Renting is the new black, but…
Although much of the stigma surrounding renting a home, apartment, or condo has diminished, and the Millennial generation is accustomed to and fully accepting of the concept of renting, two new studies reveal that the American dream of homeownership still alive and well, and that landlords are often “accidental” landlords.
Living the American Dream involves homeownership, says study
According to a new study1 released by TD Bank, 84 percent of today’s younger renting generation (ages 18-34) intend to buy a home in the future, and over half say homeownership is a vital part of the American dream and associate feelings of pride and excitement surrounding their first purchase. First-time homebuyers are more likely to cite achieving the American dream as a primary motivation for buying their first home, implying the dream is alive and well.
“There’s no denying buying a home is a pivotal point in a person’s life. Our survey tells us that people are looking to buy homes, and attitudes towards homeownership have continued to remain positive over the years,” said Michael Copley, executive vice president of retail lending, TD Bank.
The study did not reveal when the younger generation intends to purchase, but it is highly likely that the pressure is not as great as previous generations, and the wait may be longer than in the past.
Accidental landlords, the state of landlording
Many of the younger generation who have already purchased have become “accidental” landlords like many Americans of all ages, with 59 percent of landlords citing they qualify as “accidental” landlords, according to a LeaseRunner.com’s just released Rental Industry Report2 which studies the rental market from the viewpoint of brokers, landlords, and property managers.
The company says the most recent report “highlights the diverse challenges landlords face when managing rental properties, touching on finding the right tenant, lease execution, tenant screening, rent collection and tenant eviction,” noting that two in three landlords have had to evict tenants, with half citing late rent as the primary reason.
Respondents identified finding the right tenant as the toughest challenge, with cash flow weighing in as the least challenging – likely due to the high demand for rentals and therefore landlords’ ability to charge higher rent.
When asked which transaction during the leasing process consumes the most time, 65 percent of respondents reported listing and showing property as their most time consuming obligation, followed by lease execution. Of landlords who have taken the lease process online (paperless), 73 percent say it has strengthened their relationship with their tenant.
“With the surge of renters entering the market, landlords and rental industry professionals, not all of whom have experience managing property, are pressed to deal with more rental applicants, screenings, lease executions, and payments,” said LeaseRunner CEO Joe Buczkowski. “High rents and low vacancy rates do present difficulties for renters looking for a place to live, but we should be equally concerned about the challenges faced by landlords, brokers, and property managers – many of whom are also the consumer who has been forced into managing property by circumstance rather than choice.”