- Millennials are currently the largest generational group in the United States, and with such a high percentage of them renting, they’re naturally changing the rental market landscape.
- A flexible lifestyle has long appealed to Millennials. And since the COVID pandemic, flexible spaces that allow for living and working have increased in popularity.
- Millennials are tech-forward, which shows in their preferences for online rental searches and digital communications with property owners and managers.
Millennials have been dubbed the “Generation of Renters.” And for good reason. Millennials rent everything from furniture to gaming consoles to clothing. This “Generation of Renters” has the power to reshape the rental market to meet their needs better. And the changes are already underway. Let’s look at five ways millennials are changing the rental market (and what property owners can do about it).
Millennials and renting
Whether multi-family apartments or single-family homes, more millennials are renting than buying. Around 52.1% of Millennials were renters in 2020.
Contrary to popular belief, most Millennials actually do want to own their homes. But with a lack of affordable housing, crippling student debt, and ongoing fallout from the Great Recession that hit during Millennials’ early career years, homeownership is less attainable for Millennials than for previous generations.
Sadly, nearly one in five Millennials in 2021 reported giving up on the idea of homeownership.
Previously, the rental market was largely comprised of the youngest generation of adults plus people in transit. But today, we have a large group of stable adults in their 30s who are renting.
Here’s how this generation is changing the rental market.
As of 2022, even when older Millennials are in their early 40s, only 48.6% of Millennials are homeowners. To give this some historical context, consider the ownership rates of recent generations at a set age:
- 51% of boomers owned homes at 30 years old.
- 48% of Gen Xers owned at 30.
- Only 42% of Millennials owned at 30.
What this means for property owners is that you’re not dealing with 20-somethings who are new to the adult world. You’re dealing instead with experienced, often highly-educated adults who expect more from their living spaces.
Millennial renters expect quick responses to maintenance requests and quick permanent solutions to any issues with the residence. And while Millennials are putting off getting married and having children until later than previous generations, they might also be raising their family in a rental. So the demand for single-family rentals is high.
The good news for property owners is that Millennials are willing and able to pay more for suitable living spaces than 20-somethings. You can profit by giving them the upgraded living spaces and prompt service they expect.
2. Searching for housing online
Even pre-pandemic, 90% of Millennial renters used online resources to find their rentals. While we’re not yet far enough out of the pandemic in 2022 to establish a post-pandemic rate, you can bet it’s near 100% for this tech-savvy generation, forced to rely on tech even more in the social-distance days of COVID.
Millennials expect to see professional listing photos, virtual tours, and property details online. If you’re not taking advantage of online platforms to market your income properties, you’re missing out on nearly the entire market of Millennial renters. Renters may hear about a residence from a friend or neighbor, but that’s just not a chance today’s property owners can take.
3. Prioritizing flexibility
Affordability may be the primary reason Millennials are renting, but it’s followed closely by flexibility.
The days of working for a single company your entire adult life and receiving a swanky retirement gift from your employer on your way out are long gone. Millennials change jobs multiple times in their careers, more than any other generation. So they appreciate being able to give a 30-day notice to the property owner and move on to their next place without the hassle of selling a home.
Millennials also appreciate the flexibility renting gives to try out new neighborhoods before committing. Those who can work remotely can even make their home practically anywhere they’d like. And renting allows them to see whether their chosen location would be a good fit for the long term.
4. Looking for IoT
Millennials control their surroundings through their phones. They start their car, change the room temperature, and answer their door all from their smartphones. The Internet of Things (IoT) is the connection between items and systems to make our lives easier and safer.
WiFi-enabled security systems can alert you to a potential security issue, even when you’re not home. And IoT-assisted cooling systems can save money by allowing you to leave your AC off while you’re away, then turn it on remotely once you’re headed home.
These conveniences are in high demand by both Millennials and the upcoming Gen Z. Upgrading your units to include IoT features will set your residences apart from the competition.
5. Expecting prompt digital communication
Your Millennial renters are unlikely to call in a service request or telephone you about their lease renewal. They might email you instead. Or, even more likely, they’ll text you. And they’ll expect a quick reply.
This is difficult for many property owners who have more than one income property. You simply can’t be available around the clock to reply to your renters. That can lead to disgruntled renters leaving negative reviews on online review platforms, which can greatly impact your ability to attract future renters.
Consider investing in a property management company that offers 24/7 support to your renters. Better yet, choose a property manager who won’t charge you a mark-up on any maintenance requests placed by your tenants.
Millennials are changing the way we rent. The property owners who can adapt to the changing rental market will attract more qualified renters, earn more rental income, and expand their rental portfolio. Leveraging a tech-enabled property manager allows property owners to meet the high demands of Millennial renters without spending time and energy doing so.