Surveying first-time renters, Piñata found that 92% of respondents are concerned that the current economy will impact their ability to continue renting, with more than a third, 38%, saying they are “very” worried.
Of these first-time renters, 72% were delayed in becoming renters, with the top reasons being not having enough saved, not earning enough to afford rent, and pandemic-related challenges.
“First-time renters are entering the rental market at a turbulent time. The past year has seen record-high rent prices, record-low vacancies, and wild shifts in the market,” says Lily Liu, CEO of Piñata. “The survey shows that many first-time renters are uneasy about their finances and how it impacts their ability to get a rental or continue to rent. At the same time, even first-time renters have high expectations when it comes to a home that meets their lifestyle choices, such as working from home and owning pets, and property managers and landlords need to acknowledge these needs.”
Despite financial concerns, 47% said they do not live with a roommate or significant other, and 60% said they were concerned about their ability to get an apartment due to their income. When budgeting for their first rental, 68% say they factored security deposits into their budget, but less than half factored any other expenses including moving costs, rental insurance, and pet fees.
Almost two-thirds of first-time renters said they believe they have good credit, and 25% noted they have low or no credit but are aware of it and are taking steps to improve scores. Of those making less than $50,000, only 36% said they have good credit and 64% either reported having bad credit or being unaware of their score—24% of these respondents said they were concerned about their ability to secure an apartment because of this. Most respondents, 88%, reported rent payments to credit bureaus, with 50% saying their landlord does it for them, while 23% said they typically pay rent with a credit card.
The major deciding factor for renters when choosing a rental was location at 69%, followed by cost at 62%. Renters earning less than $50,000 noted cost as the most important factor. In addition to location and cost, 80% said they would not even consider renting a place that did not allow pets, including 9% that did not currently have pets. Dog parks, grooming stations, and other pet amenities were also very important, with 34% saying these amenities were nonnegotiable.
Other amenities ranked fourth as a consideration, including central heating and air-conditioning at 54% and in-unit washers and dryers at 39%. Pools were listed among the least important amenities for first-time renters (40%), followed by gyms at 44%. For renters who work from home, noise was a top consideration (38%) as well as the availability of high-speed internet (31%).
For all age groups, flexibility to move around was a top motivation (24%) for renting, especially those in remote work (27%). First-time renters earning $50,000 or less cited not having enough money saved to purchase a home as a primary motivator (26%). Renters making $125,000 said that noisy neighbors (32%) are their least favorite thing about renting.
Three to five years is how long most renters predicted they will rent, and 19% said they plan on renting longer than five years or long term with no set plans to buy. Respondents making over $150,000 said they are highly considering a switch to buying, with 49% planning to as soon as possible or within the next year or two.