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Turnkey Real Estate Investing

4 min read

Successful SFR Investors Understand These Key Reasons People Rent

Thu, Jul 10, 2025

Renters Unpacking

So many factors converge to create the reality of the single-family rental market that it seems impossible to synthesize it into something our brains can fully capture. That doesn’t mean, though, that trying is an exercise in futility. 

Part of being a successful real estate investor in the SFR sector is understanding your clientele: the residents. Because yes, your renters are your customers. The relationship you build with them, either directly or indirectly through your property management team, is key to retention. And that retention, ultimately, is what will make your investments as profitable as possible.

Further Reading: What It REALLY Means to Maximize Rental Property Cash Flow

 

3 Reasons More People Turn to Single-Family Rentals

Reason #1 – Homeownership remains out of reach.

The most obvious reason people rent, and specifically rent single-family rental properties (SFRs), is the growing barrier to homeownership in the United States. The National Association of Realtors reported at the end of 2024 that the average age of first-time homebuyers is at an all-time high: 38 years old. In 1981, the average was 29.

Now, the reasons for this delay aren’t entirely financial (we’ll get into that later). However, it’s a significant part of the conversation. Debt loads are higher as the cost of living, education, and commonly financed essentials increases. This can prevent potential buyers from securing home financing and hinder their ability to save a down payment.

SFRs become the natural alternative—because life doesn’t stop even if finances don’t keep up.

Reason #2 – They don’t have the resources for ongoing homeownership costs.

Let’s further explore the costs associated with homeownership. As real estate investors, you know the importance of a safety net. You know how to carefully manage your debt-to-income ratio and how to prepare for the unexpected. First-time homebuyers don’t necessarily know these things in a practical sense. Because they’re often squeezed just for that downpayment, they don’t usually have extra resources to deal with ongoing homeownership costs and surprises.

Investors typically have the experience and objectivity, along with the guidance of trusted home inspectors, to avoid these issues. And even then, they’re more likely to have the financial resources to absorb unexpected costs.

Rentership offers a buffer for residents where they’re not responsible for paying for the care and upkeep of the property. And that’s a huge incentive to rent. Yes, they trade the opportunity to build equity. However, many view it as a worthwhile trade-off when living paycheck to paycheck.

Reason #3 – Lifestyle flexibility.

Lifestyle flexibility may not be what you think it is. While this is partly due to the more transient lifestyle of millennials and Gen Z, it is also essentially a result of delayed milestones. Just as people are waiting longer to buy houses, they’re waiting to marry and have children, too. Flexibility isn’t so much about being able to travel and job-hop; it's about being able to adapt to changing circumstances.

Young renters often anticipate significant life changes, such as marriage, having children, or building a career, which makes renting more appealing in case circumstances change. 

 

Okay…but how does this affect my investment strategy?

It’s important to note that, for many, renting isn’t necessarily the more affordable option. Not in terms of monthly costs. The data show that rent prices for SFRs are only increasing. There is a shortage of single-family rental (SFR) inventory, compounded by a shortage of overall housing inventory, which is pitted against increasing demand. While new construction efforts (including build-to-rent communities) alleviate some of the pressure, it’s tough out there!

So, what should investors do to attract and retain residents in the face of these economic pressures?

  • Size it right. SFR renters, especially those planning to expand their families, value space, storage, and some wiggle room. Target properties that accommodate growth.
  • Invest in good management. Property management is key here. Not having to pay for maintenance means little to a renter when the job doesn’t get done. Poor communication, slow responses, and a frustrating experience can kill the chances of lease renewals.
  • Make it feel worth the money. This goes hand in hand with providing excellent management, but it also means valuing the details. People don’t want to pay a premium price for the “landlord special.” Hire contractors who do things right. 
  • Consider flexibility options. People stay in properties longer when they feel they have a level of autonomy, freedom, and flexibility. Consider making concessions that allow residents to, in small ways, make the rental feel more like home. Painting walls, allowing pets (within reason), and other minor customizations can make an impact.

Ultimately, understanding your residents and approaching them as customers you serve will transform your dynamic—and increase retention.

 

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Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at REI Nation, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.

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