We don’t know if you’ve moved recently, but anyone who’s gone through the process knows what a hassle it is. Not only can moving be costly, but it’s generally stressful, too! So why do people do it? Thinking your rental residents move because they’re ready to buy a home is too simplified. While that may be the reason, other factors motivate people to seek “greener pastures.”

But first things first: here’s a quick recap of why real estate investors should diligently work to reduce rental turnover: It’s expensive!

• Lost Rental Income
  • No cash flow from rent while between residents.
• Marketing and Leasing Costs
  • Advertising costs and potentially utilizing leasing agents.
• Turnover Repairs and Deferred Maintenance
  • Refreshing the property with new paint, replacing flooring and fixtures, etc.
• Administrative and Legal Costs
  • Screening and preparing the lease agreement.
• Wear and Tear
  • Bumps, scrapes, chips, and holes from the move-in/move-out process
• Potential for Misaligned Pricing
  • Concessions to attract residents; rent adjustments based on current comps

Knowing that turnover is costly, it stands to reason that investors should do everything in their power to avoid it. And while you can often mitigate turnover with excellent management, great customer service, and a high-quality property, even that isn’t always enough!

Part of maximizing occupancy is understanding why people leave, including factors beyond your control. Anticipating these reasons means strategically positioning your properties to be their best option!

The Top 7 Reasons Renters Move (And What Investors Can Do About It)

We’re getting this data from Redfin’s 2024 survey answering the question, “Which of the following reflect reasons why you are likely to move in the next year?”

The percentages cited reflect answers from renters; the complete survey data also includes homeowners and combined overall statistics.

33.9% – Want More Space

Understandably, people want to move when they feel cramped. It may be a matter of poor storage/closet space, insufficient bedrooms to accommodate a growing family, home offices, or other needs, or the simple fact of sharing a bathroom. Investors, be mindful of the size of your properties. While wisdom says not to go too large, you want a functional space with a good layout and ample storage.

27.1% – Upgrade to a Better Home or Neighborhood

Quality matters. When you buy a property, be mindful of the quality of your reno work and the surrounding houses. Curb appeal, neighborhood lighting, exterior condition, noise, etc., all contribute. Target neighborhoods with long-term appeal.

23.5% – For Lower Overall Cost of Living

Too many real estate investors think they must invest in pricey primary markets to succeed. The truth is that Americans are more cash-strapped and budget-conscious than ever. Investors would do well to target markets with relative affordability – striking a balance between a reasonable cost and consistent demand.

22.2% – For Lower Rental/Home Prices

Sometimes, it is just a matter of price. The key here is to stay competitive. You want your residents to feel they’re getting their money’s worth rather than being ripped off. While we understand the need to raise prices relative to the property’s value over time, we must be reasonable and transparent about these rate changes.

16.3% – For Safety Concerns

Do your residents feel safe? This often comes down to two things: the security of the property itself and the outside environment. As an investor, you have the most control over your rental properties. Do exterior doors have secure locks? Security lighting? Mitigated trip-and-fall hazards? Security systems? These features can make a family feel much more secure.

Be mindful, too, of the neighborhood. If you wouldn’t feel comfortable living there, don’t assume your residents will!

12.9% – To Be with or Nearer to Family

Unfortunately, there’s not much investors can do about this one! Sometimes, people just have personal reasons for needing to move. And that’s okay. Just be sure you’re prepared to deal with turnover gracefully.

10.6% – For Natural Disasters/Climate Risk Concerns

Finally, more people are moving to avoid climate risks and natural disasters. We can’t say we blame them. For the sake of this survey, heat, drought, flooding, fire, smoke, or poor air quality were cited. Investors can do two things here. First, they can avoid high-risk markets where these are common concerns or occurrences. Second, they can mitigate the potential for damage. Buy properties on hills and outside of flood zones. Install storm doors and windows. Outline a safety protocol.

When you take these steps, you help your residents feel more secure and content to stay with you (and your property) for the long haul!

Further Reading: Here’s What Rental Residents REALLY Want from SFRs

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