A few years back, before the beginning of the COVID-19 pandemic, I wrote an article that discussed prioritizing demands over needs during economic turmoil.
Maslow’s hierarchical hierarchy indicates that the basic requirements are physiological and essential to life. They include food, health, water, and shelter. However, desires are not essentials, such as clothes, entertainment, travel, and food that is gourmet.
The historical data suggests that most people are aware of the distinction between desires and needs. The majority of people are smart about their money in times of uncertainty in the market.
Particularly, the study revealed that families and individuals consume more meals at home, and delay major purchases to make mortgage or rent payments.
With Canada experiencing an affordable housing crisis I decided to re-examine the issue of needs, wants, and outcomes in housing.
As as a researcher in economics and business I had a desire to investigate the consumption habits of renters during the economic downturn of excessive interest rates, staggering inflation and volatile financial markets.
Property managers and renters share the responsibility in the midst of a financial crisis. Renters have to make wise decision-making decisions regarding their spending and do what they are able to do in order to afford rent. In the same way property managers must concentrate on understanding the needs of occupants so that they can meet their needs.
A new study examines the relationship between landlords and tenants
Along with me and my coauthors Gabriel Millard and Cameron Hills, the chief executives for the one of Canada’s biggest property owners-operators, Avenue Living, we looked at the habits of spending of renters as well as the strategies used to rent property managers across Canada, the United States, the United Kingdom and Canada.
Our study, which was published in the journal of real estate economics, Property Management included a multinational study of 1,251 tenants. Our results revealed that renters had a good time prioritizing their desires over needs, however the majority of them were struggling financially.
As per the Canada Mortgage and Housing Corporation Housing is considered affordable in the event that it costs not more than thirty% of the household’s pre-tax earnings. More than half of respondents to the survey across a variety of properties stated that they rented out unaffordable housing.
The same renters made conscious choices to cut back on spending in nearly every other cost segment, including entertainment, transportation, food and even clothing. Even though they were making good choices in their finances however, a lot of them were struggling with the issue of affordability. This is a major issue.
Property managers are crucial.
Our study revealed that renters had already done their part to combat the increasing price of life by prioritizing necessities over their wants. But despite all their efforts, the affordability of housing was still out of their control. Property managers step inthey have to do their part in addressing the issue of affordability.
Our study makes a compelling argument that property managers should strive to be responsive to their tenants’ needs. We found that the most customer-focused property managers -those who listened to their tenants’ needs – those who tried to comprehend the demands for their tenant and then acted in accordance with their tenants’ needs -had a higher success rate than those who did not.
Property managers who made an effort to accommodate renters by offering alternative dates for rent payments or integrated services, as well as the commitment to providing safe accommodation for example — had higher-quality tenants. Tenants who were loyal to their landlords had more to their landlords, greater trust, increased confidence in their rental properties and a stronger commitment to pay rent in time.
Simply simply put, property managers that were truly concerned about the needs of their tenants resulted in more satisfied tenants.
The results of a new research study have revealed that landlords who strive to be aware of the requirements of their tenants have more success than landlords who did not. (Shutterstock)
The road ahead
For a lot of Canadians many Canadians, the desire to own a home is a distant dream. Prices for homes remain extremely high and current interest rates have made the monthly mortgage payments significantly more as higher requirements for credit scores make it harder to get loans for new homes and rising inflation has a negative impact on everyone’s buying capacity.
In the end, there is an increase in demand for rental homes in Canada and especially low-cost rental prices. To enable Canada to get over the affordability of housing individuals, families and the real estate industry and the government must collaborate.
Property managers and renters should each play their role. Renters must continue to put the needs of their tenants over what they want, and property managers must try to create excellent tenants by being a customer-oriented. Tenants who are good tenants include those that are trustworthy, loyal and committed.
The real estate industry should also be investing in affordable housing initiatives as well as the rental stock that is already in place. There is a a significant and ongoing demand for rental housing across Canada. The Canadian population is price-sensitive and are always looking for cheap alternatives. The market must reflect this by creating homes that are more cost-effective.