This guide outlines how millennials are changing the property market and how investors and agents can meet the challenges.
It’s no surprise that millennials are sweeping the scene in most industries and make up the largest generational group in the industry. With the youngest in their early twenties and the oldest pushing forties, many millennials are moving out of their parents’ houses to become first-time renters or saving for a down payment for their first home.
But are these numbers sufficient enough to impact the industry? Whether you’re an investor in this age group or not, understanding how they affect the market could help you make more money in real estate. So stick around as we answer the burning question, ‘are millennials changing the rental market?’ We’ll also highlight the hidden costs of homeownership and the top rental home features that appeal to the generation in question.
There’s some disparity on whether or not millennials want to own homes in the future, but they are certainly storming the rental market. Despite getting caught in the rubble of the great depression, many adults in this age group can still purchase a house, especially those who have paid off their student loans. However, while most millennials might be leaning towards renting, it doesn’t mean they’re settling for less and are increasingly demanding more perks and amenities than previous generations.
How millennials are changing the property market
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Spike in Online Searches
One of the most notable ways Gen Y is changing the property market is with a spike in online home searches. Traditional media might still be alive, but more people are likely to turn to Google than their local newspaper when looking for vacancies. As a result, property owners need to have listings on Zillow, Realtor, Trulia, or any popular house-hunting sites to earn valuable leads. Further, if you want to grab attention, you must intrigue them with high-definition images and 3D virtual tours that capture interest and increase tenant applications.
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Preference for Flexibility
While the price might be one of the top considerations for millennials during a property market search, flexibility is a close second. Since 2020, more companies have taken up a remote or hybrid work mode. As a result, commute time and ease are less of a factor while house hunting and millennials are free to buy into or rent homes that are more comfortable and suit their tastes, even if they’re on the outskirts of town or in the suburbs.
Moreso, millennials are less likely to remain in the same job for multiple years like the previous generation. Thus, they like landlords with more flexible leases that allow them to pack up and move at a moment’s notice. Hence, to keep your tenants, consider asking a reliable property management company about smart home upgrades that add value to your rental investment.
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Increased Demand for Housing
Despite the income-to-expenses ratio dipping over the last few decades, Gen Y still has a rising demand for housing and makes up the most significant percentage of home buyers and renters. Moreover, this trend has steadily increased since the pandemic and shows no signs of slowing down as more millennials gain more financial security and grow in their careers.
The advent of technology also makes it easier to purchase a house or sign a lease without ever seeing it physically. While it might not be the ideal way, millennials are more willing to participate in an auction or pay rent sight unseen due to a competitive market.
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Emphasis on Digital Communication
Thanks to millennials, there’s a growing emphasis on digital communication in the property market. Texts, emails, and property management sites are quickly replacing calls or letters as the preferred mode of communication. In addition, many millennials prefer flexibility and ease, reserving phone calls for only urgencies.
Consequently, landlords and agents are getting on board to establish contact, schedule home viewings, and answer questions. While you might not be available throughout the day, Gen Y members would certainly expect prompt replies and would most likely move on to the next property if your responses are too slow.
As we delve into the changing paradigms brought on by Millennials, it’s impossible to overlook their relationship with financial technology. This digitally savvy generation is increasingly inclined to automate their lives, right down to monthly bills and rent. Recognizing this, property managers and landlords should consider offering the option to pay rent via credit card, a payment method that offers convenience and rewards points, aligning well with the Millennial mindset. As credit cards often come with perks such as cash back or travel rewards, this would provide added value to the tenant, fostering loyalty and long-term rental agreements.
Top 3 property market features millennials want
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Smart Locks
An excellent smart home upgrade that attracts tenants is a smart door lock. These safety features improve your home’s security and convenience by swapping a key for a code. In addition, this system allows authorized users to remotely control the lock, change the password, or provide temporary access to guests and maintenance specialists.
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Home Security
In addition to a smart lock, you can get a complete home security system with sensors and cameras to protect residents. Having that extra layer of safety can act as a deterrent to burglars and give prospective tenants more peace of mind. It could also reduce your home insurance premium, saving you money in the long run.
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Automatic Lighting
Automatic or smart lighting is another rental trend every homeowner should jump on. Automating something as basic as lighting might seem unnecessary, but it adds a world of convenience when your bulbs respond as soon as you get home. Besides avoiding stumbling in the dark for a light switch, it also reduces energy bills.
Conclusion
In summary, millennials are becoming a massive chunk of the property market, so their needs will inevitably shape the industry. In addition, the spike in online searches, emphasis on digital communication, and increased demand for housing create opportunities savvy investors can leverage for more profit.
However, if you’re planning to enter the market as a first-time investor, you should be aware of hidden fees that could cut your profit. Considering factors like insurance, HOA fees, and landscaping will help you set a better price tag for your rent. Also, remember to invest in home features. For example, millennials want better home security to attract new tenants and retain them. If you need an expert to see you through, consult a professional property management company for the best advice and rental services.
