If you invest in commercial real estate, particularly apartment buildings, you know that your tenants tend to stay longer than in single-family homes. These properties have a number of advantages, including greater income. These are a few trends you should know about.

Reasons Renters Move

Recent research has shown that many couples who are ready to start families are moving from large apartment buildings into smaller buildings. Much of this has to do with the neighborhood surrounding the building. For example, larger facilities tend to be in downtown areas. These areas are typically full of businesses. They are walkable and engaging. However, some larger apartment complexes are in not-so-great areas of towns and cities.

Smaller buildings tend to have a more residential location. They may have local parks or even green space within the complex. Because the traffic and noise are reduced in residential areas, these buildings are more family-friendly.

Renters moved from small buildings when they were ready to create their own households. They often searched for better homes and neighborhoods. Those who moved from large buildings had similar reasons, but they also sought to move closer to their families or because they were starting new jobs. However, if their jobs were local and further away from their apartments, the commute was not their reason for moving.

Changes in Rental Periods

Today’s tenants tend to stay in their rentals for longer than their initial one- or two-year leases. This is especially true for those who live in small buildings. For example, between 2010 and 2015, the number of people who moved from small buildings decreased by 5%, from 34% to 29%. In fact, the overall moving rate of the entire US population (and those from outside moving into the US) was only 15% during this period.

Although those in large buildings move more frequently, their rates are also reducing. Therefore, if your building is well-maintained, you may have tenants that stay for very long periods of time, which will save you time and money because you aren’t consistently trying to find new tenants.

Your Takeaways

As a commercial real estate investor, it is important that you stay up to date on these trends. Although several reasons for moving were identified, they are not the only reasons that renters move. Your tenants’ rental choices are often multidimensional.

Therefore, position your rentals to attract tenants. Highlight the neighborhood and unit size, and make your leasing process easier, especially for new workers who need a place to live quickly, because they tend to stay longer than their lease periods.

Your job as a commercial real estate investor doesn’t stop when you sign the mortgage papers. Stay informed of local trends so that you can position your properties for maximum profitability.