How Many Renters Available?

“Too Many Already?”

Will you be able to find a renter for you new upper level unit(s)? National Main Street at one time suggested that 3% of any community’s population desires to live downtown. This statistic is difficult to verify, but over my 30 years working in downtown districts, I would say it is at least that much. I have yet to see a downtown district have enough available space to max out the supply of renters available. One must consider a few strategic perspectives in order to fully take advantage of your area.

Is your community undergoing a movement toward improving the downtown district? Do you see other buildings being improved? One advantage that is built into downtown is a readymade clustering area. Most of us like to be where other people are. Living in clusters is no different than clustering a bunch of restaurants together. We innately gravitate to an area we drive to before we decide on the actual place to eat.

Does your city provide any financial incentive for downtown improvements? This could be a minimal amount relative to the entire project you are doing, but it is an offering to encourage development nonetheless. For the record, rarely does a city provide the amount of incentives you think they should.

Is there a supplier of renters nearby? Colleges located near the downtown district are an ideal feeder of rental possibilities. Is there an anchor company that hires lots of employees located near downtown? Research this company so you know what kind of unit best serves their needs. Better yet, make contact with them. I have seen a company like these rent one or two units from you just to support their personal needs. This is a great renter because it might sit without a tenant for a period of time. You continue to receive payments without the wear and tear on your unit.

Understand what your best local rental market is. As suggested in the paragraph above, a local feeder of renters is a good position to be in, but you still need to design your apartment according to the market renter. College students often like to have a roommate, making two and three bedroom units a better strategy than a one bedroom. On the other hand, if the company in town primarily hires young professionals, one bedroom units might be the way to go.