Study: Do Landlords Actually Know What Renters Want?

Do landlords really know what their tenants want? And are tenants willing to pay more to get specific features in a rental property? The Motley Fool surveyed 1,500 renters and 136 landlords to find out.

Some of the features landlords typically think add the most value aren't as much of a priority for tenants as you might expect. On the other hand, certain features, some of which don't cost much at all, could increase the income-producing potential of an investment property.

Here's a rundown of what we found out -- if you're a landlord, you might be surprised.

Key findings

76% of renters think that landlords know what renters want in a rental property "pretty" or "very" well.
86% of landlords think they know what renters want in a rental property at least pretty well.
For the most part, landlords know what renters are willing to pay more for in a rental property.
Renters were willing to pay more than landlords thought they would for three things: convenient payment options, guest parking, and flexible lease terms.
Renters weren't willing to pay as much as landlords thought they would for two things: pet-friendliness and high-quality nearby schools.
Almost half of renters say that getting the specific features they want is more important than affordability.
Only 18% of landlords thought that features trumped affordability in a rental property.

Do landlords understand what renters want in a rental property?

First, we asked renters how well they think landlords understand what they want in a rental property. We also asked landlords how well they thought they understand what renters want.

Here's what they said:

Loading paragraph...

Level of understanding	Renters: how well do you think landlords understand what you want in a rental property?	Landlords: how well do you think you understand what renters want in a rental property?
Not well at all	2.47%	1.49%
Not very well	21.47%	12.69%
Pretty well	51.20%	64.18%
Very well	24.87%	21.64%

Loading table...

More than three-fourths of renters say their landlords understand their desires at least pretty well, and about 86% of landlords say they understand their renters.

While that's pretty good, it's clear that landlords think they know more than they actually do about what renters want.

Where landlords got it wrong

Let's dig into some specifics. We asked renters and landlords about 16 specific features that might increase the value of a rental property.

There were five areas where landlords might not know their renters as well as they think:

Renters want convenient payment options

This was the biggest discrepancy in the survey. Less than one-fourth of landlords think their renters would pay more to have convenient rent payment options, but more than half of renters say they would do so.

Loading paragraph...

Loading infogram...

Renters want guest parking

Landlords dramatically underestimated how much renters want places for their guests to park. 48% of renters said they'd probably or definitely pay more for this. However, only 25% of landlords thought renters would pay more.

Loading paragraph...

Loading infogram...

Renters want flexible lease terms

37% of landlords say that renters would probably or definitely pay more for flexible lease terms, such as easy lease termination policies or lease lengths other than the standard one-year term. However, 65% of renters say they would probably or definitely pay more -- flexible lease terms could be more valuable than landlords think.

Loading paragraph...

Loading infogram...

Landlords overestimate what renters will pay for pet-friendly rental properties

65% of renters said they would pay more for pet-friendliness in a rental property. But landlords overestimated how likely they were to get more money for a pet-friendly property; 82% thought renters would pay more.

Loading paragraph...

Loading infogram...

Landlords overestimate what renters will pay for high-quality nearby schools

This one surprised us at first. More than 72% of landlords said that tenants would probably or definitely pay more to be near high-quality schools, but just 55% of renters feel the same way.

One possible reason is that the renter population skews in favor of people without kids, meaning families are more likely to buy than rent.

Loading paragraph...

Loading infogram...

Where landlords got it right

In many areas, renters and landlords are on the same page. Here are the things we asked about where landlords and renters were largely in agreement:

Convenient location
Modern building
Nice neighborhood
Reserved parking or parking lot for residents
On-site pool and/or gym
Accessibility features (elevators, ramps, etc.)
Modern appliances
Large size (square footage of unit)
Central air conditioning
Utilities included
Safety and security features

There were some minor differences, but landlords generally knew how likely renters were to pay more for each of these features.

Affordability vs. specific features

Perhaps the biggest surprise of the study is how many renters are willing to pay more to get the features they want. We asked renters how they value features compared to affordable rent, and we asked landlords how they think renters feel about the topic.

Loading paragraph...

Loading infogram...

Just 18% of landlords think renters value specific features more than affordable rent, while nearly half of renters say that getting the features they want is a higher priority than paying less.

Key takeaways for landlords

If you're a landlord, it pays to know what renters want. Specifically, renters value convenience and flexibility and also want their homes to be easy for their guests to visit.

More renters are willing to pay up to get these things than you might think, and while guest parking might come with a significant price tag, adding convenience and flexibility come with minimal added costs to the landlord, so they may be worth considering when trying to add value to your rental portfolio.

Methodology

The Motley Fool distributed this survey via Pollfish to 1,500 American renters ages 18 and over on December 3, 2020. Data from 136 landlords was collected via SurveyMonkey between December 3 and December 9, 2020. The landlord survey was distributed via Paydirt, the Millionacres newsletter.

Renter respondents were 53% female and 47% male. Age breakdown was approximately 15% 18–24, 31% 25–34, 32% 35–44, 11% 45–54, and 11% over 54. Geographic breakdown was approximately 36% South, 23% Midwest, 19% Northeast, and 23% West, as delineated by Census Regions.

Landlord demographic data was not collected.

Some figures may not total to 100% due to rounding.

Loading paragraph...

About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

TMFMattFrankel

@MattFrankelCFP

The Motley Fool has a disclosure policy.

Study: Do Landlords Actually Know What Renters Want?

Landlords think they know what renters want, but are they overestimating?

Key findings

Do landlords understand what renters want in a rental property?

Where landlords got it wrong

Renters want convenient payment options

Renters want guest parking

Renters want flexible lease terms

Landlords overestimate what renters will pay for pet-friendly rental properties

Landlords overestimate what renters will pay for high-quality nearby schools

Where landlords got it right

Affordability vs. specific features

Key takeaways for landlords

Methodology

About the Author

Premium Investing Services

Key findings

Do landlords understand what renters want in a rental property?

Where landlords got it wrong

Renters want convenient payment options

Renters want guest parking

Renters want flexible lease terms

Landlords overestimate what renters will pay for pet-friendly rental properties

Landlords overestimate what renters will pay for high-quality nearby schools

Where landlords got it right

Affordability vs. specific features

Key takeaways for landlords

Methodology