"When we started this current economic cycle, 63% to 64% of Americans owned their own homes. Now we are at 68%. The president and every one else wants to see that number get to 70%," Holtzman says. "Well, that still leaves 30% of almost 300 million people in this country who are in the rental market."
Village Green, a Farmington Hills, MI-based company started by Holtzman's grandfather in 1919, is using its "Village Park" brand communities to target young, first time renters. Under the concept, Village Green buys older complexes, renovates the facilities, builds a new clubhouse and is able to raise rental rates $100 to $200 per unit--more than what a 30-ish-year old complex normally rents for, but less than what a new complex demands.
"We've found very good success with this segment," says Holtzman. Village Green is working on its 28th "Village Park," a 368-unit development that straddles the border of Shelby Township and Rochester Hill. There, a renovated two-bedroom unit goes for about $850 per month.
"We think the economy will improve over 2003, how much, we don't know yet. But we think young people who have been staying at home or who have been doubling up with a friend will be moving into their own apartment in greater numbers," he notes. "Therefore, I think some of the levels of free rent promotions will be reduced in 2004 from 2003.
"The renter is becoming much more intelligent," adds Holtzman. "They have so much information available from the Internet and other sources, they know what everyone's special is. That's why we think our renter's equity program is so attractive. That has more value than a free month up front."
He says his company rents as many as 25% of its apartments via the Internet. "It has become a very significant part of our business.
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