Who is the Average Rental Property Owner?
After our discussion on homeownership, net worth, and how the two intercede, you may be curious about the average rental property owner and whether or not you could become one. In this article, I will present some data concerning the typical American landlord, which will hopefully encourage you in your own abilities and potential.
Average Landlord Characteristics:
Below is a list of characteristics regarding the average landlord in America. You may be surprised to find that there is a place for you in the industry.
- Age
According to Zippia’s article, 10% of landlords are 20-30 years old, 21% are 30-40 years old, and 69% are 40 years or older.
Data from Zippia, 2021. See more here.
Education Level
TransUnion reports that 34% of landlords don’t have a college education, while 66% do.
- Race
Zippia’s study includes a breakdown of American landlords by race (of which white Americans hold the largest percentage), as indicated by the chart below:
Data from Zippia, 2021. See more here.
Keep in mind that the national breakdown of races in America is as follows: White (60.1%), Black (12.2%), Hispanic or Latino (18.5%), Asian (5.6%), American Indian and Alaska Native (0.7%), Multiple Races (2.8%), Native Hawaiian and Other Pacific Islander (0.2%), as recorded here.
Notably, there is slightly less disparity among rental property ownership and race than homeownership and race, as discussed in a previous article.
- Income by Race and Education Level
The graph below, from Zippia (2021), indicates landlord income by race and education
level. Click here for more.
As the chart indicates, as education level increases, so does income level (with the exception of high school diploma or less to some college/associate degree). Furthermore, Asian landlords make more money than any other racial group.
Now that you have some general information about landlords, let’s look at some characteristics of the average landlord’s property.
Average Property Characteristics:
Still curious about whether or not rental property is for you? Let’s look at some characteristics of the average landlord’s property. It may be more attainable than you think.
- Quantity
According to a TransUnion study, the average landlord owns 3 properties.
- Value
The same TransUnion study provides a closer look at the value of properties owned by American landlords (see chart below).
Data from TransUnion, 2016. See more here.
As the chart indicates, the majority of properties (40%) owned by landlords have a total value of less than $200,000, while only 7% of properties have a total value of $1 million or more.
- Management
According to the same TransUnion study, 45% of landlords own and manage properties, 44% of landlords own and don’t manage properties, and 11% manage but don’t own properties.
Finally, let’s move onto the motivations and attitudes of the American landlord. You may be able to find something that resonates with you.
Landlord Motivations and Attitudes:
The following data is from a study conducted by TransUnion, which can be found here.
- Why Rent Out?
The chart below answers this question. The two highest motivators, according to the data, are for extra cash (35%) and investment (34%).
Data from TransUnion, 2016. See more here.
- Why Be a Landlord?
This question is answered through the data below. The top two reasons are because the person used to love living at the property (53%) and the person depends on the income from the property (50%), followed closely by the sentimental value of the property (47%).
Data from TransUnion, 2016. See more here.
Conclusion:
Do you (or could you) see yourself in any of the responses above? Hopefully, you’ve come to realize that owning rental property is pretty attainable. Though there are different demographics represented in the data (including age, race, education level, income level, location, etc.), they are all represented and experiencing rental property success in real time. From the above data, we can infer that rental property is present and functional, transcending countless trends and categories. So, what about you? Is there a spot waiting for you in the rental property industry? If so, maybe you should take a serious step or two toward owning your own rental property. Not sure where to start? Luckily, this blog functions to answer many of your questions and guide you through the process with the wisdom gained from personal experience. Sometimes, you just need to start.
In Summary:
- There are landlords of multiple races, differing education levels, and varying incomes. Chances are, your demographic is represented in some capacity.
- As far as property goes, the average landlord owns 3 properties. Out of all properties owned by landlords, many (40%) have a total value of $200,000 or less.
- Oftentimes, the average landlord rents out for extra cash or investment purposes.
What’s stopping you from pursuing rental property investing? Simply put, it works (across age, race, location, etc.), so what will it take for you to get started?