State of Independent Landlords 2017

Every year, we survey as many independent landlords as possible to figure out what it’s like to own and manage a rental property in 2017. This year, we got more responses than ever before - 484 - giving us an even more accurate pulse on what property owners think, feel, fear, and value.

Before we jump in, we want to acknowledge the significance of two ongoing discussions. The first is about how landlords got into the business- did they inherit their property? Or buy a property with a goal in mind? We wanted to understand exactly how landlords started their businesses. The second discussion is on what independent landlords across the nation care about. What are they hoping to achieve? We included a number of questions about these topics in our 2017 survey and the results are eye-opening. Here are three important takeaways as a sneak preview:

  • Landlords aren’t the accidental landlords we heard stories about in 2008. Instead, they’re purposeful, having bought properties intentionally to hold for the long-term. Although a handful of landlords stumbled into owning a property (change in careers or merging lives with a significant other), most landlords actively decided to buy a property with the goal of building wealth for retirement.
  • The most time consuming aspect of managing a rental is maintenance, followed by finding and screening tenants. Landlords are more concerned about property damage caused by tenants than they are about receiving rent on time (63% agreed that they receive rent on time).
  • Landlords who use software to manage their property are saving approximately 8 hours per month related to rental tasks. That means the average landlord saves $600 per month by switching from pen and paper to online software, assuming an annual salary of $150,000.

We understand you want to know the state of the industry and how you compare to owners across the nation. To answer your questions, we’re excited to publish industry-leading data specific to independent landlords like you. We hope you find it valuable and insightful. Below, we included an overview of who the respondents in the survey are, including how they fit into the market, their demographics, and where they are located. Further below, you'll see the complete survey results.

Market Share

The US rental market is comprised of two different kinds of owners: the large institutional owner and the independent owner. Of the 44 million rental units in the US, independent landlords own the majority with a total of 24 million units. There are 8 million independent landlords across the country. Collectively, they collect over 300+ billion dollars in rent each year.
The US rental market is comprised of two different kinds of owners: the large institutional owner and the independent owner. Of the 44 million rental units in the US, independent landlords own the majority with a total of 24 million units.

There are 8 million independent landlords across the country. Collectively, they collect over 300+ billion dollars in rent each year.

Demographics

Demographics: The majority of independent landlords are between 30-59 years old. They have full-time jobs and manage their rental on the side. They tend to own one unit with the goal of buying more properties. Their ideal portfolio size is 2-5 units. Most of our landlords want slow-and-steady growth. They’ve adopted the rent-and-hold strategy, as opposed to fixing and flipping.
The majority of our survey respondents are between 30-59 years old. They have full-time jobs and manage their rental on the side. They tend to own one unit with the goal of buying more properties. Their ideal portfolio size is 2-5 units.

Most of our landlords want slow-and-steady growth. They’ve adopted the rent-and-hold strategy, as opposed to fixing and flipping.

Location

Location of independent landlords: The location of landlords tends to follow population density in large cities across the U.S. 80% of our landlords live within 20 miles of their rental property.
The location of landlords tends to follow population density in large cities across the U.S. 80% of our landlords live within 20 miles of their rental property.

Complete Survey Results

About the Respondents

How did you become a landlord? We asked our respondents how they became landlords. 65.7% said they bought a property to make money and save for retirement.
Why are you a landlord? 56.3% of our landlords said they are a landlord to build wealth and save money for retirement.
Is real estate your main investment vehicle? Most of our landlords replied that real estate is not their main investment vehicle. And 9% don't consider their rental an investment vehicle at all.
How many rental units do you own? The majority of independent landlords own one rental unit. The next most common is owning 2-4 units. Only 20% own ten units or more.
Do you own individually or in a legal entity? 78% of our landlords own their rental unit individually.
What type of rental properties to you own? We surveyed our landlords to find out if they own a single family home, townhome, duplex, triplex, quadplex, condo, multi-family property, mobile home, or commercial landlord. The majority (61.6%) own a single family home. The next most common are duplexes and condos.
How old are you? The majority of our landlords are between 30-59 years old. 23.6% are 50-59 which is the largest portion of the age groups.
How long have you been a landlord? 41% of our landlords have been doing this for 11+ years. Another 41% have been doing this for 5 years or less. 17.8% have been doing this for 6-10 years.
Do you have a career? 3/4 of our landlords have a job in addition to owning and managing their rentals. 59% have a full-time job and 16% have a part-time job.

Time Spent

How many hours per week do you spend on rental tasks? The majority of landlords who use software, like Avail, only spend one hour per week on rental tasks.
How many hours do you spend without Avail? Most landlords who do not use software spend 1-5 hours on rental tasks each week. Landlords who use online software save roughly eight hours per week.
Do you live within 20 miles of your rental property? The majority of our landlords (80%) live within 20 miles of their rental property.
Do you prefer to do any old-school landlord tasks? The most common old task task is maintenance. This is also the task that landlords in general are spending the most time on.
Do you have insurance for your rental? 97% of landlords have insurance for their property.
How do you file your taxes? The majority (58%) file their taxes by hiring an accountant. The next most common way to file taxes is using an online software (35%). Only 4% are filing their taxes by hand.
What part of being a landlord is the most time-consuming? The most time consuming task for landlords is managing maintenance. The second most time consuming task is finding and screening tenants.
It's easy to find tenants.
Are you worried about property damage? Most landlords agree that they are concerned about property damage.
Do you receive rent on time? 63% of landlords agree that they receive rent on time.
How often do you fix maintenance problems? Most landlords believe they are fixing maintenance problems often.
Your tenants are easy to work with. Most of our landlords (67%) agree that their landlords are easy to work with.

Goals

Are you buying another rental property in the next 5 years? 58% of our landlords are planning on buying another property in the next 5 years.
Are you selling your rental property in the next 5 years? Only 32% of our landlords are planning on selling their property in the next 5 years.
What's your ideal portfolio size? The most common ideal portfolio size is 2-5 units. Followed by 11+ units.
How would you describe your rental strategy? The majority (53%) of our landlords consider their strategy to be slow-and-steady.
Which investment model is most accurate for you? The majority of our landlords (90%) consider their investment model to be rent-and-hold, rather than fixing-and-flipping.
Have you ever used or considered cash-out financing? Most landlords (70%) have no considered or ever used cash-out financing.
Have you ever used or considered a renovation loan? Most of our landlords (79%) have never used or ever considered a renovation loan.

Challenges

Why are you not buying another property in the next few years?
I'm satisfied with the financing options available to me.
It's easy to get a mortgage approved.
Have you ever been disappointed with any of the following aspects of rental property financing?
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