Renting homes is here to stay and not just a phase our country is going through. As Millennials enter the job market and become the largest group of people working and producing in America, they will not run their lives the way the Baby Boomers or Gen X did.
They are a completely different group of people with entirely different values. Because their values are so different from previous generations, it will manifest itself most powerfully in their choices on big-ticket items, including where they live. As we continue to see, the current trend is in millennials renting over buying their home.
The housing situation of millennials is trending drastically different from that of their predecessors. Millennials renting their homes is the trend that seems to be sticking.
Despite what previous generations believed, most Millennials do not value owning a home. While they may desire to own a home one day, it is way down on their list of priorities.
But, what are those priorities? Let’s take a look at three reasons Millennials are renting rather than buying a home.
Millennials value their freedom. Generations past used to value a safe, secure job with benefits. A company they could sink their teeth into, spend long hours, buy their time and retire. That is not what the Millennials value. In today’s world, they want to lead the company.
Unlike generations before them, Millennials believe that working for the same place their whole career would be boring and wouldn’t develop them as a person. They understand that their corporate ladder will include multiple cities and multiple companies. In fact, according to Forbes, Millennials change jobs three times more often than any other generation.
Buying a house for them is permanently planting their feet in the city where their current job is located. As you can imagine, this is not a good idea if you consider your next job to be hundreds of miles away. What if they got the “job of their dreams” and they couldn’t move because of the home they own? They may miss the opportunity.
They also value their freedom on their weekends. Owning a home has obligations like cutting grass, fixing the broken door handle, and installing blinds in the third bedroom. All of these are a considerable hindrance to the “on the go” weekends they desire.
Sadly, Millennials aren’t handy. Baby boomers are famous for the idea of being able to fix it themselves. If the dishwasher broke, they fixed it. If the carpet needed cleaning, they cleaned it. They enjoyed doing these tasks on their weekend. That is not the case with Millennials. They don’t care to understand how to fix something.
Renting for them allows them to have a full-time handyman service at their fingertips. Something breaks, they call on the way to work or submit an online work order, and it is fixed by the time they arrive home. Again, they get to protect their weekends this way.
Another reason Millennials are opting to rent is that their parents were foreclosed on The American Dream. Millennials don’t see owning a home as the American dream anymore. Too many saw their parents get foreclosed on, and it became a family nightmare. They swore that would never happen to them.
Instead of pursuing the traditional American Dream, Millennials believe that their wealth will be in their savings account and, most importantly to them, the experiences they gain while living. As such, the short-term costs of renting are far easier to bear than those that come with purchasing a home.
Since Millennials are here to stay, what does it mean for the world of renting?
Indeed, it is great for the apartment industry. Single people rent apartments, and Millennials certainly qualify. Given the average age, people get married, pushing further and further back.
But, what about the Millennials with families? People with significant others don’t lease apartments for very long. Millennials will be the fuel that grows rental housing for the next decade when they start to have kids: more Millennials, more rentals.
Since we will be leasing to more Millennials and their values are so different, this will require a different type of rental home that meets Millennials’ needs and values. Here are just a few ideas:
Going back to Millennials valuing the freedom of their weekends, consider adding in weekly landscaping. After all, who doesn’t like to come home to a manicured lawn?
Don’t forget; Millennials grew up in the Age of the Internet, which means they are used to having instant gratification with nearly everything. This concept also applies to their housing situations. There will be an expectation of a faster turnaround on work orders that are submitted. Go above and beyond by offering real-time updates on where the work order is in the process of being completed.
Again with the Age of the Internet, Millennials do everything online. Make sure that you have online payment features available for your rentals.
When your tenants are gone for three weeks, who is going to ride by the house? Maybe you could offer to home sit for them.
Schedule monthly house tune-ups to stay on top of minor repairs. Consider things like replacing the filters, changing the light bulbs, or checking the smoke detector batteries.
As the housing market shifts with the different generations, it’s essential to follow the trends. Currently, Millennials renting over buying continues to be the trend for a multitude of reasons, including their love for freedom, their lack of handy skills, and the shift in the American Dream.
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