Rental property owners include small, individual owners as well as large, institutional owners. There are significant differences in the types of properties owned by different types of owners. While we do not have data specific to Virginia, there is new data out on the characteristics of property managers nationally.
According to the U.S. Census Bureau’s 2018 Rental Housing Finance Survey, the largest share of rental properties is those owned by individual investors. Individual investors own nearly three-quarters (71.6%) of all rental properties nationally; however, individual investors own just about 44% of all rental units.
About 16% of rental properties are owned by a Limited Liability Partnership (LLP), Limited Partnership (LP), or a Limited Liability Company (LLC), which are generally formed for the purpose of purchasing and/or managing the property or properties. The entities account for about 40% of all rental units nationwide.
Only about 3.6% of rental properties are owned by a trustee for an estate. Real estate corporations owned about 1.2% of rental properties, and another 1.0% are owned by Real Estate Investment Trusts (REITs).
Property Type. Individual investors are significantly more likely than other types of owners to own single-family rentals. Nearly two thirds of units owned by individual investors (62.3%) are single-family units. Another 22.8% of units owned by individual investors are units in two-to-four-unit buildings.
Other types of owners are much more likely to own large apartment buildings. About 60% of units owned by LLPs, LPs, or LLCs are units in buildings with 50 or more units. Similarly, about 60% of units owned by general partnerships, real estate corporations, and REITs are in large, 50+ unit buildings.
Advertisement. While many renters find their apartment through an online or other search, according to the Census Bureau data on rental property owners, more than half of all rental properties are not actively advertised.
Property managers and landlords are more likely to fill vacancies via word of mouth rather than through a website, other online advertising, apartment rental agency, real estate agent, or multiple listing service. Multifamily apartment buildings are significantly more likely to be actively advertised than are single-family rentals.
Property Management. About 12% of rental properties nationwide are professionally managed by a management company and 11.1% are managed by a management agent directly employed by the property owned. However, the majority of rental properties are managed by the property owner him or herself or an unpaid agent of the owner.
Individual investors are extremely likely to self-manage properties, with 80% reporting that they are responsible for day-to-day property management themselves. About 9.6% of individual investor owners use a property management company and 7.0% hire a management agent that they directly employ.
For more information on Virginia’s rental market, please be sure to check out the recent presentation given as part of Virginia REALTORS® October 16 PMX Forum.