Amid runaway interest rates and housing costs, more family members than ever are living together to withstand the current economic climate.
Multigenerational households have quadrupled since 1971 and now represent 18% of the US population, according to Pew Research Center survey data.
Part of this growth comes from Millennials and Gen Z moving back in with their parents during the pandemic – 67% of those ‘boomerang children’ are still there. The majority of survey respondents aged 25 and older cited financial issues as a significant reason for living with their parents or grandparents.
This is followed by caregiving, which reflects the overwhelming preference of today’s seniors to age in place close to their families.
Get in on the ground floor
The growth of multigenerational households could make certain types of property into more attractive investments.
Boomerang children who want more privacy than their childhood bedroom provides might prefer to live in accessory dwelling units (ADUs) with their own separate entrance, like a converted garage or basement.
Seniors with reduced mobility or poorer health may benefit from a mother/daughter home, also called a “multigenerational home”, because of the quick and easy access of a shared entrance between the main home and the attached suite.
Although duplexes classify as multi-family properties, they can accommodate a single family if they rent both sides. And families living in such close proximity will often save money by sharing expenses, helping them pay rent more reliably.
It might be worth investing in several property types across the single-family rental market to cover all your bases – especially as the growth of triple-income households could make it viable to charge higher rents.
How to adapt
In each of these situations, PropTech can help property managers handle the difficulties that multiple tenancies in single-family rentals present.
Each household has their own opinion on how much an adult living with a parent should contribute toward the rent. Regardless, automated payment rules will simplify even complex payments.
Thanks to PayProp’s split payment functionality, each tenant can automatically receive a separate rent invoice. For example, if a property manager wants to achieve a yield of $2,000 per month on a mother/daughter house or ADU property, he or she is able to split the rent $1,400 for the bigger primary home and $600 for the smaller unit.
Their payments can then be allocated based on powerful and flexible rules that you set at the beginning of tenancy – and if someone doesn’t come up with their share of the rent, you can send automated reminders to them directly instead of going through a primary tenant.
If you’d like to experience PayProp’s powerful payment automation for yourself, book your free demo today.