Millennials are currently the largest living generation, but only 34 percent of them in America own a home. Millennials don’t want to be tied down to a mortgage, because they are finishing college, chasing career opportunities, or they just want more freedom to be able to travel whenever they want. So, they’re renting instead of buying. Millennials were raised in the cell phone generation, so when they want something, they want it now, and they want it fast. Most are not married or choosing to postpone marriage until later in life.
Pew Research shows that “Millennial households dominate the ranks of the nation’s renters. Last year, Millennials headed 18.4 million of the estimated 45.9 million households that rent their home.”
If you go back about 40 years, most young people under 35 were anxious to get married, buy a home, and start a family right away. In fact, Pew Research found that in 1982, 41% of households were owned by adults younger than 35 years old. Over the years, those numbers have consistently gone down, and now it’s more common for adults under 35 (the millennial generation) to rent instead of own a home. If you’re one of the many property managers in Dallas, you should be aware of this large pool of renters as you market your rental home. Focusing on making your property attractive to the millennial generation can not only keep you ahead of the game, but it can also increase your profits.
Why Millennials Put Off Home Ownership
Although some Millennials may still hope to own their own home “someday,” difficult borrowing standards can make this seem like an impossible dream. Renting a single-family home instead of buying can allow Millennials to enjoy the same type of lifestyle without all the regulations and red tape.
Many Millennials underestimate the hidden costs associated with buying and owning a home and the money they will have to put into it throughout the years to maintain it properly. It’s not as easy as just comparing your rent payment with a potential mortgage payment.
“Do a full check of all finances,” says Daryl Fairweather, chief economist at real estate site Redfin. “A lot of hidden fees come with owning a home that you might not consider immediately.” That includes the insurance, property taxes and closing costs — which can be 2 to 5 percent of the home price.” – from CNBC.com
Some Millennials are afraid their credit scores are too low for homeownership, and others have so much student loan debt they don’t know where to start. In a recent survey by the financial website Sofi, “61% of millennials said they’ve delayed buying a home because of their student loan debt”. This same survey found that 35% of millennials consider paying off their student loan debt as the biggest milestone they can achieve, followed by only 25% who feel that buying a home is the most important. Property managers in Dallas should note that buying a home is just not a major priority among Millennials in general.
Other Millennials have gotten so used to the renters’ lifestyle, that they don’t want to be tied down to a home purchase. This market segment may not be saddled by large amounts of student loan debt, or even credit card debt, they simply don’t see themselves tied down to a home for a lengthy period of time. Renting is one of many real estate rental trends that gives Millennials the freedom and mobility to move whenever they want without being tied down to a home mortgage.
What Millennials Want Out of their Rental Home
When Millennials start looking for places to rent, they’re going to ask themselves a few questions. This shows where their priorities lie.
- How close is the single-family rental home or apartment unit to my job?
- What is the Wi-Fi like? Is it fast enough to accommodate the days I have to work from home?
- Does the complex or home have a pool, work out gym, or dog park nearby where I can meet people? (About 76% of Millennials own pets, so a dog park is a huge perk)
- How safe is the rental home or apartment? Are break-ins common?
- Can I cook in the kitchen? What kinds of upgrades does it have?
Though a lot of these questions may seem extraneous or not pertinent to renting out a home, these types of inquiries may make or break a Millennial’s decision to rent from you. Also when looking at different homes managed by various rental property management companies, Dallas Millennials will Google reviews or ask around to find out what kind of customer service they can expect. Property managers in Dallas should make sure their online reviews or references are positive overall to attract Millennials.
The Importance of Using Technology
Some landlords or Dallas residential property management companies might think they can get away with just sticking a “For Rent” sign in the yard to attract tenants to their homes. In this day and age, you’ll be waiting a long time if that’s all the advertising you want to do. Smart landlords know that millennials are a technology-driven generation. You’ve got to have significant online marketing that can easily be viewed on a cell phone. It’s helpful to have a video walk-through of your rental home, as well as a bullet point list of the home’s amenities. You should also be sure your rental applications are available in an online format because a lot of millennials don’t own a paper printer. Rent payments should be collected via an online system, as checkbooks are pretty much obsolete with Millennials, too.
Long-Term Tenants for Property Managers in Dallas
Just because a Millennial decides to rent doesn’t mean they won’t stay for long. Some Millennials end up staying in their rental properties long-term because they don’t want to go through the hassle of moving and they like where they are.
“. . . remember that millennials are longer-term tenants who expect their apartments to offer all the comforts of home (if not more).” – from Forbes.com
Which Amenities Millennials Prioritize
J Turner Research surveyed Millennials to find out their preferences in a rental, and found that 79% of Millennials want amenities like a washer/dryer included in the unit or home. About 54% wanted extended cable/Wi-Fi included, and parking included with rent was also important with 42% of millennials wanting this feature. Millennials also look at the location and quality of the home and the overall rent per month. As most Millennials work full time, overall commute time to work is incredibly important to them.
Luxury amenities such as an on-site gym, ample parking spaces (covered most desirable), and access to a pool are not considered deal breakers, but certainly could help a millennial be attracted to the property.
With Millennial renters representing a huge portion of the rental market, property managers in Dallas would do well to give in to their demands and feature items they are looking for. While you may not be able to install a pool or have access to a gym, there are a few simple demands that are easy to offer, including making the property Wi-Fi friendly, updating the appliance and kitchen counters or updating the flooring and lighting fixtures. While this does not need to happen all at once, these small changes are attractive to new renters.
What About the Other Pool of Renters?
You might think that by trying to get business from Millennials, you’re neglecting the other potential tenants out there. This is not the case. Having amenities, upgrades, great Wi-Fi, and online systems for most everything is a great way to attract people of all ages. Money magazine reported that “[j]ust 15% of Millennials’ bills are paid by mail; for seniors, that figure is 40%, according to the report. Millennials pay 61% of their bills online while seniors pay 42% of their bills online.”
What does this mean for property managers in Dallas? Although some people older than Millennials pay bills using alternative methods, the popularity of paying bills online is continuing to increase. Older potential residents are becoming just as tech-savvy and would appreciate working Wi-Fi and upgraded amenities just as much as Millennials.
Why You Should Market to Millennials
Real estate rental trends show that those of the millennial generation are now waiting to get married in their 30s instead of their 20s. Most have reached the age where they want the family lifestyle and atmosphere that a home brings, along with a family-friendly neighborhood. So they’re leaving their tiny, cramped apartments behind and renting out single-family rentals just like yours! They can enjoy more space and the benefits of a yard without being tied down to a hefty mortgage payment every month.
Put more money in your wallet and free up your spare time by purchasing a single-family home for those Millennials to rent. Take it from the experts at Specialized Property Management Dallas. We’ve been in the Dallas property management business for over 25 years, and we know this trend is good news for you as the landlord. Put us to work for you, and we’ll handle the day-to-day operations of your rental home while you reap the benefits.
Make Dallas property management easier for you. Put our team, experience, and ethics to work for you. Contact your Specialized Property Management Dallas team today at 214-233-7572!