How to improve your SFR experience with PlanOmatic
“We saw a tremendous opportunity to help pioneer an industry on the verge of exponential growth. At PlanOmatic, in our heart, we’re innovators, we’re agile, and when we sense opportunity, we go all in. If we were to help pioneer the wave of single-family rentals, it was important for us to focus solely on them,” said Covrigaru.
PlanOmatic is singularly focused on driving the growth of single-family rentals through improved optimization. From renovations to marketing to improving your SFR processes, PlanOmatic supports you with photography, virtual walkthroughs, floor plans, and PlanOlabs process consulting.