The search for rental properties is gradually increasing all over the US housing market as millennials stray further away from the property buying market. The question that every real estate investor is dying to know is what exactly do millennials look for in rental properties.
With the ongoing trend of rising house prices, it comes as no surprise that millennials are now making up the dominant demographic within the rental market. It is estimated that more than half of the current housing market are millennials and most of them are renters looking for rental properties. For landlords, it’s important to take into consideration millennials’ desires and wants if they want to attract tenants to their rental properties and generate a positive cash flow from their rental income.
So what do millennials want from a rental property? What can landlords do to attract this group of tenants? And why are millennials choosing to rent over buying an investment property? Read to find out the answers to these questions and more. Please feel free to leave any comments below and share your experiences with us.
To rent or not to rent? That is the question
There are so many benefits that come with renting out rental properties rather than buying and that is why so many millennials are choosing this route. Here are some of the advantages that make millennials choose to rent over buying:
This is one of the main advantages of renting over buying for millennials who might not want to put their foot down in a permanent location. With their increased desire to travel and constantly changing their jobs, millennials prefer to enter the renting world rather than making any commitments to buying. Entering into a six-month or year-long lease contract is a much more viable option.
Chance for diverse cohabiting
Renting a property not only opens up flexibility on where a tenant can live; it also means they have more flexibility when changing who they live with over a period of time. From friends and family to romantic relationships, renting gives more room for flexible and adaptable living arrangements which millennials love.
An alternative to the property ladder
The past few years have been difficult for first-time home-buyers to get onto the property ladder because home prices are so high. This has led to a flow of people choosing to rent instead. Many millennials are now viewing renting as a long-term housing solution and not the short-term temporary arrangement that so many see it as.
Now that you have a clear idea as to why millennials choose to rent over buying, let’s move onto our next point. What do millennial renters look for in a property? There are many different factors that a potential tenant will take into consideration when it comes to selecting a rental property and calling it home. These factors may include the following:
- Access to public transportation
- Distance to shopping/entertainment
- Proximity to family and friends
- Cost and amenities
- Length of commute to work
These factors are all very important when choosing the perfect rental property. However, another very important factor is LOCATION! Location is undoubtedly one of the main reasons a potential tenant decides if your rental property is right for them or not.
Millennials look for rental properties that are close to where the action is. They tend to flock towards urban locations and find living there more appealing. So as a real estate investor, you want to be chasing the locations that are attractive to millennials in order to rent out your house and make a profit. Look for an area that has all the public amenities that this group searches for like universities and a growing job hub.
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Millennials not only look at where the rental property is located but what the rental property consists of. Millennials look for rental properties that have the following traits:
- Pet-friendliness: Do you allow animals in your building? Is there a place where pet owners can take their pet for a walk?
- Parking: Do you have spaces assigned especially for tenants? Is there visitor parking?
- Clear and safe access: Is there snow removal? Are the walkways kept free of rubbish and garbage?
- Proximity to amenities: Are the grocery store, pharmacy, bank, and public transit within walking distance and easy to reach?
- Security: Your tenants want to feel safe and secure in the building. Do not skimp on security measures. Ensure all doors and windows can be locked and that all the locks are functional.
Technology and rental properties
Millennial tenants have grown up online with the use of the internet and social media. So it is only normal for them to be the generation of renters who expect to be able to transact on their tablets and smartphones. Landlords who are looking to rent out their property to millennials should equip their property with high-speed wireless internet. Landlords can even make use of technology and start communicating with their tenants online and track their rental payments.
It is what’s on the inside that really matters
One thing that is also becoming increasingly clear is that the millennial tenant wants more than the bare necessities and is looking for added extras in rental properties before entering into one. The days are long gone where renters would pick out a property that purely supplies their basic needs. Millennial renters are keeping their eyes open for rental properties that have nice interior decor, technological features and offer a more flexible, diverse lifestyle.
Some examples of the added benefits landlords might like to consider if they’re aiming to appeal to the millennial tenant are:
- Underfloor heating
- Provision and maintenance of white goods (fridge, freezer, dishwasher, washing machine, tumble dryer etc)
- Chances to ‘give back’ i.e. being a landlord who is involved in the local community
- Outdoor communal spaces
The bottom line
To fill open units and always have a high occupancy rate, you need to know what millennials look for in rental properties then exceed their expectations. While millennials have somewhat different values and preferences than other tenants, with a few tweaks and tricks you’ll be able to adjust your approach to attract them. Check out Mashvisor’s knowledge center where you will find numerous blogs to read about millennials and how to attract tenants to your rental property.
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