According to Pew Research, there were 59.7 million multigenerational homes across the country in 2021. That number quadrupled since their last review in 1971, and it’s almost certainly increased in the last couple of years.

The pandemic, the high cost of homeownership, rising rental rates, and an uncertain economy are all factors that contribute to the growth in multigenerational housing. In San Mateo, real estate investors can use this to their advantage.

Here’s how to capitalize on the trend and prepare for where it’s going next.

San Mateo Rental Market Trends: Multigenerational Housing

A multigenerational household is exactly what its name suggests; there are several generations of a family living together in the same home. You can have two, three, or even four generations living under the same roof, and while it’s never been as common in America as it is in other cultures, the trend is growing, especially in San Mateo and throughout the Bay area peninsula.

Here’s why we’re seeing more living situations like this:

Economic factors. More than half of the people currently living in multigenerational households reported to a nonprofit group called Generations United that they began living with parents, grandparents, or adult children during the COVID-19 pandemic. People lost jobs and had hours cut; there was a lot of uncertainty about where things would land economically. So, moving in with family members made sense.
Rising housing costs. It’s more expensive than ever to find a place to live. Whether people are renting or buying, housing costs over the last few years have reached unprecedented levels. This has been good news for real estate investors; rents are higher and home values have shot up to record levels, too. However, for people who had hoped to buy a home, they’re feeling priced out of the market. Even those who are looking for an affordable rental are finding that these are not easy to locate, and it’s often difficult to qualify for them with salaries that are too low or credit that suffered a few hits during the pandemic.
Changing family dynamics. Family relationships and interactions have also shifted. The rising cost of childcare means that working parents are struggling to find people to care for their children. When they live with grandparents, however, there’s a built-in support system for their kids.

There are many benefits to this type of living situation. Not only is there an opportunity to enjoy closer family relationships, there are fewer costs incurred by just one person.

The expense of maintaining a home is shared, and so are household duties such as cooking and cleaning. Family members who need extra care can easily find it when they live with the people who love them.

How to Leverage Your San Mateo Rental Property to Meet this Demand

Knowing that more and more people are choosing to move into multigenerational family situations, how can you capitalize on this demand?

We provide property management services in the Peninsula, and we have some ideas for you.

Offer properties with flexible living arrangements. As you’re looking for new investment opportunities, think about this trend and what it might mean for your ability to rent out the home that you ultimately invest in. If you want to attract multigenerational tenants, a small studio space is not your best option. Instead, look for investment opportunities that speak to this demographic. That might mean a home with two owner suites instead of one. Maybe you’ll opt to finish a basement in an investment property you buy in order to make it suitable for in-laws or adult children. Look for properties that have garage apartments or guest houses. You might spend a little more at the point of acquisition, but you’ll have a great opportunity when it comes to locating multigenerational tenants and setting a higher rental value.
Create separate living spaces. Think about how you might renovate your current investments to meet this need. People will want a little bit of privacy within their multigenerational homes, so you’ll want to provide that as best you can. If there’s any extra space in your rental property, make the upgrades necessary to make it habitable. You can try to make all of the bedrooms in your property en-suite, allowing for additional bathrooms. You can also create additional entrances, so your tenants feel like they have their own front door when they’re coming in and leaving. Turn extra space into something functional. A den can become an extra bedroom if you do a bit of remodeling. Consider an accessory dwelling if you have the yard space.
Make multigenerational space part of your marketing plans. You know that a large population of potential renters will be multigenerational families. Target those tenants in your marketing and your listing. Advertise your home as being spacious and welcoming to family members. You need to be careful and follow all fair housing guidelines; but you can promote your property as the ideal dwelling for people who are looking for a home that can accommodate several generations. Highlight the number of bedrooms and bathrooms you have, as well as the private finished basement you may be able to offer. Talk about open floor plans and wide hallways if your home has those things. Outdoor living spaces and plenty of parking will also get the attention of multigenerational tenants.

We can help you leverage this trend in the San Mateo rental market to make your property more attractive to these multigenerational tenants. We can also help you strategize about where you might buy your next investment property, and how it may serve the needs of this growing tenant demographic.

We can help with all of your Peninsula property management, leasing, and maintenance needs. Please contact us at Bayside Management. We lease, manage, and maintain investment properties in San Mateo and around the Peninsula, including San Carlos, Redwood City, Pacifica, San Bruno, Half Moon Bay, Daly City, Mountain View, Foster City, and Palo Alto.