The number of people renting properties instead of buying them is still at a historically high level. Increasing house prices and stagnating wages make it more difficult to put together the necessary down payment. That down payment is important if you are looking to avoid extra costs of homeownership like mortgage insurance.
This leave many people in a position it makes the most sense to rent. And as a property investors, that is good news for you. It provides an excellent opportunity to make money as a landlord because it’s easier than ever to find tenants.
Of all the age demographics, millennials (defined as young adults between 25 and 40 years old) are the group most likely to live in a rental property right now. They are also set to become the largest living generation in a matter of years, so if you are investing in a rental property, they are your target market.
Unfortunately, a lot of landlords do not realize this. When they are buying and renovating properties, they don’t take specific steps to attract millennials. So, if you want to maximize your profits and reduce any issues with tenant turnover, these are the best ways to attract millennials.
Choose the Right Location
This is good advice for any real estate investor. It’s no secret that location is the most important factor in real estate. However, a lot of landlords don’t know what location features are most important to millennials.
It’s a common misconception that schools are less important to millennials. This usually comes from a misunderstanding of what age millennials are. At the top end, you have 40-years old’s many of which are likely to have kids. At the other end of the scale, you have 25-30 years old’s. They might not have kids yet but are thinking about it in the future. It’s true that the average age that people have kids is increasing, so this is less of a priority. Still, don’t make the mistake of thinking that schools don’t matter to millennials at all.
Millennials will also look at commute times. Good road links and excellent public transport links are also a big bonus. They’re also more likely to cycle for health and environmental reasons, so anywhere with good bike paths is a big plus.
Entertainment venues and restaurants are also a high priority. Finding properties that are close to urban areas is your best bet. People like to be able to walk to entertainment hubs too. So even if they aren’t the most popular places in the city, being close by works in your favor.
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Allow Pets
Millennials represent the biggest share of pet owners in the United States (at 31 percent). However, most landlords don’t allow them. Even though there are some downsides to having pets, you can negate this by putting a clear policy in place and vetting tenants beforehand. If their pets have previously been a problem, you’ll find out about it when you get a reference from their previous landlord.
By allowing pets, you immediately widen your potential pool of tenants. You make yourself very attractive to millennials that have a hard time finding places that will take pets. Make sure that you advertise this prominently in your listings too and you’ll find that you get a lot of applications.
And you will often find that tenants will be willing to pay an extra fee added to the monthly rent to have a pet. This can bring in a little extra income each month for you. Additionally, if you save the pet fee each month, it serves as a hedge for cleaning once the tenant leaves if the pet has left a mess.
Modernize Communication And Payments
Millennials are the generation of the internet. They want things done quickly and conveniently. In fact, failing to respond to issues quickly is one of the biggest mistakes a landlord can make. Instead of just giving them a phone number to call, you should set up an online portal for reporting issues. This allows people to quickly take photos and report issues without having to wait in call queues. It’s also more efficient for you on your end, so it’s a great investment to make.
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Offering different payment options is also a big bonus. When moving money between friends and family, millennials often prefer to use modern applications like Venmo and Cash App. In their mind, it’s quicker and easier than a standard bank transfer. If you can offer these options, that shows millennials that you have modernized your processes and you are catering to their needs.
Make Eco-Friendly Upgrades
Millennials are often considered to be the ‘green generation’. Studies show that 77% of them are likely to pay more money for a product if it is sustainable. So, if you want to attract more millennials to your rental properties, you need to make them as eco-friendly as possible. The added bonus for them (and you) is that making sustainable changes will also bring energy bills down, making the property even more attractive.
You should consider upgrading the insulation in the property. If it doesn’t already have double glazed doors and windows, considering adding those too. If you are willing to make a big investment, you could even put solar panels on the roof. This will really set your property apart from others on the market. In some states, you can get tax credits for installing solar panels, which helps to offset some of the cost.
Make positive improvements in the bathrooms and kitchen too by installing low-flush toilets and low-flow taps. More energy-efficient appliances also make a big difference. Installing a smart thermostat is also a nice touch that shows renters you have created a modern home, and it makes it easier for them to manage their energy costs. When you do all of these things to bring the energy costs down, you can bump the price up a little bit.
You should also think about the small details, like the kind of paint that you use. Some people might ask whether the paint is eco-friendly and VOC-free, which isn’t something that landlords normally think about. But if you make the effort to use eco-friendly paint and you advertise that fact, your listing will really stand out.
In some cases, you might decide to rent to a different demographic. Depending on the location of your property, this can be an effective strategy. However, millennials are the largest demographic of renters and there are a lot of them. Slow tenant turnover is a costly problem for landlords, but if you create a property that is tailored to millennials, you shouldn’t have a problem with that.
Leave a Comment or Answer a Question Below: What other strategies or tips would you give to a landlord who is targeting millennials? Have you had a bad experience with a property that was in a bad location for renting?
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