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