When purchasing property, it’s important to consider who will be living there. Whether it’s the tenants inside the units, or the neighbourhood surrounding. What is also important to remember, is that these people may not be there forever. Something to keep in mind that is proving to be useful to property managers is to give careful thought into the tenants that can be expected in the years to come.
Tenants have been said to be the cornerstone of a well-performing property. However, “make the wrong call and your property will not only sap your time but negatively impact your ROI” says Brandon Sage of LandLord Property & Rental Management Inc.. He adds, “get it right and you’ll be free to use your time elsewhere and benefit from a higher rate of return.”
(Apologies for being ultra-Canadian) Wayne Gretzky once said “I skate to where the puck is going to be, not where it has been.” and this couldn’t be more true when it comes to buying property. Investors would do well to do their homework to be sure they get the bets value appreciate over time, so that the tenants they rely on for income are desirable.
To quote the Great One, Wayne Gretzky once stated: “I skate to where the puck is going to be, not where it has been.”
Investors do well to do the same when they buy to ensure not just that they get the best value appreciation over time, says Sage, but so that the tenants they rely on for income are desirable. For investors to determine where to buy, they really need to have a firm understanding of where good tenants are locating. Every investor has been advised to buy where Starbucks goes, but following the influx of tenants which contributed to the area supporting a coffee shop in the first place is a way of getting ahead of the puck.
By the time a Starbucks (for example) is built, the property value has gone up and you will be spending more to buy. However, by watching trends and staying current with who’s who and what’s what in new and upcoming neighbourhoods, you can stay ahead of the trends.
Ultimately the rental units being offered are products, and as with any product there has to be a solid understanding of customer preferences and the trends.
Some of the trends to keep in mind for potential property buyers:
- Income levels are changing
- Vehicle ownership is decreasing
- Public transit and car sharing is increasing
- Job stability is decreasing
- Career mobility demands are increasing
- Communication methods are changing
- Market awareness and choice is increasing
- Customer service expectations are increasing
- Living space expectations are decreasing
- Family structures are shifting
The changes mentioned above are tied to wide societal changes currently underway. They’re impacting how we live, work and play and no question this will have an impact on where we invest.
Happy tenants are tenants who stay longer, which is ultimately the goal for property managers. A big way that tenants have been showing longer lasting stays in units is the ability to take transit to work. Tenants who don’t have to worry about traffic, and who can arrive at work fresh for the day get home to loved ones in good time, and thus good spirits. This makes for happy tenants and longer stays.
When it comes to trends, knowing where things are headed requires a firm understanding of where they have been. Property Managers are on the front line of these changes, and so well-positioned to provide advice to investors that need to know the bigger picture.
Are you a property manager? Sign up now to start accepting online rent payments for free: rentmoola.com/managers