The largest demographic in the workforce, predicted to take up nearly half of the house buying market, the Millennial generation is influencing society in countless ways. When it comes to planning your investment properties and taking out a rental property loan, it’s essential that you know some of the trends that can be expected from millennials.
Our non-recourse loan lenders have compiled some millennial trends to be factored into your financial decisions, as well as our two cents on what it means for you as a rental property owner. Take a look into some millennial trends, and apply for a non-recourse rental property loan with First Western Federal Savings Bank today.
Millennials are more likely to change careers.
In their first decade out of college, millennials are reported to change their career four times — twice the rate as Gen Xers as reported by EdSurge. However, “career” is the distinctive word — changing jobs (versus careers themselves) happens even more frequently (but less frequently than some researchers originally thought).
Millennials are thought of as caring more about their jobs in terms of passion and interests. In fact, millennials are more likely to choose a job that pays less but provides better benefits, showing that while salary is important, enjoyment and an overall, holistically positive job means more.
How This Affects Your Rental Property: With consistent career changes and job shifts comes consistent relocation. It’s not always easy to get a new job in the city you currently call home. Millennials are less tied down to a single location than Gen Xers when they were the same age. Especially if your rental property is in or near a city, you can count on millennials to be renting from you at some point or another.
Millennials are more likely to move.
This builds off of the last point, in which millennials are moving more than expected based off of trends from previous generations. Forbes reported that “The United States Census Bureau found that, between 2007 and 2012, Millennials accounted for about 24 percent of the total population of the U.S., but they made up over 43 percent of all movers.”
Whether this is out of pure wanderlust, needing a job, or a combination of the two, millennials are on the move. Interestingly enough, women between the ages of 18 and 24 are more likely to move than men of the same age group.
How This Affects Your Rental Property: Transplants and newcomers to your area are likely to rent, particularly if you are in or near a city. When highlighting the perks of your living space and advertising for your rental property, it’s a good idea to mention nearby attractions or benefits of the area as a whole.
Millennials are affected by massive student debt.
Nationally, student debt has passed the trillion dollar mark and is the highest source of collective debt, even surpassing that of credit cards. On average, millennials who graduated college in 2016 have $37,172 in debt.
NPR recently reported that this is causing many millennials to put off buying houses. In their article, they explain that “Homeownership rates for people ages 24 to 32 dropped nearly 9 percentage points between 2005 and 2014 — effectively driving down homeownership rates overall. In January, the Fed estimated 20 percent of that decline is attributable to student loan debt.”
Millennials are getting married, having children, starting families, and even as they stay locked into their careers, they’re prevented from moving forward with other financial decisions because of student debt.
How This Affects Your Rental Property: Student debt is heavily impacting millennials and their ability to buy homes. Renting continues to be a priority, albeit a reluctant one for many, solely out of financial necessity. As a rental property owner, you can capitalize on the fact that homes and apartments for rent continue to be in high demand.
Millennials are tech-savvy.
This comes as no surprise to older generations who are convinced millennials are on their phones and tablets too much, but the implications for your rental property are significant. If you’re a seasoned property owner, if you’re used to filling out rental property loan applications and you’ve been doing this for decades, it’s time to catch up to how your target demographic searches for apartments and condos. The old days of posting listings in the ad section of the newspaper or putting fliers around town aren’t going to cut it.
How This Affects Your Rental Property: Marketing your rental property online is crucial to finding tenants. Craigslist, Zillow, Apartment Finder, or other sites should be utilized to their fullest potential. Make sure your listing includes photos, is well-written and descriptive, includes contact information, and any other relevant insights to the property. Check out other property listings to see what looks good and what could use some improvement, and format your listing from there.
Millennials are a generation full of potential and are a force to be reckoned with. Once you purchase a rental property with a non-recourse loan from First Western Federal Savings Bank, it’s more than likely that millennials will rent from you. Understanding how to reach this niche audience is critical to your success as a rental property owner.
If you have more questions about non-recourse loans and owning rental properties, our lenders are happy to help! Check out our FAQ page to find answers to commonly asked questions, visit our non-recourse loan page, or contact us to learn more.