Over the past several years, the millennial generation has been accused of killing a host of industries. Market Watch reports Millennials are responsible for ruining institutions and industries like the nine-to-five workweek, diamonds, and even napkins. While some of these accusations are tongue in cheek, there is no denying that the millennial generation has a huge effect on our economy. The Pew Research Center defines the millennial generation as those born between 1981 and 1996, or adults ages 24-39 in 2020. This generation is the prime age for moving important market indicators, such as employment and homeownership, therefore it is important to pay attention to how they affect real estate rental trends. In order to market your Atlanta rental property effectively, you need to learn why more millennials are renting, and what they are looking for in a rental property.
Millennial Values and Mindsets
Compared to older generations Millennials live at home longer, get married later in life, and engage more with digital technology. According to Experian, Millennials carry an average of $34,504 in student loan debt. They place a high value on happiness in both their personal lives and in their careers, and, according to Gallup, are the most likely generation to switch jobs. Switching jobs often leads to moving, either across the city or across state lines. Housing Wire reports that Millennials move more than any other generation, about once every two years.
Most Millennials came of age in the midst of the 2008 financial crisis, which greatly affects how they treat money and what they value. Overall, Millennials tend to value experiences over purchases. According to this poll, about 3 out of 4 Millennials choose to spend their money on experiences rather than goods, and specifically budget for these experiences.
What Property Managers in Atlanta Need to Know About Millennial Homeownership
How has homeownership changed with the rise of the millennial generation? In terms of value, Millennials prioritize freedom over owning their own home. Freedom to use their money for travel instead of home repairs. Freedom to take their dream job across the country without worrying about selling their house. Millennials often see homeownership as a burden instead of a smart financial strategy.
However, not all Millennials really want to rent forever. A recent survey by Apartment List reveals, “the vast majority of millennials want to own a home, but millennial homeownership rates have significantly lagged previous generations.” This lag has to do in part with the value changes noted above, but Apartment List also points out that many Millennials simply feel homeownership is unattainable and they are resigned to being renters for the foreseeable future. Among those surveyed, “12.3 percent of millennial renters said they plan to “always rent,” up from 10.7 percent just one year ago.”
Why do Millennials feel homeownership is unattainable? Finances are to blame for this real estate rental trend. As we noted above, Millennials carry a significant amount of student loan debt. However, that is not the only type of debt Millennials carry. In addition to student loans, Millennials have an average of $4,712 in credit card debt according to Experian. Paying off significant debt means less money saved for a down payment. Millennials are also receiving less down payment support from family members. According to the Apartment List survey mentioned above, “17.4 percent of millennials are expecting support, down from 19.1 percent a year prior. The value of this support is also shrinking; those who expect help in 2019 are expecting less ($8,928) than they did last year ($9,878).”
A smaller portion of Millennial renters believe homeownership is too risky. Again, Apartment List reports that of the Millennials they surveyed who plan to always rent, 28% are doing so because they see homeownership as a risky financial strategy. This could be in part because many Millennials began adulthood during the Great Recession, where foreclosures were common and jobs were scarce. Keeping their assets liquid simply feels safer than tying them up in the fickle housing market.
Millennials and Atlanta Real Estate Rental Trends
How much influence does the Millennial generation have in Atlanta real estate? According to Invest Atlanta, the median age of residents in the City of Atlanta is 33.8, firmly within the Millennial age range. Millennials are more likely than their predecessors to have a bachelor’s degree or higher, with many holding degrees in STEM fields. This rise in highly educated individuals, as well as top schools like Georgia Tech, has likely contributed to Atlanta being named a leader in technology and attracting new businesses.
According to the United States Census Bureau, the owner-occupied housing rate in Atlanta is only 43.4. The median household income in the Atlanta metro area is $66,958, while the average rent is $1,474. Millennials make up a large portion of the renter population and are likely to rent long term. In fact, Curbed Atlanta reports 5.8% of Atlanta Millennials expect to rent forever, and only 24% are on track financially to buy in the next 5 years.
Tips for Purchasing a Rental Property From Property Managers in Atlanta
With changing mindsets and values how can Atlanta property owners choose the right rental home? First, think about Millennial’s long term goals. Many will not be purchasing homes in the next 5 years, but they still want a place to call home. This is one reason the single-family rental home market is on the rise. As Millennials look to settle down and start a family, they want a single-family home, even if they do not want to own, or cannot afford to own. In fact, even home builders are taking note and beginning to build entire communities comprised of single-family rental homes.
If you have not yet purchased your rental property, or you are looking to buy more property, set yourself up for success by thinking like a millennial renter. However, try not to get caught up in short-term real estate rental trends. For example, tiny homes are a recent housing trend and are inexpensive to purchase. However, a smaller portion of the population will be interested in a tiny home, and it is hard to predict how this trend will play out in the next 5 years. Remember, to run a successful rental property you should attract more than one type of renter. When looking for rental homes that will be easy to place a tenant in look for an average layout, 3 bedrooms, less than 15 years old, and with amenities like a washer and dryer. The majority of Millennials own a pet, so picking a pet-friendly home with a backyard will help you attract more renters. Choose a rental property in a good school district, close to public transportation, and nearby shopping and restaurants. For more guidelines on buying investment property see our recent post Atlanta Property Management Companies Make Investing Easy.
How Property Managers in Atlanta Can Market to Millennials
Millennials spend a large portion of their time online, which is why online marketing is so important. In addition, with the rise of the tech industry in Atlanta, more young professionals are moving to the metro area from other parts of the country. Often, these young professionals want their housing in place before they move, and will rent a home without setting foot in the physical space. High quality, professional pictures, and video walk-throughs should always be part of your marketing strategy.
However, you cannot simply advertise your home across one or two websites and expect to bring in high-quality tenants. At Specialized Property Management Atlanta, we have our own webpage where potential tenants can search available properties. But if that was the only place we advertised rental properties, we would be doing our clients a disservice. By advertising across dozens of websites and listing the properties we manage on MLS, we cast a wide net in search of the best tenants.
Why You Should Work With the Top Property Managers in Atlanta
The landscape of property management is changing, whether we like it or not. New generations bring new challenges, but as one of the top property management companies in Atlanta, no one is more prepared than we are. Our property managers are experts in Atlanta real estate, and well equipped to deal with the changes Atlanta is going through. But don’t take our word for it, look at Google or the Better Business Bureau to see reviews like this one:
“…After SPM took over, that property’s revenue generation increased significantly; I no longer had the burden of maintenance and tenant calls; and SPM’s online portal made bookkeeping/tax prep a breeze. But what really distinguishes SPM (and prompted me to write this review) is their customer service. It. Is. Excellent. My account with them was for a SINGLE property. They treated me like I was their largest account, and I always felt like they were on top of even the smallest issues. SPM didn’t ask for my trust … they earned it.” – Steve P. From Google.com
Real estate rental trends may change, but our management will make sure your property stays relevant. To request a professional property management quote, contact us today at 404-596-8454.