If you ask anyone in the general public, most will probably tell you the old clinches. Most people assume that landlords are old males rolling in dough.
But today, this is not true. There are female landlords—landladies—too. Plus, not all are old and filthy rich. More people, younger and diverse, are now investing in buy-to-lets, thanks to low-interest rates enabling them borrow.
As we all know, it has become increasingly harder to afford putting down a deposit for a mortgage. Many people are now looking to rent as it’s a cheaper option.
Whether you’re a property owner looking for buy-to-lets or information on landlords or a tenant wondering who makes up the rental property owners, we’ll help you paint an image of today’s landlords and landladies.
So, who are the landlords and landladies today?
Contents:
- Generation and Age Groups
- Education
- Ethnic
- Incomes
- Private/Business/Investors Landlords
- Type of Renting Out Houses
- Average Portrait of Landlords
- Tendencies and Challenges for Landlords In 2023
- Conclusion
Generation and Age Groups
According to Reseachgate, 35% of landlords were between the age of 55 to 64 years in 2016, while 27% were 45 to 54 years old. In recent years, we’ve seen a dip in the demographics of landlords age-wise.
While most rental property owners were senior citizens, today’s landlords are as young as 40 years with 27% between 30 and 40 and 8% 20 to 30 years old.
However, factors such as race and gender affect the average age of landlords. For instance, while the average age of a white landlord is 48, that of a male African American is 50, and 46 for a male Hispanic landlord.
Education
About 50% of landlords and landladies have a bachelor’s degree, according to Zippia. 5% hold a Master’s degree, 21% an Associate’s degree, and 12% a High School Diploma.
25% have a business major, with accounting and psychology being other common majors among landlords.
Ethnic
White landlords are the most common, making up 67% of the landlord population. 16.3% are of Latino ethnicity, while African Americans make up 8.6%. Comparatively 4.9% are Asians and 0.6% are Alaska Native and Indian Americans.
However, Latino landlords have been increasing in number from 13% in 2010 to 16% in 2019. Since the pandemic, black and Hispanic landlords have faced more financial vulnerabilities. Their annual income is less compared to that of their white counterparts. Additionally, they own fewer properties, making diversification of risk more complicated and thus, their financial income becomes volatile during a crisis.
Incomes
According to Ipropertymanagement, the average landlord’s annual income is $73,659, 32.4% higher than the average household income. About a quarter of individually-owned rental properties have a gross income of $25,000+ in annual rent, while 1.5% gross 50,000.
However, they also pay for 89% of repairs and maintenance costs in their units. Many landlords cite maintenance as the most significant issue affecting them.
Private/Business/Investors Landlords
Individual investors own 71.6% of rental properties. That’s around 14.3 million out of approximately 20 million properties in the Rental Housing Finance Survey in 2018. For-profit businesses owned 18.8% (3.7 million properties).
However, businesses own more units and thus, have larger holdings—45% of the total units. Individuals, on the other hand, own just one or two properties.
Type of Renting Out Houses
The majority of Americans rent single-family homes, followed by apartment buildings. 25.5% of landlords own duplexes, 25.2% own condos, while 16% own townhouses. Other types of rental houses include triplexes, mobile homes, and multi-family properties.
- Single family homes: Designed to be occupied by just one family. Single family homes are houses detached from surrounding buildings.
- Apartments: Apartments vary from high-rise to low-rise and walk-up buildings. They may comprise as few as half a dozen units to hundreds of units in apartment complexes.
- Town homes: Also known as row houses, they share a connecting wall, front yard, or entryway.
- Condos: Condominiums and cooperatives are privately-owned units within multi-tenant buildings.
- Multi-family buildings: Houses multiple families such as duplexes and triplexes.
- Luxury properties for high-end renters
Common types of rental properties can also have sub-types. For instance, condos can be designed as studio units or lofts, apartments can be penthouses or units on the ground floor where you can access a small garden.
Additionally, different rental properties differ in construction, size, and the cost of ownership, among other differences.
Renting Geography
In an average state, 34.17% of households are renters. The number of rental units is highest in California while the rate of household rentership is highest in the District of Columbia.
New York City has the highest cost of rent in the country. While the national average for renting a 1-bedroom house is $1,722 the average price is $3,260 in New York City. San Francisco, Boston, Miami, and San Jose follow. The least expensive states are West Virginia, Indiana, and Iowa.
Average Portrait of Landlords
Today’s landlords and landladies are not old and retired. Rather, they’re as young as in their 30s and 40s+. Private landlords own 1-4 units and at least half have a bachelor’s degree.
Other factors such as ethnicity and gender also contribute to the image of the average landlord. There are more landlords than landladies. Additionally, white male landlords are more compared to male landlords from other ethnicities such as Latino and African-American.
Tendencies and Challenges for Landlords In 2023
Landlords are facing a myriad of challenges especially because of the effects of the pandemic. The worst is probably over, and things may get better with time, but landlords are still experiencing trickle-down effects.
They include:
- Late or missed rental payments: Late or missed payments are one of the major problems landlords faces. While some may have good reasons, your cash flow as a landlord is put to a halt. Consequently, you may not meet other financial responsibilities such as mortgage payments and maintenance costs.
- Prolonged vacancies: When some or all your units are vacant, you’ll not make any money. The property continues to depreciate, and you might run into losses as you have to pay your mortgage and taxes even when you’re not making money.
- Frequent property damage: While things in houses may become faulty, it becomes a significant challenge when things keep breaking weeks after replacement or servicing.
- Increasing legal obligations: The legal obligations faced by landlords are increasing. In 2022, they might be paying more in the form of taxes. Thus, they’ll have to find ways to cut their tax losses. Additionally, the government is likely to introduce other regulations to protect tenants, such as repossession procedures, notice periods, and service charges.
- Rising service costs: The rising interest rates, material costs, inflation, and service fee are causing an increase in service costs, eating into their profits.
- Keeping up with maintenance: Keeping up with maintenance costs related to repairs and upgrades can be a difficult task. If you don’t, your property will come apart and you’ll lose tenants. Thus, no matter how challenging it is, you have to keep up with repairs.
Today’s Landlords and Landladies Are Not What You Thought
The general perception is that landlords are old and affluent. However, we’re now seeing younger landlords and those from non-affluent backgrounds thanks to lower interest rates. However, today’s landlords also face challenges new to the market. Additionally, institution-owned rentals are increasing as more and more private businesses invest in the rental market.
