Multifamily|Thought Leadership|Trends|

Multifamily owners and operators are feeling competitive pressure from single-family rentals to upgrade amenity packages.

 What happens when more than half of customers would rather be somewhere else? It doesn’t take John Maynard Keynes to figure out that adjustments will need to be made. There’s a new kid in town, so to speak, with single-family rentals (SFR) and multifamily, the former belle of the real estate ball, will have to up its amenity game in response.

While most U.S. renters live in high-density apartments, 51 percent would actually prefer to live in a single-family rental home, Multifamily Dive reported, citing Bethesda, Md.-based real estate consultant RCLCO’s 2023 National Renter Consumer Preferences Report. Furthermore, an additional 21% of respondents said they prefer a townhouse or duplex.

Now we understand that bigger is generally better regarding living space and household sizes only increase, but there’s more to the current SFR hot streak. Take Millennials, the largest generation in the U.S., for a big example: they are in their prime single-family occupancy years and can reap the advantages of renting, including no down payment or maintenance responsibilities, as well as an easier exit strategy when deciding to move.

Economically, the U.S. housing shortage continues to shut many out of the for-sale market. And the COVID-19 exodus away from high-density apartment living to more spacious residences in the suburbs served as a blueprint for this single-family shift.

That’s why it’s never been more important for multifamily owners and operators to stay on top of evolving renter preferences. When it comes to amenities, it’s not how many a community offers, but “whether or not they meet the needs of renters in a way that makes sound financial sense to the owner,” writes Multifamily Loans’ Jeff Hamann.

ML published its top 5 amenities to add to a multifamily property: package lockers, smart home features, green transportation initiatives, pet accommodations and the right outdoor space based on renter demographics. RCLCO’s survey found that new kitchen appliances, walk-in closets and oversized kitchen pantries accounted for the most popular unit features, while security-related items were the top building amenities: a front desk attendant or gated community and a secure package receiving system. 

Amenity preferences tended to differ widely by age group — including commute distance and children’s play areas — but more than 80% of all renters view green features as important, with over half willing to pay more for them, Multifamily Dive reported. Walkability to surrounding retail, restaurants and open areas gained consensus as well. Pools, fitness centers and other leisure amenities not surprisingly remain popular, according to the study.

How will multifamily owners further differentiate their product? Build-to-rent units making up 6.9% of the nation’s 2022 single-family starts is a trend that should continue, if not expand, asserts an RCLCO principal. And on the buy side, about one-quarter of homes in Jacksonville (27%) and Atlanta (25%) to nearly one-third in Miami (31%) were purchased by investors in fourth quarter 2022, according to data from Redfin.

“When both economic expansion and disturbance work to a real estate sector’s advantage like that of the single-family rental housing market, it puts pressure on multifamily, which has plenty of competition in and amongst itself,” said Michael Rivera, infinitee’s creative director. “Change can be daunting, but the apartment sector still has really solid fundamentals. View it as new, exciting opportunity and take it on with a marketing partner that combines a ‘limitless possibilities’ mentality and a commitment to high-impact strategies and innovative tactics.


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