Who are the renters?

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There is a unique class of renter right now, a group of former homeowners who lost their homes to foreclosure or short sale during the past 4-5 years. These folks are the vast majority of my current renters but I am starting to lose them as they requalify for mortgages and resume their former lives as homeowners. When they call me and let me know they are buying I congratulate them and wish them well. Without question these are the best tenants I will ever have, they understand home ownership, they take care of the property very well, they are re building their credit so I almost never have a late rent payment from them. The vast majority of this renter class will eventually become homeowners again.

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http://www.nmhc.org/Content.cfm?ItemNumber=55508 Age Distribution Renter-Occupied Households (000s) Share Owner-Occupied Households (000s) Share Under 30 Years Old 10,314 72% 4,084 28% 30 to 44 Years Old 12,792 42% 17,483 58% 45 to 64 Years Old 11,116 25% 33,012 75% 65 Years and Older 4,538 18% 20,578 82% Total 38,762 34% 75,159 66% What Type of Structure Do Renter Households Live In? Structure Type Households (000s) Percent Residents (000s) Percent Single-Family 13,323 33% 39,181 40% 2 to 4 Units 7,621 19% 18,753 19% 5 or More Units 17,816 44% 36,562 37% Mobile Homes 1,309 3% 3,664 4% Other 166 0% 294 0% Total 40,235 100% 98,454 100% Large Cities: Population, Housing, and Renters City Names Population Total Occupied Housing Units Total Apartments Apartments Percent Of All Housing New York, NY 8,244,910 3,023,330 1,514,341 50% Los Angeles, CA 3,819,708 1,304,145 545,250 42% Chicago, IL 2,707,123 1,016,342 288,115 28% Houston, TX 2,145,933 774,630 292,875 38% Philadelphia, PA 1,536,471 576,429 89,510 16% Phoenix, AZ 1,469,484 519,369 109,413 21% San Antonio, TX 1,359,730 482,783 114,840 24% San Diego, CA 1,326,183 468,194 135,928 29% Dallas, TX 1,223,378 455,371 176,882 39% San Jose, CA 967,478 305,460 68,190 22% Jacksonville, FL 827,909 311,369 60,646 19% Indianapolis, IN 824,232 324,438 66,434 20% Austin, TX 820,601 331,582 125,401 38% San Francisco, CA 812,826 342,706 130,869 38% Columbus, OH 796,014 322,314 88,469 27% Fort Worth, TX 760,758 263,676 55,177 21% Charlotte, NC 751,074 292,715 69,808 24% Detroit, MI 706,640 253,629 37,409 15% El Paso, TX 665,577 219,568 37,451 17% Memphis, TN 652,078 245,836 53,958 22% Boston, MA 624,969 251,745 88,669 35% Seattle, WA 620,778 282,492 99,602 35% Denver, CO 619,968 266,624 86,859 33% Baltimore, MD 619,493 239,251 51,505 22% Washington, DC 617,996 268,670 111,192 41% Characteristics of Apartment Households and All U.S. Households in 2011 (in thousands) All Apartments New Apartments (Built 1990-2011) Total Households (Renters and Owners) Total Households 16,060,156 3,375,747 115,076,390 Age of Householder <30 30% 32% 12% 30-44 28% 31% 27% 45-64 26% 19% 39% 65+ 15% 18% 22% Median Age 39 37 50 Mean Age 43 43 51 Household Type Single Male 22% 20% 12% Single Female 25% 28% 15% Married Couple Only 9% 10% 21% Married Couple with Children 10% 10% 24% Single Parent 13% 13% 10% Other Households 21% 20% 18% Household Members 1 47% 48% 27% 2 27% 26% 33% 3 13% 13% 16% 4+ 13% 13% 24% Mean Number 2.0 2.0 2.5 Children (under age 18) Mean Number 0.4 0.4 0.6 % Households with One or More 24% 24% 30% Household Income Less than $20,000 41% 35% 22% $20,000 - $34,999 22% 19% 18% $35,000 - $49,999 14% 15% 14% $50,000 - $74,999 12% 15% 17% $75,000+ 12% 15% 30% Mean Income $37,095 $44,490 $64,728 Median Income $25,768 $31,982 $45,964 Household Income of Market Rate Renters Mean Income $41,938 $53,814 N/A Median Income $30,000 $38,978 N/A Hispanic Householders Hispanic 20% 13% 12% Non-Hispanic 80% 87% 88% Motor Vehicles Mean Number per Household 1.1 1.3 1.8 % Households with One or More 73% 85% 92% Notes: NMHC tabulations of 2011 American Housing Survey. "Market Rate" apartments are those privately owned units whose residents reported that no government subsidy is received. Updated 3/2013 Transportation- 2011 Main Transportation to Work All Apartment Renter Households Apartments Built 1990-2011 Single-Family Owners Total Households Car, truck, van, motorcycle or taxi 76% 84% 91% 87% Bus or streetcar 7% 4% 1% 2% Subway or rail 6% 3% 1% 2% Walking or bicycle 7% 5% 1% 3% Work at home 3% 3% 5% 5% Other 1% 1% 1% 1% Commute Time to Work Less than 30 minutes 38% 42% 37% 37% 30 to 59 minutes 16% 15% 17% 16% 60 minutes or more 46% 43% 47% 46% Source: NMHC tabulations of 2011 American Community Survey. Updated 3/2013. All Apartments New Apartments (Built 1990-2011) Total Households (Renters and Owners) Total Households 16,060,156 3,375,747 115,076,390 Age of Householder <30 30% 32% 12% 30-44 28% 31% 27% 45-64 26% 19% 39% 65+ 15% 18% 22% Median Age 39 37 50 Mean Age 43 43 51 Household Type Single Male 22% 20% 12% Single Female 25% 28% 15% Married Couple Only 9% 10% 21% Married Couple with Children 10% 10% 24% Single Parent 13% 13% 10% Other Households 21% 20% 18% Household Members 1 47% 48% 27% 2 27% 26% 33% 3 13% 13% 16% 4+ 13% 13% 24% Mean Number 2.0 2.0 2.5 Children (under age 18) Mean Number 0.4 0.4 0.6 % Households with One or More 24% 24% 30% Household Income Less than $20,000 41% 35% 22% $20,000 - $34,999 22% 19% 18% $35,000 - $49,999 14% 15% 14% $50,000 - $74,999 12% 15% 17% $75,000+ 12% 15% 30% Mean Income $37,095 $44,490 $64,728 Median Income $25,768 $31,982 $45,964 Household Income of Market Rate Renters Mean Income $41,938 $53,814 N/A Median Income $30,000 $38,978 N/A Hispanic Householders Hispanic 20% 13% 12% Non-Hispanic 80% 87% 88% Motor Vehicles Mean Number per Household 1.1 1.3 1.8 % Households with One or More 73% 85% 92% State Distribution of Apartment Residents, 2011 State Population in Occupied Housing Units Number of Apartment Residents Apartment Resident Share of State Population Alabama 4,686,906 334,475 7% Alaska 696,365 57,193 8% Arizona 6,338,579 691,856 11% Arkansas 2,859,046 188,149 7% California 36,871,518 6,150,090 17% Colorado 5,001,327 662,404 13% Connecticut 3,462,553 336,804 10% Delaware 882,722 76,609 9% District of Columbia 577,940 205,697 36% Florida 18,635,836 2,244,294 12% Georgia 9,558,759 1,038,655 11% Hawaii 1,331,912 172,345 13% Idaho 1,556,034 82,083 5% Illinois 12,567,547 1,351,267 11% Indiana 6,329,995 508,734 8% Iowa 2,964,197 248,562 8% Kansas 2,792,143 214,267 8% Kentucky 4,243,477 289,029 7% Louisiana 4,447,404 296,498 7% Maine 1,292,643 83,068 6% Maryland 5,689,902 784,170 14% Massachusetts 6,349,092 783,790 12% Michigan 9,647,118 807,868 8% Minnesota 5,209,467 565,924 11% Mississippi 2,886,549 170,016 6% Missouri 5,836,654 409,198 7% Montana 969,350 53,317 6% Nebraska 1,791,476 183,166 10% Nevada 2,687,168 406,926 15% New Hampshire 1,278,090 108,731 9% New Jersey 8,634,918 1,028,282 12% New Mexico 2,039,592 137,784 7% New York 18,879,525 4,440,718 24% North Carolina 9,399,136 807,206 9% North Dakota 658,876 86,745 13% Ohio 11,238,646 1,007,387 9% Oklahoma 3,681,563 272,708 7% Oregon 3,785,214 446,234 12% Pennsylvania 12,309,480 873,671 7% Rhode Island 1,008,639 97,672 10% South Carolina 4,540,063 349,646 8% South Dakota 790,031 75,133 10% Tennessee 6,249,881 519,917 8% Texas 25,093,488 3,413,361 14% Utah 2,771,069 234,713 8% Vermont 601,102 35,870 6% Virginia 7,856,815 919,861 12% Washington 6,684,920 825,501 12% West Virginia 1,805,982 87,939 5% Wisconsin 5,560,531 521,718 9% Wyoming 554,343 29,753 5% Source: American Community Survey, 2011 1-Year Estimates. Updated 3/2013.

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There are many, many areas of the US where it makes zero sense to own property. Property owners are better on appreciation while losing money each month on their rentals. Those tenants are having their lifestyle subsidized by the landlord. Renting gives a degree of flexibility that ownership does not. The exorbitant transaction costs of buying and selling real estate mean that you can end up stuck because you can't afford to sell. If jobs dry up and you could move to find a better job, but you can't afford to sell you're property, you can end up worse off than if you were renting. Can't afford to stay, can't afford to go. Home ownership includes MANY costs beyond the PITI payment. Renting include little beyond the rent. I've written many times, but will write here again that a house is nothing but an expensive doo-dad. If you can afford to own a property that meets your needs, great. If renting works better, that's fine, too. And, don't confuse "owning a home" with "renting the money to say you own a home". When you buy with a 30 year note, the interest, i..e, the "rent" on the money is huge. Its not horrible at today's rates. At 4% if you stay in the house for 30 years and pay off the note, you'll only pay 70% of the price of the house in interest. I remember when OO rates were double digits and 9% (what I paid for the first house I bought in 1987) was a good rate. Five years ago, 6% was a good rate. At 6%, you pay more in interest than the price of the house.

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True Steve Babiak And I've seen high-end deadbeats, not just the typical low-income/undesirable neighborhood ones that steal the copper plumbing. Screening criteria is so important because you can't always assume that the deadbeats are easy to spot.

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There are a bunch of renters who flat out are deadbeats; that means that the landlord has to do extensive screening to filter out the bad ones and choosing from those that are more worthy. Fortunately for me, I've remained very selective and I don't have any of those deadbeats living in my rentals - but they're out there, and they will remain renters because they eventually don't care to pay for things; as renters, they just find the next landlord that does not examine their background too closely.

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At the end the day if you look at your personal, single family, home it is a liability on paper. Houses always go up in value right? Ask a few people that bought under that impression in '05-'08 Renting makes sense for a lot of well off people that don't want any hassle and don't have to worry about the fridge, flood, furance, etc.

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People who are transient, People who can't save enough for a down payment People who don't want to be bothered with the responsibilities of ownership. People who simply can't handle home ownership Low incomes Those who see themselves as renters/ low self esteem I am sure there are lots more reasons but that is a start. - Ned

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Indeed. They make up a good percentage. I am dealing with one right now. It's not that they can't pay, it's just that they don't want to. I have to nicely remind them of the consequences of being a deadbeat, as some are so naive they think they can get away with it unscathed.

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It all boils down to the numbers. Its better to rent in high land value areas and buy in low ones. Lifestyle is also a consideration. If one relocates frequently due to work, why buy and be tied down to a death grip (english translation of mortgage). Just my 2 cents.

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Those numbers on Memphis are very wrong, we have much more than 22% renters, (or am I reading it wrong?) From the last Census: Houses: 271,723 (250,810 occupied: 140,083 owner occupied, 110,727 renter occupied) % of renters Memphis: 44% % of renters in the State: 45% I am currently helping some friends into their own homes in Memphis and I have firstly explain why owning might be good for them and convince them that having an asset is better than making a landlord rich. I am stunned that people are so anti home ownership here.