EDURAIN

AUDIENCE REPORT

Amaya Daniels, Eva Dembo, Brett Harmon, Ritika Tejwani, Ryan Lo

MANAGEMENT 201 – THE ARMADILLOS

Table of Contents
Introduction..................................................................................................................... 2
Problem ..................................................................................................................................2
Objectives ...............................................................................................................................2
Methodology ...........................................................................................................................2
Context ............................................................................................................................ 2
Industry Analysis ....................................................................................................................2
Competition ............................................................................................................................4
Method of Communication......................................................................................................5
Audience ......................................................................................................................... 5
Demographics .........................................................................................................................5
Psychographics .......................................................................................................................6
Motivators...............................................................................................................................7
Deterrents ...............................................................................................................................8
Conclusion ...................................................................................................................... 8
Bibliography .................................................................................................................... 9
Team Contributions ....................................................................................................... 10

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Introduction
Problem
To maintain an effective and profitable business, EDUrain must attract landlords to list their
properties on their website. However, many landlords are disinterested because they view college
students as unreliable tenants.

The lack of landlords on EDUrain’s website negatively impacts the company and college
students. College students are missing out on quality and credible rentals. Furthermore, landlords
are failing to capture a crucial demographic.

Objectives
Our objective is to convince landlords that students are preferable tenants with the hope that they
list their properties on EDUrain to rent to college students. This report provides an overview of
the rental industry and demographics, psychographics, motivators, and deterrents of landlords.

Methodology
This report aims to answer four main questions to get closer to tackling the problem EDUrain is
facing to attract more landlords to list their properties to be available for college students:
• What is the current state of the housing industry and its main competitors?
• What are common problems within the renting process?
• How does a landlord’s lifestyle, interactions, and laws affect their decision-making
process?
• What truly motivates and deters landlords from renting to students?

In this report, we gathered our sources from landlord forums, industry databases, and real estate
publications.

Context
Industry Analysis
The apartment rental industry is a large and continuously growing industry valued at $229.1
billion (based on revenue) (Apartment Rental Industry in the US - Market Research Report
2022). Though the market fluctuates year-to-year, over the past five years, on average, the annual
growth of the U.S. apartment rental market is approximately 1% (Apartment Rental Industry in
the US - Market Research Report 2022). In addition to this growth, the apartment turnover rate
continues to fall. Companies and landlords consistently enter the market because of the high
returns, with 716,493 businesses currently in the industry (Apartment Rental Industry in the US -
Market Research Report 2022).

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Currently, one of the primary issues in the apartment rental industry is the oversupply of luxury
apartments and the shortage of middle/low end rental options (Apartment Rental Industry in the
US - Market Research Report 2022). This is largely because over the past several years, rental
prices and revenue within the market have increased. But because of high rental prices, rental
vacancy rates have also increased. In the long run, due to economic stabilization and a natural
shift towards equilibrium, there will be a decrease in rental prices. For this reason, in the coming
years, the apartment rental industry is expected to contract, indicating an increase in difficulty for
landlords to find and retain tenants.

In considering ways to mitigate this challenge, we must first consider how landlords currently
find tenants:
• Online websites, such as Realtor.com, Zillow, etc.
• Social media
• Newspapers
• Realtors

For landlords to maintain high revenue and reliable tenants for their properties during this market
contraction, they must focus on the properties and sector of tenants that will provide the most
stability in willingness to pay. Ideal tenants tend to be those who have a clean criminal and
eviction record, a good financial and credit history, a stable income, employment, are honest, are
communicative, and consistently pay their rent on time (Team 2021). We narrow our evaluation
of the apartment rental industry to a sector of tenants that fits these ideals: students. The
following characteristics are unique to the student housing market (Bouchrika 2022):
• Stability: Housing properties near universities/college-towns find strong and consistent
returns. This is largely because college towns tend to have stronger economies created by
stable working environments and employment opportunities. Demand is rarely an issue in
these areas as there continues to remain a large percentage of students that require off-
campus housing. There are also several college graduates who choose to stay in an area
near the university they attended, which contributes to a stronger economy as these
graduates typically have consistent and high-paying employment. College towns tend to
have a more prosperous and safer environment with growing businesses, hospitals, police
departments, and city parks or other developments. As a result, the housing market within
these areas tends to be more reliable and profitable.
• Growth: The demand for higher education continues to grow as the middle class
continues to grow, and in turn, this increases the demand for student housing. University
enrollments and demand for higher education is expected to consistently increase in the
coming years. As a result, student housing is a reliable source of revenue for apartment
rentals.
• Impacts of COVID-19 pandemic: In particular, the student housing market for
apartment rentals has grown significantly in the past few years because of the COVID-19

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 pandemic. Because of university-imposed restrictions on student living and social
distancing, a large percentage of students moved to off-campus apartments to avoid such
limitations. This trend has continued post-pandemic, as a higher rate of students prefer to
live in apartments near campus rather than in on-campus residence buildings. This
contributes to the increase and stability in demand for student housing.

The real estate market near universities is driven by students and provides a big opportunity for
landlords to find reliable tenants and consistent revenue, which is especially appealing
considering the expected future contraction of the apartment rental market.

Competition
The student housing industry has numerous competitors. These consist of both generic housing
websites such as Apartments.com, Zillow, and Realtor.com and student-specific competitors
such as NestPick, ULoop, and ForRentUniversity. These are just a few of the countless sites
dedicated to serving as a marketplace for tenants and landlords.

General housing websites offer many services for their users. Some of the most popular services
are a rent affordability calculator, mobile applications, help centers, moving assistance, and
learning more about specific neighborhoods. Many Student-specific housing competitors offer
additional services for students such as roommate searches, student and parent written
guides/blogs, furniture rental, and virtual tours. Most sites are free for listings but offer a variety
of paid advertising plans, however, there are some housing websites such as ULoop charge a flat
fee of $50 to post a property to all schools within 10 miles.

The National Family Multifamily Housing Council estimates that student housing rentals
represent about 7 to 12% of the total U.S. rental market (Dutton 2021).

Student-oriented renting sites also compete with university housing, as almost 60% of full-time
students enrolled in private nonprofit four-year college and 36% of public four-year college
students live in college housing (Urban Institute n.d.).

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The main advantage that these sites have over EDUrain is the magnitude of buyers and sellers on
their sites. This marketplace has two sides: potential tenants and landlords. And to attract the
tenants, there must be ample landlords. But to attract landlords, you need ample tenants. These
sites have built their reputation over the years and have a plethora of potential tenants and
landlords.

Audience
Demographics
Landlords have a high median income of $97,000 dollars a year, which is significantly higher
than average median income within the United States. Furthermore, the average landlord has at
least three properties. Additionally, the average landlord rents to 2.5 households or 5.9
individuals. Many properties are inherited by landlords, so 12.4% of individually owned rental
properties have belonged to the same landlord, or family for 30 years or more. (Reed, 29
Insightful Landlord Statistics – 2022 2022)

55% of landlords own their units, whereas the other 45% of units are under corporate ownership
by a large real estate or financial institution. Within units that are owned by landlords, 79.8% are
managed by the landlord themselves. In 2022, increases in real estate prices have caused
landlords to ask for rent that is 8.4% higher than 2021. It is very unlikely however that a landlord
will renovate their units, as only 1.2% of rental properties are remodeled or rehabilitated each
year (IPropertyManagement 2022). St. Louis landlords in particular are seeing rents rise as jobs
are growing 2% in St. Louis, median income is rising 6%, and St. Louis is one of the best 100
cities for renters in the US (Rohde, The St. Louis real estate market: Stats & trends for 2022
2022).

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However, being a landlord is not as glamorous as it may seem. Nearly half of individual
landlords reported net losses on their properties, and losses to vacancies are three times higher
than losses to collections and concessions combined. 40.6% of landlords have reported having a
tenant who suddenly stop paying rent, and evictions cost $3,500 per case. It is extremely likely
that a landlord will evict a tenant as 44.7% of landlords have reported evicting a tenant
(IPropertyManagement 2022).

Psychographics

Lifestyle
Landlords attend to various duties, which may be completed by family or outside contractors.
This means that often the information received by landlords is not directly from the transmitter.

Landlords want to have the most low-risk tenants possible and will utilize their expansive
network and resources to ensure that the chosen tenants will bring a positive profit while also
causing minimal issues for them.

Landlord Decision Making

Past Experiences: Landlords experience many colorful characters of tenants throughout their
careers and must deal with unique situations that appear alongside them. These experiences with
tenants will remain and be utilized to improve responses in future tenant situations and gauge
judgement for prospective tenants. (Okoruwa 2020).

Landlord Testimonials: Landlords network with landlords on a micro and macro level through
online forums, social media, and in-person events. With an increase in millennial landlords, they
are more active on social media and utilize it to share information. Social media has become a
tool for landlords to look for advice and opinions that can influence landlords on how they weigh
their options.

Relator Publication Endorsements: Landlords look to credible business organizations,

publications, and relator mailing lists. For example, the St. Louis Business Journal’s residential

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real estate article section is for avid landlord readers looking for advice or information about the
current market. Landlords will often be influenced due to the credible information provided.

Legal Restrictions: The Federal Fair Housing Act prohibits discrimination based on: Race,
Color, Religion, National Origin, Gender, Age, Familial status, and Disability (Rohde, What
Landlords Need to Know About Renting to College Students 2022). This sets ground rules for
landlords to make decisions about accepting applicants. However, landlords have found
loopholes to still discriminate. For example, a landlord cannot discriminate based on the age of a
college student tenant, but they can refuse to rent to them for reasons such as a low credit score
or suspected insufficient income.

Scenario
Picture Patrick. Patrick bought an apartment unit one year ago. He first listed his apartment unit
on Apartments.com. Given the proximity to Washington University in St. Louis, his unit was
popular amongst college students. Two seniors from WashU, Sarah and Sally contacted Patrick
and were able to sign a lease to live in his unit.

Patrick now must find new tenants for his unit. Sally and Sarah know two juniors at WashU that
are looking for a place to live next year. Patrick meets with these juniors, and they agree on a
lease. Patrick was inclined to meet with these juniors because they are students who will need a
place to live (reliable tenants). This is commonly how rentals work. Patrick did not have to list
his unit online and was able to fill his unit in advance. Evictions are more expensive than
vacancies (Henson 2011), and Patrick has not had any issues with Sally and Sarah, so he assumes
that these juniors will not be difficult clients.

Motivators
Landlords have three key motivators that should be addressed in any strategy: generating
revenue, property maintenance, and risk avoidance.

• Revenue: Landlords are primarily motivated by a desire to generate revenue. Renting is a

for-profit business and a passive revenue source for over 10.6 million Americans (Reed
n.d.). Landlords are constantly looking for ways to increase their revenue (raising their
rent) and decrease costs (often utilities, property damage, and upkeep costs).

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 • Maintenance-free & Risk-averse: Maintaining their properties is another concern, as
owners, on average, have three properties and must respond to each tenant’s needs, with
half of all landlords managing all their properties (Reed n.d.). They often did not initially
buy the property to rent it out, as it was their residence at one point. This creates
emotional ties with the property, making landlords cautious of whom they allow to live in
their abode. Above all else, they're afraid of risk. They prefer the simplicity and security
of what they find comfortable: older tenants. They desire low turnover and long-term
tenants who pay rent on time and treat their properties like their own.
If EDUrain can deliver on these goals, landlords would listen to EDUrain and rent their
properties out to students

Deterrents
Property damage, eviction, troublesome tenants, unpaid rent, and expenses often deter landlords
from leasing their homes.

• Costs: On average, landlords’ field six calls annually from their tenants about property
repairs, with 89% of landlords paying for their repairs (Reed n.d.). Costs can quickly add
up, sometimes to the point where the costs may even outweigh the rental income and
headache. It is estimated that these costs may be between $383 and $450 per unit per
month (Reed n.d.). Further, in the event of a problematic tenant, getting them evicted
may cost up to $10,000 to add insult to injury (Reed n.d.).
• Negative student tenant perceptions: Given the current climate of rent control, the
remaining COVID rent forgiveness policies, and the inability to evict problematic
tenants, these landlords might find the potential income stream not worth the potential
headache. Students are perceived as irresponsible tenants prone to damage properties and
cause headaches and monetary loss while only staying for a few years at a time.
Landlords may feel that EDUrain is biased and doesn’t reflect their needs and goals, and
thus isn’t worth the hassle.

Conclusion
Local St. Louis landlords pose a challenge as EDUrain’s prospective target audience due to
current climates of the housing industry, the St. Louis area, and their current decision-making
processes. These landlords are mainly motivated by generating revenue and low-maintenance,
long term tenants. If executed correctly by EDUrain, more landlords will gravitate towards
listing their properties on the website. However, if these crucial elements are not considered,
landlords will move away from partnering with EDUrain.

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Bibliography
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Dutton, Holly. 2021. Multi-Housing News. 1 31. Accessed 11 3, 2022.
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Henson, Trevor. 2011. Tips on how to fill apartment vacancies: Tip #1 Refer-a-friend. July 15.
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Reed, Catherine. 2022. 29 Insightful Landlord Statistics – 2022. April 18. Accessed Novemeber
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expenses/room-and-board/#/.

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Team Contributions
During team meetings, we collaborated together to assign tasks to prepare for future meetings.
These tasks included research and writing. We individually did these tasks and came together as
a group to go over the information to ensure was flow of our information.

Amaya Daniels: Psychographics

Eva Dembo: Demographics
Brett Harmon: Problem, Objective, Competition
Ritika Tejwani: Industry Analysis
Ryan Lo: Motivators/Deterrents
Everyone: Methodology, Conclusion, Bibliography

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