According to a Pew Research Center article from March 2018, “Millennials, whom we define as ages 20 to 35 in 2016, numbered 71 million, and Boomers (ages 52 to 70) numbered 74 million. Millennials are expected to overtake Boomers in population in 2019.” Considering that Millennials are poised to take over as the largest section of the population in the near future, it’s important for rental property management professionals to closely monitor Millennial housing trends.
With this in mind, here are a few housing trends among Millennial renters and buyers that single and multi-family property managers should know about:
Millennial Housing Trend 1: Millennials Are Buying More Homes, But Still Behind Previous Generations
One recent housing trend among Millennials is that they are starting to buy more homes than in previous years. In one November 2018 article by REALTOR Magazine, it is stated that: “More millennials are pursuing homeownership than ever before. The national homeownership rate rose to 64.4 percent in the third quarter this year.”
However, as noted by a Bankrate article from September 2018, "Millennials’ rate of homeownership was about 8 percentage points lower than Gen Xers and baby boomers at the same age.” The Bankrate article went on to highlight several barriers to homeownership amongst Millennials, including: “delayed marriage, student debt, and choosing to live in high-cost cities” as well as “coming up with a downpayment and maintenance costs.”
Also, as noted in the REALTOR Magazine article: “Just last week, mortgage rates rose to a seven-year high, with 30-year fixed-rate mortgages averaging 4.94 percent. It’s more than likely that rates will climb over 5 percent in the new year.” While 4.94% interest doesn’t sound like a lot compared to something like credit card debt, where interest rates range from 17.99% to 33% APR, it still has a massive long-term impact on the cost of buying a home for Millennials who are already burdened with large student loan debts.
So while there are more Millennial buyers on the market than in previous years, they aren’t at the same level as previous generations of home buyers.
Why is this important for rental property management?
Because it’s a strong indicator that Millennials will continue to seek to rent—and more Millennial renters mean more opportunities for rental property managers that cater to the needs of the Millennial generation.
Millennial Housing Trend 2: Millennial Housing Preferences
So, what are Millennials looking for in a home? A few key Millennial housing preferences were highlighted in a recent MarketWatch report. According to the report, the list of Millennial renters’ preferences includes:
- Bigger homes;
- Walk-in showers; and
- Technology upgrades (such as smart home devices).
Oddly enough, according to MarketWatch: “When it comes to preferences in housing, there isn’t much of a difference between what millennials and boomers want.” The only major point of difference between the two groups noted in the article was in home size, as Boomers “tend to downsize to smaller houses that require less maintenance” while Millennials are “looking for bigger homes.”
The reason cited was that Millennials “want to start a family and need to accommodate their children.”
Why is this important for rental property management?
Knowing what Millennial renters are looking for in a home can help rental property managers renovate their properties to better match what is being demanded. For example, renovating a property to add extra rooms for children or to integrate new “smart home” technology upgrades can help make the property more appealing to Millennial renters.
Of course, it’s important to check your local market’s demographics and see what’s selling or being rented before committing to a major renovation/upgrade. After all, just because most Millennials want a specific type of home doesn’t necessarily mean that the ones in your area are looking for the same thing.
Millennial Housing Trend 3: Millennial Buyers and Renters Are Finding Homes Through Their Smartphones
In an Inc.com article about how Millennials are changing the housing market, it was noted that 58% of Millennials had found their home on mobile devices. Meanwhile, 46% of Gen Xers and 33% of “Younger Boomers” (ages 52-61) found their homes on a mobile device.
Why is this important for rental property management?
While Millennials are known to be tech-savvy, having grown up with the internet, this data point reinforces how important it is for rental property management companies to advertise their available properties online. Moreover, it shows how important it is to make rental property listing pages mobile-friendly or to even post listings in a mobile device app.
Millennial Housing Trend 4: Millennial Renters Want Well-Maintained Spaces
While not unique to Millennials, property maintenance remains a key issue for retaining Millennial tenants. Specifically, Millennial renters tend to look for the following in their rental property maintenance:
- Speedy response—in the same day, if not the same hour;
- Affordability—they don’t want to be overcharged for parts or labor; and
- Quality of work—Millennials need to be able to trust that repairs will hold.
The question is: “How can rental property managers ensure fast, affordable, and high-quality property maintenance when Millennial renters need it?”
One method is to use an end-to-end property maintenance solution such as Homee On Demand. This property maintenance solution makes it easy for renters to place work orders and for property managers to supply fully-vetted, qualified property maintenance experts.
Instead of having to pour through local listings for experts and trying to check their qualifications, the Homee On Demand property maintenance solution gives property managers instant access to thousands of qualified experts in handyman, electric, heating, ventilation, and air conditioning (HVAC), and plumbing services—all of whom have undergone a comprehensive background check including financial and criminal histories and license verification.
Once a work order is placed and approved by the property manager, a Homee will typically arrive within 30 minutes to begin work. Each Homee’s time at the worksite is tracked down to the minute so property managers aren’t charged for an extra hour if the job takes one hour and five minutes to finish. This helps to minimize costs and delays in property maintenance work—making for happier renters.
Are you ready to meet the demands of Millennial renters? Talk to a member of the HOMEE team today to discuss your needs and how our property maintenance solution can help!
