The Millennials, aka. Generation Y, graduated college with $1 trillion in student loan debt. They graduated into an economy where jobs were scarce, lay-offs routine, and competition high. They are aware that spending their entire career with one company is likely an archaic notion. They remain single for longer. The get a job, get married, buy a house, raise a family, and retire from the company template doesn’t apply anymore.
Amongst other names, they have been called Generation Rent. They are a viable demographic for multifamily real estate investors like Jason Cohen Pittsburgh to target when repositioning real estate as apartments.
Why Millennials Are Renting:
They may rent forever. Already saddled with debt and often working lower-paying jobs, Millennials are reluctant to take on more loans, like a mortgage.
Jobs are few and far between and the competition is high. And, many employers haven’t exactly proven themselves to be stable or loyal. Gen-Y’ers may need to move frequently to find employment. They can’t be tied down to a house. So they rent.
They also know that a start-up may quickly be brought down, the corporation may lay off a floor of employees, or their job will just be outsourced overseas to save money. Jobs are volatile and Millennials don’t want to worry about paying a mortgage, and possibly facing foreclosure, during the next bout of unemployment.
They also entered the workforce either just prior to in the middle of the housing collapse. They heard the horror stories of burst bubbles, foreclosures, toxic loans. It just doesn’t seem worth it to many when they can rent for a set cost per month without getting hit with unexpected home improvement expenses that they haven’t budgeted for (with obligations like repaying student loans). They’ve also seen houses sit on the market for prolonged periods of time. They can’t wait indefinitely for a home to sell that if they have to relocate for work.
Take note multifamily real estate investors — this young generation may already be too jaded as a whole to do anything but rent.
What Millenials Want in an Apartment:
Millenials are often willing to sacrifice space for convenience when it comes to apartments. When targeting this market, multifamily real estate investors would be wise to reposition buildings in prime locations into hip apartments. An often itinerant generation, Millennials don’t have the amount of stuff of other generations. They will take a smaller apartment if they city can be their living space.
Their unwillingness to take on more debt often extends to cars, and many Millennials choose public transportation, biking, or walking. Smaller apartments within walking distance or on bus lines are often preferable than expansive units that require a car for accessibility to work and their social lives. Also, a place to store their bicycles is a huge plus.
This is also a generation almost defined by its technology. Millennials are responsible for many tech start-ups and are known for never being without their devices. Wireless Internet is huge for this population. Many Millennials drop cable because everything they want is accessible online.
The major competition to multifamily real estate investors when aiming rental properties to Millennials comes from an unexpected source. Parents. Sometimes, the rent is too damn high, and Millennials have demonstrated a willingness to move back in with their folks.