A recent survey* of 1300 millennials (also known As Gen Y; born est. 1982) states that 60% of participants would rather rent a home than buy one in the next 5 years. Is this a signal of an anti-buying trend for the younger generation? According to an article on marketwatch(dot)com, many millennials surveyed say they just can’t afford to buy.
A recent survey* of 1300 millennials (also known As Gen Y; born est. 1982) states that 60% of participants would rather rent a home than buy one in the next 5 years. Is this a signal of an anti-buying trend for the younger generation? According to an article on marketwatch(dot)com, many millennials surveyed say they just can’t afford to buy. Because millennials tend to get married later than previous generations, they may delay big purchases. The article also explains that many millennials do not like “feeling stuck in one place.” This can impact renting and buying behavior immensely.
Does this ‘tendency’ to rent make sense financially? The numbers stated in this article say it does not (we will leave it to your to run your own analysis and determine if you agree). Apparently, over a period of thirty years, renting is estimated to cost someone $717,000 with no net asset at the end of the period.
Not everyone agrees with this analysis, which focuses solely on the cost of mortgages . In reality, there are numerous factors – too many to conclude that renting is a ‘bad decision.’ For one thing, it does not account for all costs of home ownership, including maintenance, insurance etc. It also does not discuss that a savvy millennial may make more money investing funds into stocks, for example, and gain a higher return on his or her investment.
There is also a psychological element at play here. Regardless of a financial argument to buy, remember that millennials experienced the housing crash first hand. They have seen foreclosures or been through it themselves. They are also subject to college loans as higher education costs have vastly increased over the years. Behaviors are not just “generational” but influenced by the environment in which the millennial generation grew up.
So, what does this mean for the property management industry?
For one thing, it means that demand by the younger generation for good quality condo and apartment rentals is likely to continue to be strong. It also means that the concept of service may not be ‘universal.’ In order to best serve this younger generation, we as property managers need to define what it means to provide excellent rental property management service to the Millennials.
How well do we all understand this generation’s needs and experiences? Our industry should take extra steps to understand this generation, and to take it seriously. Its preferences and its unique traits should be studied by all property managers if they want to be able to provide superior property management services. At Metropolitan Pacific Properties we continue to take active steps with our staff to make sure that we continue to evolve with the times and implement a strong service model that is relevant to different customer demographics.
If you have any questions about improving rental management service to this younger generation, please reach out to us.
Orig Article: http://www.marketwatch.com/story/the-700000-mistake-nearly-6-in-10-millennials-may-make-2015-01-22?dist=beforebell
*Survey Source: Elite Daily / Millenial Branding