Times are a-changing – Baby Boomer Renters vs Millennials
I confess that I am showing my age in sharing this information, as I am a Baby Boomer. Times and lifestyles have changed significantly from when I started renting places to live. When we rented, life was definitely simpler, with none of the hi-tech bells and whistles that we currently have. We simply wanted a safe and decent home. We were also willing to sacrifice upscale for low rental rates. Rental apartments and houses were more basic without the fancy granite countertops, stainless steel appliances, in-suite laundry, etc. If we had common laundry in an apartment building, that was bonus. That meant that we didn’t have to go down to the nearest laundromat and spend a couple of hours doing laundry.
Fast Forward to Today! Who are the Millennials?
In case you were aware of the exact dates, the generation known as the Millennials were born between the years of 1981–1996. They grew up with rapidly changing technology which is why they are so comfortable navigating the internet, electronic devices like smart phones, tables, social media and the entire digital world. With everything being more instantaneous and accessible than at any previous times, Millennials are and will continue to be a very important generation to understand.
Let’s first quickly look at some differences between the recent generations and the chart in this link below shows the size of each generational cohort today in Canada.
Currently, Baby Boomers are the largest age cohort, but the Millennials are the second largest cohort and are projected to outnumber the Boomers by 2029.
it is worth noting that the Generation X cohort are in between Baby boomers and the Millennials.
Also, Generation Z are the age cohort following Millennials and they too are a smaller age cohort and even slightly smaller than the Generation X group.
Gen Xers and Gen Zers although smaller cohorts than the baby boomers and the Millennials these two cohorts are not any less important in their impact on various aspects of society, but for this post I am focusing on renting to the Millennials because they are the next largest age cohort.
What I found interesting was that there currently are more Millennials than Baby Boomers in Alberta, Yukon, the Northwest Territories and Nunavut. This is valuable information for investors and landlords in these and other provinces when it comes to looking at investment properties.
Understanding your geographic market and who makes up your rental market when it comes to investment properties is extremely important. If you scroll down in this link to chart 3 & 4 you will see where the Millennials want to live.
What is Important to Millennials
Unlike previous generations, Millennials value their freedom and flexibility which is why they are more likely to change jobs and or careers than older generations. They are more interested in experiences, travel and using things rather than accumulating things. Think of how popular all the sharing programs are now, like car share, office share, and bike share to name a few. The Millennials are the largest users of these programs.
They generally are cost conscious because as a group, have amassed larger student debt and tend to buy from brands with which they connect.
Millennials are more likely to rent because of lack of housing affordability combined with their financial constraints; they don’t want to be tied down to an asset. In other words, they want flexibility to travel, change jobs, and move to other cities more often, and they are not ready to settle down and get married at an early age like previous generations. Therefore, they are not willing put down housing roots until they get married.
As Millennials currently dominate the rental market, it serves any landlord or rental housing provider to better understand the needs and wants of that generation. According to recent stats, Millennials can move every 2 to 3 years. This means that you will need to work harder and smarter to retain them as tenants.
As mentioned, Millennials have grown up with a certain higher level and hi-tech quality of life and are accustomed to this. They are unlikely to settle for what I grew up with in my rental life. They want experiences and amenities and are willing to pay for these desires and higher quality of life.
How to Attract and Retain Millennials by Providing these 5 Things
1) Advertising with easy online access
When advertising rentals to Millennials, offer virtual or self- guided tours, as they don’t want to waste time lining up viewings with landlords and leasing agents unless it is a property that they want to further investigate. Setting up an online reservation system to book actual viewings will work especially well for Millennials. Post your rental ads on social media local rental pages and or groups. Use videos where ever possible, as they are proven to garner the best results for Millennial responses.
2) Accept digital payments
This includes rent payments which can be e-transfers, online Pre-authorized payments, or rental payment apps to which there are several. If you own a multifamily property or own a suite in a multifamily property, where there are shared laundry facilities (which can be detraction these days), it serves you well to have an app based digital payment system. Once again there are many to choose from, and it worth researching the payment app that best works for you and your potential Millennial renters.
The form of communication with Millennials is critical as they prefer to communicate via text or online, vs email and for sure the phone. There are several apps like WhatsApp, Telegram, and other communication apps that you can set up for more secure communications.
4) Offer Hi tech amenities that Millennials want
If you have a multifamily property, gyms and pools are nice, but Millennials tend to look for co-working spaces which allows them to work remotely. Top of the list of things Millennials really want in their rental home is reliable high speed Wi-Fi. Homes featuring things like smart programmable thermostats, App based Smart access systems (sometimes with video access), smart locks are important. As ordering products online have become more popular, package delivery systems, on-site parcel delivery containers or rooms also have become a strong attraction.
6) Pet and Eco friendly homes and services
As Millennials are less likely to have a family in their younger adult years, they tend to have pets and so -pet friendly homes are very desirable.
Because Millennials, as a cohort, tend to be more environmentally sensitive than previous generations, they do want more eco-friendly homes and environmentally sensitive approaches to their lifestyles. Things like recycling programs, community gardens, charging station capabilities for vehicles, E-bikes E-scooters, etc., and outdoor space where available will definitely attract more of the Millennial renters.
Providing Rentals for Millennials
As a rental housing provider, knowing your client and what they want will work well in creating a win/win for you and your Millennial renters. You can spend the time and money now to develop and acquire the home related items to attract Millennials wanting more and it will pay off in higher rental income and more stable rental environment for the future.
Like all previous generations including Baby Boomers, Generation X, and Millennials creating stability is important as each group gets into their settling down stages in their 30s and 40s. Owning strategically-selected buy and hold investment real estate is a great way to help create that desired stability. I have had the pleasure of working with several Gen Xer and Millennial clients that have seen the value of owning investment real estate in their younger adult years and have already started to build their investment real estate portfolio for their financial future.
Recently, I have been focusing on Edmonton and higher quality investment properties that will attract the Millennial renters because that is the future of this rental market. By providing my investors with these type of properties, it will position my clients for long term success. Email me at [email protected] to discuss your investment properties needs.