If you want to attract millennials to your home flip or rental property investment, it’s a good idea to understand where this generation prefers to live and what they value in a neighborhood and in a home. While each renter or homebuyer is unique, housing experts have parsed renting and homebuying data to get insight into generational trends. The National Association of Realtors produces an annual generational trends report. For the first time, NAR split this massive demographic into older millennials (29-38) and younger millennials (21-28).
Released in April, the report shows millennials accounted for 37% of all homebuyers, the most active generation of buyers for the sixth-straight year. However, it should be noted that the majority of U.S. households headed by millennials are renters, according to the St. Louis Federal Reserve. Its data shows that 77 percent of households under age 25 are renting, 67.1% of households between 25-29 are renting, and 50.7% of households 30-34 are renting. That changes for the 35-39 group. Of this oldest group, 41.1% are renters. Here are a few things for you to consider if you want to attract a millennial to your rental or flip:
- Affordability is important.Younger millennials have a median household income of $71,200 and are purchasing the least expensive and smallest homes ($177,000 and about 1,600 square feet). Finding affordable inventory is a challenge. Older millennials are in their prime income-earning years and have more buying power. They have a median household income of $101,200 and buy homes with a median price of $274,000.
- Student loan debt complicates buying and renting.NAR reports that 47% of younger millennials with debt had student loan debt and a median loan balance of $21,000. For older millennials, 42 percent had student loan debt with a median loan balance of $30,000.
- Consider the value of location.Home prices have millennials considering smaller and more affordable cities such as Oklahoma City; Grand Rapids, Michigan; Madison, Wisconsin; and Durham, North Carolina. Millennials also like to be close to work and amenities.
- Smart home technology is popular.Millennials want it. Think of options: smart locks, thermostats, smart lighting, smart security systems or anything that provides convenience and integration. Renters may even be willing to pay more for a house or apartment that offers smart technology features.
- Update amenities and design.This can be a challenge as tastes in paint colors, flooring and décor can be so different from person to person, and trends are constantly changing, Still, it’s a good idea to understand the latest trends and consider those that make the best financial sense for your property if you want to attract a millennial buyer or renter.
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