In an annual report from Rent.com, 41 percent of landlords and property managers noted seeing an increase in millennial renters in the past year. This observation supports a general trend in the rental market: millennials are foregoing home ownership for renting. According to CNN Money, the Census Bureau reported a six percent decline in homeowners under the age of 35 since 2007.
Avoiding additional debt, mobility, convenience, location and amenities are contributing factors as to why millennials might chose writing a rent check over a mortgage payment.
Millennials love renting because it is…
- Low Maintenance – if a pipe breaks or the roofs starts leaking, dealing with the problem is only a call away. Property managers and landlords are tasked with maintaining the property and handling repairs. The burden of wear and tear and general maintenance issues fall on the homeowner not the renter. When considering the extra cost and time that comes with home ownership, renting becomes more appealing to a millennial on a tight budget.
- Flexible – As millennials start to establish their careers, they enjoy the flexibility of being mobile for work opportunities or the ability to explore living in new cities before settling down for good. Moving from a rental property is far easier than relocating if you own your home. Young people can move for a new job or to simply try a out another city without being tied down to a mortgage.
- Debt Free – With roughly 70% of college students graduating with some sort of student loan debt, the idea of taking on more loans associated with home ownership seems unappealing. While mortgage payments can be lower than rent in some cities, recent graduates likely do not have the funds necessary to make a down payment. Beyond having money for down payment, some millennials simply do not qualify for a mortgage. Opting to rent in their 20s can be a personal preference for millennials or a means to save for a down payment or gain financial stability before choosing to own a home later in life.
- Inclusive – Many apartments offer amenities such as fitness centers, pools, game rooms, or internet/TV services. These amenities might come with a higher rental rate, but the convenience of an all-inclusive living space with only one bill has its allure.
- Convenient – With the resurgence of cities as centers of economic energy and vitality, a majority of millennials are opting to live in urban areas over the suburbs or rural communities. Millennials enjoy the convenience of living close to shops, restaurants and offices. Renting is a far more affordable option for millennials who cannot afford the high price tag of owning a home in a metropolitan area.
At over 80 million strong, millennials are recognized as the biggest age demographic in the U.S. and contribute towards the shift in today’s renter-based society. As a property manager or landlord, recognizing the needs and wants of millennial renters will help you stay competitive and reduce low-occupancy rates.
Are you a property manager or landlord that rents to millenials? Let us know your experience in the comments!