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You’ve got the property, it’s fixed up and ready for tenants to move in. By now, you should have an idea of who you want to rent and therefore market the rental property to—but if you’re just starting in real estate investing or as a landlord, this can be somewhat overwhelming to narrow down. Deciding which age demographic is best suited to your rental is a combination of location, amenities and who you’re most comfortable renting to.
Note that Canada’s federal Fair Housing Act makes it illegal to discriminate against potential tenants based on sex, race, national origin, disability or familial status—but you are allowed to picture an “ideal tenant” who, in a general sense such as age demographic and lifestyle, would be most likely to want to live on your property. Then you can tailor your marketing
But first, while you cannot deny a tenant based on age demographic alone, it can impact you ability to cover the mortgage on the property. Typically, older age demographics makes more money, and thus if you have a higher mortgage payment you will want to shy away from younger age demographics on average because they may not afford your rent.
So, to assess how age demographic may impact your cash flow, click the link below for a free strategy call.
Consider which age demographic your property is suited to
First, think about where your property is located. Naturally, urban neighbourhoods tend to attract younger professional renters; if you’re close to a university, you’re bound to attract applications from students. Neighbourhoods that have plenty of senior amenities like a robust recreation center, library and other attractions will be appealing to the 60+ crowd.
Consider, too, who already lives in your neighbourhood: what kind of households are moving in and out of the area? Are you seeing a sudden influx of young families move in while elderly neighbours start downsizing and moving out? What do you think attracts them to the area?
After you think about your neighbourhood and ideal age demographic, you can target your marketing to make sure people like your “ideal tenant” see your rental. For example, if you’re renting a single-family home in a quiet neighbourhood near a great elementary school, your ideal tenants are probably in their late 20s to 40s, who prioritize amenities like a good school district, safe streets and being the driving distance to grocery stores, restaurants and parks. This will shape how and where you advertise your rental.
Here are some pros and cons of renting to generational age groups—who they are, why they rent and what they’re looking for.
Discover How To Rent A Property With This Step By Step Guide
Gen Z, Millennials and Gen-Xers
On the younger end of the spectrum, this group ranges from the college-age crowd to adults in their mid-40s to late 50s—but one thing that unites them is that they’re not only familiar with technology, but will almost exclusively use it to find their apartments.
Gen Z
Gen Z renters are in their early to mid-20s right now, making them college-age or recent graduates. Gen Z makes up about 20% of Canada’s population. You can expect that they’ll be less experienced with renting property and at the beginning of their careers, but don’t count them out as viable tenants. Gen Z renters are 60 percent likely to rent and look for their rentals online. They’re also much more likely to be frugal and seek stability in their housing, thanks to the Great Recession; if your property is in an appealing location for young people, you’re likely to find a tenant who wants to stay in the property for years to come.
They also tend to prefer opportunities for human interaction, so lively communities and apartment buildings are ideal. Gen Z renters are often on the go to school and work, so living near transit hubs is a plus. Finally, they’re passionate about environmentally-conscious amenities and features, so if you want to rent to the Gen Z age demographic, play up these features.
Millennials
Millennials are currently in their late 20s to early 40s and make up 51 percent of the Canadian population—the largest generation in recent history. As Gen Z, they are fluent in technology and use it to find rental properties, but are old enough to remember days before the internet. Unlike Gen Z, Millennials are more likely to move to new locations for the right job or other prospects, thanks to starting their careers during or just after the Great Recession.
Millennials continue to rent throughout their 30s and early 40s, whether because housing is unaffordable thanks to burdensome student loans, or because they need the flexibility. Affordability is their top concern (they spend 45 percent of their income on rent), with convenience ranking just below. If you’d prefer tenants to stay a shorter time, target millennials.
Gen X
Gen Xers came of age in the 1980s and early 90s, and are also avid technology users. They tend to be more affluent and more likely to have incomes of $100,000 per year, or higher. For this reason, they’re less likely to need to rent; many of them were able to become homeowners before the housing crisis hit North America. Gen Xers are more likely to rent single-family detached homes.
Boomers and older generations
Boomers (and occasionally, folks from older generations) are also renting more frequently in Canada these days. As older generations downsize from their single-family homes after the kids move out, they tend to buy or rent apartments, condos or townhouses.
Typically, Boomers want great properties that don’t require a lot of maintenance, preferably within walking distance of cafes, shopping, grocery stores, public transit and other amenities—but about two-thirds of them are willing to live in quieter suburbs, away from large cities. Like Gen X, they’re more likely to opt for a luxury rental, given their more stable financial situation.
If you’re looking to attract a Boomer renter, emphasize the luxury of not having to care for the property (as they would if they still owned a single-family residence), as well as the convenience of nearby attractions and amenities. They tend to enjoy being near travel hubs or highways, making it convenient to visit family and friends in other locations.
Remember: Age Demographic Plays a Major Role
Once you identify who your property is most likely to appeal to, targeting the kind of tenant you’d like to attract, whether they crave luxury, affordability or convenience, is a snap.
So, while you cannot deny a tenant based on age demographic alone, it can impact you ability to cover the mortgage on the property. Typically, older age demographics makes more money, and thus if you have a higher mortgage payment you will want to shy away from younger age demographics on average because they may not afford your rent.
So, to assess how age demographic may impact your cash flow, click the link below for a free strategy call.