Posted By: Pat Nelson / Jun 13 2016
For decades, owning a home has been a key component of the American dream. However, millennials are all about disrupting trends, and housing has been no exception. Millennials have chosen to rent longer than their Generation X or Baby Boomer counterparts for many reasons—such as high student debt, an emphasis on flexibility, and a penchant for convenience. These unique reasons have made millennials a different type of renter and a market you should definitely not ignore.
Convenience over space
Millennials have largely embraced a more minimalistic lifestyle. This means that large houses with big yards are less desirable than a smaller home in a better location with less maintenance. Millennials want to be a part of the action and not have long commutes to work or good hangout spots on the weekend.
Convenience also means not having to worry about yard work or other maintenance tasks. Younger renters value landlords who are proactive and responsive to maintenance requests, so don’t delay fixing a leaky pipe or broken appliance!
Flexibility over putting down roots
Millennials change jobs on average every four to five years. This means that a home in the suburbs may become a burden and completely dependent on the swings of the market. Even though rent prices may rise in the short term, at least they won’t be stuck with a large mortgage and negative equity if home prices fall.
Additionally, renting in a few different locations allows millennials to try out a neighborhood without committing long term. Bad neighbors or an awful commute are easily dropped for greener pastures.
Digital payments over a check
Many millennials can’t remember the last time they had to write a check. Instead, they’ll turn to digital payments such as online bill pay, PayPal, Venmo, or any number of online payment options instead.
However, embracing online payments is a boon to landlords as well. You’ll receive your payments automatically in most cases and you can skip the trip to the bank. Sidenote: millennials don’t just use their phones to make payments, they also prefer text messages to phone calls. So, keep your smartphone handy.
Financial freedom over debt
Millennials coming out of college have an average of $28,000 or more in student loans, more so than any other generation. That, coupled with lower wages, means that millennials just simply do not have the savings for a down payment or the desire to take on additional debt.
In large urban areas, the price of rent as well as high home prices mean it’s just not feasible to save up for a down payment. And it’s not just the mortgage payment that must be considered, it’s also the insurance, utilities, and other payments that go along with a home. If conditions aren’t right and there is instability in a relationship, job, or other big life event, millennials are likely to take less risk on a home purchase.
In years past, taking a chance on a young couple or single young adult was a risky move. However, millennials are becoming a more attractive demographic and a market that, as a landlord, you shouldn’t ignore. Understanding what millennials value—convenience, flexibility, online payment options, and debt management—is key to making your renting relationship a good one for both parties.