What First-Time Renters Want Most - RangeWater Featured in the May Issue of NAA UNITS Magazine

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NAA Units Feature 5 2024

By Barbara Ballinger | Contributor, NAA Units

Whether it’s their preference, or they graduated from college and now work, have left their parents’ homes after returning and saving funds or sold a home and want a change for less maintenance, today’s apartment renters come to the market with a variety of priorities.

Those who represent first-time renters are not a single, easy-to-define group. Many new to the process—or who may not have rented in decades—have different budgets, locations, square footage preferences and reasons to rent. Many younger renters have saved by living with their parents and working to afford their first apartment. It may lack bells and whistles associated with the amenity wars of recent years, but it’s their first home or castle and a huge achievement. “The joy of being able to come into a clean, quiet building with everything that I need has been the highlight of my year,” says London Purnell, who started renting a studio last fall at Chicago-based Habitat’s 43 Green apartment community. 

Others, typically older, have equity from the sale of a house and seek to replicate the space and extras they con-note with homeownership, except forgo maintenance. The varied range of wants makes it essential for developers and property managers to understand who resides at each property. 

At the top of wish lists, most renters put price/value, location and convenience, though a strong fourth contender is a sense of community due to the isolation many felt during the pandemic, says Louie Colella, Vice President of Leasing and Operations at St. Louis-based CRG, which operates 2,500 beds at its purpose-built student housing (PBSH) and 1,000 multifamily units in eight states. At the same time, many renters desire quality and privacy within their units, even when apartment square footage is shrinking nationwide, says Michael H. Zaransky, founder of Chicago-based MZ Capital Partners, which operates 2,500 units in three states. The average size of a new apartment shrank in 2022, according to RentCafe, decreasing from 941 square feet a decade ago to 887 square feet. Here’s more to consider. 

Affordability and perceived value

After rents skyrocketed during the pandemic, they stopped their big upward trajectory, though they are still 20% higher than at the start of the pandemic, according to Apartment List. 

Though it may represent a slight nuance, Marcie Williams, CEO of Charlotte-based RKW Residential, which has 35,000 units in nine states, says the majority of those looking at the company’s portfolio seek value more than price. “For example, they know there may be other places that rent for less than $3,500 a month but they don’t want to sacrifice amenities or space for quality,” she says. “Their perception of the value they get for their housing is the same that they seek in other facets of their life,” she says. 

Patrick Burke, Senior Managing Director of Property Management, Build-To-Rent for Atlanta-based RangeWater Real Estate, which has 15,000 units in 11 states, says its first-time residents expect to pay a higher price for the value of what they’re getting, from physical space to amenities, fixtures, hardware and convenience. In some markets where new building inventory has been delivered, competition among Class A buildings has heated up so much that companies have brought back concessions. An example is Myrtle Beach, S.C.-based Sands Companies, which currently gives one month free for its apartment “cottages” in Myrtle Beach. In more competitive Nashville, Tenn., concessions may be greater. 

Read the full article in NAA Units here.