How Apartment Community Size Impacts Unit and Neighborhood Ratings
For their relatively lower rent levels, small apartment properties are surprisingly well-rated by their occupants, both in terms of unit quality and the neighborhoods in which they are located.
Overall Ratings of Units and Neighborhoods
While large apartment buildings are concentrated in amenity-rich urban neighborhoods and central business districts with higher rents, small properties are more widely dispersed within metro areas and offer less expensive rental options.
A comprehensive view of renter ratings by the Census Bureau’s American Housing Survey (AHS) revealed that despite lower rents, small buildings are competitive products in terms of units and neighborhood quality.
As shown below, around 65 % of households in small buildings rated their units between 7 and 10 (on a scale of 1 to 10, with 10 being the best)— toe-to-toe with the ratings by large building renters in 2015.
As shown below, small property households also rated their neighborhoods favorably. In fact, 62%, or the majority of responses, were in the 7 to 10 range.
A slightly higher number of respondents in large buildings rated both their units and neighborhoods in the highest rating categories (9 and 10).
Opinions on Neighborhood Amenities
The Census AHS delves deeper into specific aspects of the neighborhood, including amenities and public safety.
As shown below, nearly 90% of the respondents viewed schools in their neighborhood as being ‘good,’ which was marginally higher compared to large buildings.
Small building renters had a relatively lower opinion of public transportation access in their neighborhood compared to large property respondents. However, this information comes as little surprise given the latter’s concentration in the urban core.
Overall, small asset properties, if identified systematically, provide attractive opportunities for investors, given the acceptance of and demand from renters looking for decent quality of life, larger unit space and a relatively lower price.