Millennials are leaning towards renting versus buying and owning homes! They are finding their way through new life discoveries and career choices. During this, they’re not really thinking about paying mortgages and building equity. Understandable, of course! In fact, millennials make up the dominant demographic when it comes to the rental market.
When you’re living in a rental, most likely, you don’t have to take care of any repairs or problems that might occur. Your apartment complex, landlord or property management company will send someone to take care of it. In addition, there’s no need for yard maintenance. When you’re busy and on-the-go as a young person getting on your feet, you don’t want to think about these things! A lot of time, energy and money go into maintaining a property.
Millennials do not want to be held into a commitment that forces them to settle. Especially when you’re young, flexibility and the option to get up and go is vital. Since they’re still at the beginning phases of life, things are not always certain. Timing can be a factor that plays into everything. Millennials might just be looking for something temporary until they do find the right place to settle. Also, renting a house means you don’t have to pay property taxes and all the other things that come with purchasing a home.
Possibly, less time spent at home means one does not need as much space. Less space also means less cost. Even out of college, they might be living with roommates because that is also cheaper. It’s a chance for diverse cohabiting. What does this mean? It means renting allows adaptable living arrangements to occur. People can move in and move out as they please. Think of renting as a step on a ladder for a lot of people. It can give a preview into what they might or might not want in their future home. Plus, a lot of rentals are trendier and catered towards the younger generation.
Adding to living with roommates, living in a rental creates more of a communal feeling. You’re automatically grouped into a community where you live. The same can be said about living in a home in a neighborhood, but renting has a different purpose. Take college dorms as an example. This of course ideally is different than renting an apartment or a house. People in a rental community, especially one full of young people, are in similar stages in life. Distance to restaurants, shopping, and grocery stores is essential too. Millennials gravitate towards mixed-use developments and community hubs because everything is easily accessible, and the atmosphere is just right for them!
You might have heard this cliche saying about millennials. Well, for some but not all, this is accurate! As mentioned above, millennials aren’t quite ready to settle yet. Their careers and maybe even traveling is their focus. These two things are just not as immediate of a thing as it was for previous generations. Purchasing a home is a huge responsibility and pressure. They want to take the time to see what they want out of life.
Student debt plays a huge role. Already short of so much money, buying a home would mean even more debt added onto the list of money that needs to be paid back. Plus, a home needs more furnishing and things that need to be done such as landscaping or adding better garage doors. Renting might fit the budget better in the place that the millennial is thinking of living. Renting is the more frugal short-term option essentially.
Not all millennials are the same. Not everyone thinks the same way. Some people might be ready to settle at a younger age and see that the advantages of buying a home outweigh the pros of renting a home. Either way, millennials make up a huge part of the rental market. Therefore, it’s a smart tactic for investors to really appeal to them. Providing flexibility and affordable options is highly important for a millennial. Trends are always changing. The real question in life is where do you see yourself in 10 years?
Resources: MyMove, Bankrate, Mashvisor