Millennials and the Rental Market
The Millennial generation are people born between 1981 and 2000, and they are becoming an increasingly important demographic in the real estate market. Their importance is driven by the fact they compromise over one third of both the workforce and the Canadian population and it’s expected that within the next 15 years the Millennials will represent 75% of labour force. A key problem impacting this generation has been underemployment (i.e. temporary work and low wages) which has reduced their loyalty to employers, and resulted in a generation that is more transient than previous generations and renting longer. That said they are the most educated generation in history and have considerable purchasing power based on the size of their population ; which makes them an important demographic to landlords and real estate investors. There has been extensive research done on the preferences of millennials in the rental market. Some of the important themes include:
Location: Cultural considerations are a key priority when looking at location. Millennials are social and one study suggests they watch 30% TV than other adults (Source: BBM Canada InfoSys TV September 2012 - August 2013). Their ideal neighborhood would have trendy places to go out such as beer gardens and patios and have a rich history. Examples of such neighborhoods in Hamilton would be James Street North or Locke Street. Millennials are also more likely to participate in outdoor sports than older generations such as biking or hiking, so if there features like parks and trails you should make sure to advertise this. Work life balance is important to millennials, so it’s important to ensure your investment property is accessible and there are many jobs within a short commute via public transit, highway, bicycle, walk, etc.
Property Features: Millennials place more emphasis on having a large modern kitchen with meal prep area while other generations put relatively more priority on other rooms. Consider upgrading your countertop to granite or César stone and placing an attractive light fixture in the kitchen. High tech features such as high speed internet service, electronic key access, and tech savvy appliances are important. Approximately ¾ of Millennials own pets so having a pet friendly environment is critical.
Eco-Friendly: Millennials are more environmentally conscious than other generations and want to minimize their carbon footprint, so having energy saving environmental features will be a plus. Some environmental friendly features include energy efficient appliances, high efficiency heating and cooling systems, insulation, energy saving bulbs, low flow toilets, and water saving faucets.
Lastly, Millennials are tech savvy and very active on social media with approximately 65% having a social profile that they update daily. Therefore, social media can be integral part of promoting your rental properties and you should also look into accepting electronic payment methods, as many millennials have never written a cheque before.