Larry Arth blog
Talking with my daughter, who is a Millennial, has provided important insight to me as I have studied this group and its rental and housing needs and written about that for other investors.
It has been almost a psychological journey into my daughter’s era, shedding light on many past conversations with her and her friends, about their lifestyle habits.
At the time those conversations were hard to understand and relate back to my real estate business. But now, I understand the necessity of understanding their perspectives for both my real estate clients and Millennials as my base of tenants, so I set out to learn even more. I found supporting articles and surveys echoing the same responses I received in my personal conversations with my daughter and her friends. I found 3 basic topics:
Who are the Millennials?
What do they want within housing?
How do we as landlords attract them to our rental units?
It is no mystery that the real estate world has taken notice and is in a tug of war for the attention and housing dollars of the Millennials, an estimated 80 million people born between 1980 and 2000.
This is why the real estate industry has been studying the behavior and lifestyle choices of the millennials.
There are thousands of articles and books (such as Millennials Rising) written about this highly sought after group of people. Understanding such a large group of people and what they want within housing is key to fulfilling their housing needs.
All this attention has indeed captured my interest to learn what it is you can do to get a piece of this rapidly growing rental base.
Let’s take a peek at who are Millennials
- 80 million or about 25% of the population.
- The largest growing segment of new households. Last year alone generated over two million new households that joined the rental community.
- Self-employed: 35% of Millennials have started their own small business.
- Mobility is important and they prefer not to be tied down to obligations like mortgages.
- Gadgets and latest amenities are the top of their hot button list.
- They have good salaries ( a growing occupation base) and believe in global opportunities.
- Delayed marriages. They are not in a hurry to get married and start a family so smaller housing and renting is perfect for them.
- 44% believe marriages is becoming obsolete.
- 34% of women in the group have a bachelor’s degree
What do Millennials look for in housing?
- They prefer to live near employment and activities. One large reason they finally moved out from the parents’ home is to cut the time or expense of commuting.
- They grew up with gadgets so they seek out the latest amenities. They can afford them and are willing to pay for them. Even my daughter, during a recent move, inquired as to whether the apartment’s floor plan was open enough to allow for a good wi-fi signal.
- Social space is important, and so is a single-family home or an apartment that offers community space for entertaining guests.
- Safety and security such as double locks on doors. Plus, they like apartments in a gated community. (This gated community requirement was a hot button for my daughter and the deciding factor that prompted her to rent.)
- Nice kitchens are important. This group tends to eat out less and dine in more, so nice kitchens with nice amenities are a requirement.
Attracting and renting to the Millennials
They do everything using their mobile devices so have an online web presence that is optimized for mobile.
• They are a resourceful group with technology always in their hands and will compare the value of your rental to others. So do your research and market your property as good value.
• Applications online: They will look for advertised units online. They will click the hyperlinked phone number to call you for more details and then fill out applications on the go.
• Payment options should also be (you guessed it) online. They do not write checks. They pay with mobile devices. If you offer the option of setting up automatic withdrawals it is easy for them and, as you know, perfect for you.
• 76% of Millennials have pets so creating a pet-friendly environment will win this crowd.
• Surveys have shown that their number one priority is safety. So promote all safety features to them as well as perhaps the safety of the area.
Winning over the growing tenant base
If there was ever a perfect storm that makes up a great tenant base, it would be the Millennials.
This group was often nicknamed the “basements kids” because many lived in their parent’s basements or spare rooms during the last decade to save on expenses during the economic bust.
Today, they are well-paid professionals who prefer renting to owning, making them a landlord’s new best friend. To attract the Millennials you want to promote your units (remember to use mobile) to them highlighting how your unit will benefit them based on the above list of interests.
They were raised being constantly told by their parents that they were special. This was not the time where trophies were issued to the winners; they were all winners. They grew up in a time when they received awards simply for showing up and participating. Large firms even hire consultants to learn how to properly communicate with a generation who only take yes for an answer.
The Millennials truly have the edge. They are very powerful in sheer numbers; they are very tech savvy and are always multi-tasking. Many of them work very hard and use a variety of tech tools to get their work done. This generates great jobs with great salaries and endless opportunities for this clever group that is very resourceful.
While the real estate and mortgage industries are promoting “now is the time to buy” campaigns, the Millennials are confused by the magnitude of qualifications it takes to get a loan. As a result many do not even make the attempt to get a loan, as they do not believe they will qualify.
Additionally they are saddled with student loans further complicating issues such as down payment requirements.
With their love for mobility, and the fact they are delaying marriages and families, many will be perfectly happy being your tenant.
Visit Larry’s site here
[hs_form id=”4″]
0 Comments