Remember the "good old days" of rental home investing? You know, when the decision path to buying the right property for cash flow and appreciation was pretty much a straight line. The younger generation was entering a good job market, and their ultimate goal was to buy a home. However, they wanted to rent while they got settled in their career and made sure they were going to be staying put for a while.
Those were the days of the Baby Boomer, moving through the rental stage to home ownership and long term employment and residence. A lot has changed. The loyalty between employers and employees has mostly evaporated. Large employers experience higher turnover that in the past, and retirement packages haven't been as lucrative overall as in past generations. This is one reason for a higher mobility rate among working Americans. Their path to a good job is far from a straight line these days.
Millennials are Moving Around
Rent.com has just published the results of a survey of renters. They surveyed 1,000 renters between the ages of 18 and 34. What they found is that the millennial generation a generation of movers. Just under half of the survey respondents say that they are living in a different area than their hometown or where they went to college.
Around 44 percent of those surveyed had moved into a more urban area than the one in which they had grown up. They're valuing higher density housing, entertainment and shopping options than generations past. More densely populated areas also offer shorter commutes and more time for other activities they value.
While 60 percent of them say that affordability is at the top of their rental priority list, almost half of them admitted they were paying more than they would like in order to live in a dense urban area. They enjoy greater job prospects, a lot more entertainment options, and a lifestyle steeped in more events and larger venues.
By a very large margin, the main reason for moving was for job opportunity. At less than half that response rate, 21 percent said they moved to be near a significant other. Reasons are not as important as results. They're moving around, and rental property investors should understand their motivations and try to respond with properties where they want to be if they want to maintain high occupancy rates. But, it's not just about moving with this generation.
Amenities are Important to Millennials
Another straight line in the past was to provide a swimming pool and maybe a laundromat to draw a steady stream of tenants. According to Axiometrics.com, it's a more convoluted path these days. Amenities, both on and off site are important to the millennial generation.
As always, location and price are at the top of their priority list, but they'll bend on these for the right goodies. While upgraded finishes and rentals that more resemble condominiums are amenities that apply in most communities, there are location-specific amenities of great importance. That urban thing comes into play, with the arts and entertainment just a walk away being very important to many in this generation.
For others it's a green belt, park, or nature preserve nearby. They'll sacrifice greenery in their rental project or no yard if they can easily reach a nice place to enjoy nature. Don't overlook the importance of pets in our lives. Offering amenities related to pets, particularly dogs and cats, can draw tenants away from the competition.
Offering on site or nearby gathering places is also becoming popular. A coffee shop on site or within walking distance can make the difference in a rental selection for this younger generation. They value socialization with their peer group, and nearby gathering spots rank high on their list.
If you are targeting younger renters, consider their mobility and amenity desires and you'll maintain higher occupancy rates.