New report from Redfin details why both landlords and tenants are leaving in 2024. While the top reasons are the same as they always have been—the desire for more space, greater accessibility, and proximity to family members—several reasons chosen by significant numbers of respondents stand out. These are concerns about crime and the impact of the climate.
Overall, 17.5% of respondents said they plan to move within the next year due to crime, while 13.7% said they plan to move due to weather hazards. These two concerns seemed to be higher on people’s minds than seeking areas with lower property taxes (11%), changes in family conditions (10.3%), and better school ratings (8.8%).
Of course, any report provides a limited snapshot of the population as a whole, and how these statistics actually play out will vary by location. Still, these are surprising statistics that should be investigated in more depth. WHO indeed is concerned about these things, and investors should consider these factors when making theirs investment decisions?
Concerned Homeowners vs. Carefree Renters? It’s Not So Easy
Logically, that makes sense homeowners in general will be more concerned about long-term issues such as climate change. According to the report, 20.4% of homeowners are concerned about crime in their area compared to 16.3% of renters. When it comes weather concerns, mismatch big ones: 17.4% of homeowners compared to 10.6% of renters.
The temptation here is to say thatof course, Homeowners are very worried—they have to deal with repairs if their property it’s broken with very bad weather. In addition, because selling a family home is not as easy as leaving a rental property, they have to endure the impact of local crime for a long time. The traditional view is that employers easily you don’t have to worry all that especially because they move more than homeowners. If something goes wrong, they can just go away.
But this is only part of the story and does not account for the changing realities of hiring. People’s perceptions of danger are changing because of them recruiting experience they change. Let’s look at some examples of how this plays out.
The Crime Factor
Obviously, Concern about crime is nothing new. Both renters and homeowners will almost always choose areas with low crime rates—except, of course, in hot markets very limited inventories, where people may not have much of a to choose. Employers in tropical areas will take risks, at least initially. Others will move to an area with more crime but cheaper.
Chicago is something big example of a city that is always famous for it’s very hot rental market, but it has its fair share of problems with crime in certain areas. For an investor, this type of city offers many opportunities but also more work in it principles of reducing the risk associated with ensuring tenants are concerned about crime in the area.
Jonathan Klemma real estate investor in the Chicago area, explains the evolution of his investment strategy on BiggerPockets this way: “I started investing in better neighborhoods and looked for higher risk/higher reward areas with multi-family properties on the South Side of Chicago.”
Klemm confirms that “especially on the South Side, there are neighborhoods where crime is the No. 1 factor. At one point, he even remember that “talking to the 3rd tactical narcotics unit.”
That said, Klemm doesn’t want to deter other investors from investing in high-risk but high-reward areas. You will need to do extra work to secure your property and give your tenants the assurance they need.
This this will be especially true for long-term rental investors and single women. Female respondents to the Redfin report are more likely than males to cite crime as a major concern. And we know that more single people are renting on their own than ever before before–16.7 million from 2023. Overall, they are hiring for long, and, with 1 in 6 rents the same place for 10 years or more. It is a very different proposition to live with the risk of crime where you live on your own and plans to stay longer.
Climate Risk Factor
Weather risk has traditionally not been a factor in most people’s travel decisions. Despite all the warnings and extreme weather conditions, people have not stopped moving to California, Florida, or anywhere else attractive and beautiful places that just it happened at high risk of the impact of climate change.
There have been signs that there are pockets of space where this is changing. Many it’s obvious an example now is Florida, where real estate sales have slow down, a lot as a result of the impact of extreme weather and home insurance issues. The same problems they affect parts of other states, especially California and Louisiana.
Well, until nowMany discussions have focused on homeowners and their concerns. This is because landlords are more emotionally affected than tenants. Home insurance premiums are rising and in areas that have not been directly hit by a hurricane because insurance companies are trying to protect themselves from things that may happen in the future.
Tenants don’t have to worry about insurance premiums, or whether or not they’ll leave the house twice or five. a period of years. Thishowever, it is an old story again. The new reality in several areas of the US is that employers they are increasingly having a direct impact, and that’s it it changes everything. If your home floods or catches fire, it doesn’t matter if you own or rent: You will lose everything.
Robert Washington is the owner of Savvy Buyers Realtyworking in The Tampa/St. Petersburg place. His recent experience is that he is “starting to see” lessors pay more attention to flood prone areas—something that previously was ”not on the minds of lessors.” Why? Because “before Hurricane Helene, it was a he is beautiful rare occurrence in homes in many flood zones to actually flood.”
Something that is a perceived risk is just not to go prevent tenants from moving to desirable areas in warmer climates. However, Washington told BiggerPockets that recently, “Many renters who didn’t have property insurance lost everything.” And when you know someone’s experience, you may think twice about your impulsive decisions—or you may be motivated to move away from a more dangerous place.
We know that even an experience made by a friend or family member has a major impact on how people perceive danger. Fannie Mae asked homeowners and renters about their experiences with weather-related property damage in the area survey in 2023. Interestingly, most tenants (62%) did not experience weather-related damage. themselves but you’ve seen a family member or friend experience it.
As a result, nearly half (49%) of respondents said they are very or somewhat concerned about possible weather-related damage to their homes. As we can see, you don’t have to have your own yours a roof blown off by a storm to worry about a weather hazard; you just you need to see a reliable source (eg, family) who did it.
Finally, concerns about weather hazards are not limited to property damage. Tenants and landlords likewise concerns about the potential health impacts of climate change. The weather cited by the highest percentage of renters (34%) in the Fannie Mae report was extreme heat. There is no federal law for that requires landlords to provide AC units for rent; it may not be a big It’s a problem if you’re renting in Minnesota, but it’s a potentially dangerous situation in a place like Texas.
Extreme heat in places that affected by wildfire smoke also translates to low air quality. Although a few days of bad air in the summer will not prevent anyone from renting in the area of their choice, if low air quality becomes the norm (as it is already happening in some Western cities), it can factor in people’s decision to travel. Any such concern will be big ones among younger groups—a Redfin report reveals that 14.9% of Gen Z respondents are concerned about the weather, as opposed to 12.5% of their Gen X counterparts.
Also, changing hiring patterns will play a role here. People are hiring longer and later in life. The median age of the US renter is now 40 years—closer to age groups that may be concerned about the impact of bad air on their lungs and other potential health problems caused by extreme weather.
Final thoughts
Of course, of course it is important placing these elements in the right place. Climate change or crime concerns alone are very unlikely to happen make a rental move in the place of their choice, as long as everything else goes well.
What investors need to look at here is the bottom line effect. Since this concern is now in the back of people’s minds, it is possible well be the final factor influencing decisions that already consideration. If the tenant finds a place that affordable too it is open in a place they consider safe from the weather and/or crime risks, all factors combined may just enough to move.
You shouldn’t choose an area based on climate safety alone, and it doesn’t really make sense to avoid an area with some crime problems if you’re an experienced investor. But you will absolutely need it we are sure that the main factors that go into the decision-making of tenants are strong: an affordable, spacious home where they will want to live, all things being equal.
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A Note About BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BiggerPockets.
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