Most young professionals do not dream of picket fences. They are motivated by their desires for flexibility in their career and are focused on their physical health and well-being than owning a home. To engage millennials, the real estate industry has to take a new approach in order to remain relevant to the younger generations.
Here are three trends driving the millennials’ perspective on buying vs. renting:
- Commitment
Most millennials prefer renting on a long-term basis over buying their own property. Owning a property means you’re making a commitment to live in that area for an extended period of time. It also limits their sense of adventure to move to a new job or a new country.
Millennials prefer the flexibility of either moving from job to job or across countries. They rather not be geographically tied down to one specific area. Thus, renting offers them more freedom that homeownership can’t match.
- Income
Millennials are in love with the idea of living the good life and are more interested in spending on experiences than investing in homeownership. Homeownership might leave them with more long-term debt payments on top of their current student loan debts.
By renting, there is no debt nor any financing aspect compared to homeownership whereby there would be a down payment and a loan secured to finance the property. With renting, there is little responsibility and the basic costs include monthly rent and utilities.
- Location
Location plays a huge part in millennials’ idea of homeownership. In some areas, renting is cheaper than buying. This is especially true for millennials who want to live in the city.
Millennials are also more conscious when it comes to choosing the right chic, urban neighbourhood for their first property. Amenities, transportation, food and even emergency services play a huge part in dictating where they would purchase or rent a property.
Therefore, research is very important to determine whether buying or renting is a better deal for the area they’re living in.
This buy vs. rent debate will continue to intensify as more young professionals prefer life as a tenant than as a homeowner, with renting still being the preferred option for most millennials. It could also be that many are still students or growing a career and renting remains the ideal condition until they are financially secured to own a home.
Thus, to entice millennials, you need to shift your perceptions of millennials and change the way you engage them. By understanding what drives millennials, you will be able to cater simultaneously to those looking for a place to rent or purchasing their first property.
