Rental property managers take note: Today’s 20-somethings have had good reason to delay major purchasing decisions, such as buying a house. After all, they came into adulthood over the last 10 or so years during times of economic uncertainty. While they may not have understood it all, they were witness to the real estate bubble burst, massive layoffs, and their parents’ financial insecurities.
Although Millennials or Gen Y—the generation of 18- to 34-year-olds—are indeed driving the housing marketing, the economic meltdown and resurgence that occurred during the past decade have many young buyers steering clear of becoming homeowners. In fact, only one in every four Millennials is either very, or completely likely, to purchase a piece of real estate in the next five years.
Even if they want to buy, they are making less than the generations before them, and it’s harder to qualify for loans during a time when many markets have rebounded to pre-recession prices. As a result, young Gen Y adults are renting—and that means rental property managers will need to understand this unique group of renters to capture their business and keep it. Here’s what you need to know:
Remember what it was like to be young
According to the National Association of Realtors® (NAR), only 3 percent of real estate agents are under 30—meaning very few agents and likely rental property managers are servicing this niche. A full 81 percent are older than 45 and 20 percent are older than 65. That’s a big age difference. If you fall in one of the latter age categories, you have to stop thinking like someone who has long been established and start thinking like a Millennial, who may have just moved out of his or her parents’ house.
Go digital and mobile—it’s mandatory
Today’s new digital real estate customer expects—no, demands—the ability to do everything online—from his or her smartphones. That includes every step from finding rental properties to submitting applications to paying, all with the click of a button.
To be a rental property manager right now, you must be prepared to reach tenants and interact with them online, and you must be mobile-ready. Otherwise, the huge group of Gen Y renters isn’t going to do business with you. Make your website mobile-ready, be active on social media, and offer them ways to conduct business online.
Brace yourself for super-educated clients
Generally speaking, Gen Y is arguably the most educated cohort to enter the market. With a quick search from anywhere, they can find out everything they want to know about a property, location, reasonable rental rates and contract terms, and so on. Where they once relied on real estate agents and their rental property managers to provide them with the information they needed to make a decision, now they have most of the details before they even contact an agent or property manager.
Be prepared to field questions and to manage too-high expectations brought about by their reliance on inaccurate online sources.
Cater to their parents
Roughly 26 percent of Gen Y live with their parents, and even those who don’t, likely talk to their parents every day. This generation values their parents’ input, and many still rely on their parents’ financial support. Prepare to deal with Mom and Dad when you work with Millennials.
Show the right rental units
It’s likely they’ll come to you with a list of requirements for the type of properties they want. Still, it doesn’t hurt you to know what this group is drawn to in a rental.
Gen Y seems most interested in location and the efficiency and adaptability of the rental units. They want easy access to public transportation, shopping, recreation, and entertainment, and they want access to common areas that encourage social interaction. Additionally, many prioritize Wi-Fi, fast-speed Internet, and cell phone reception over other amenities. Every person varies, so do your work to find out each person’s must-haves. If you miss the mark on the first couple of properties you show Millennials, you could lose their business for good.
Because they aren’t interested in buying anytime soon, this large group of renters offers real potential to be long-term quality tenants. In fact, 84 percent have never fallen behind on their rent and only 4 percent have been evicted for nonpayment of rent or other lease violations. So it’s definitely in your best interest to learn the ins-and-outs of working with Gen Y renters.
Take our course Property Management – The Next Generation to learn how Gen Y has changed the job for rental property managers and what you can do to make the most of those changes.