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How Millennial Housing Trends Affect the Rental Market

Written by Posted On Friday, 29 November 2019 05:53
Facts about Millenial Housing Trends Affecting the Los Angeles Market Facts about Millenial Housing Trends Affecting the Los Angeles Market LBPM

 

Navigate Residential Property Management With Ease

The key to successful property management is transparency, and the proof is in the details. As the 2nd largest city in the United States, the rental market in Los Angeles is expansive and competitive. However, the challenges of owning and managing rentals in this metropolis can reap higher returns. With Baby Boomers approaching retirement, Millennials are an emerging market of tenants. Any property owner or manager must be willing to appeal to this generation since they are approaching their priming earning and spending years. Here are some quick facts about Millennials to help property investors and owners better understand this growing target audience.

 

Quick Facts:

  • Between 2016 and 2017, 20 percent of Millennials moved to a new residence.
    • 99 percent of Millennials research potential residences and rental homes online.
    • Many Millennials prioritize affordability since 46 percent of them have student loan debt.
    • The majority of Millennials, 58 percent, find their rentals and residences via mobile devices.

 

In this blog, we’ll cover the ways in which Millennials are changing the rental landscape. Before we get started, here are a few key takeaways:

 

    • Millennials are interested in nostalgic architectural details.
    • Don’t expect Millennials to just settle on a property because it meets their base requirements.
    • Affordability is the number one concern for Millennials when it comes to housing.
    • Residential properties will need to provide an online experience to reach Millennials.
    • Property owners and managers will need to embrace innovation, new technology, and space-saving designs to convert Millennials into long-term tenants.

  

What Millennials Want In A Rental Property


For L.A. residential property owners and managers, it is crucial to understand what Millennials are looking for in a potential rental, so you can provide the solution. In this section, we cover the major selling points for your ideal Millennial tenant!

      1. Vintage + Retro Details


In such a modern digital world, it might seem funny, but nostalgic marketing and retro styles and designs are the best way to make Millennials fall in love with your property. While this digital-savvy generation prefers the latest innovative appliances and recessed lighting, they also can’t help being drawn to the charm and style of older home designs.

The top-ranking home design trends on Millennials’ radar include:

 

Mid-Century Modern

Millenial Trend Mid Century Homes

 

 

Pre-War Details (i.e. Art Deco)

Millenial Trend Pre War Homes

 

Mediterranean Style

Millenial Trend Mediterranean Homes

Even if your property does not align with any of the above styles and/or details, don’t fret. Keep in mind that there are many minor changes you can make to enhance the charm of your residential property unit(s). Consider adding crown moldings or using virtual staging tools to appeal to a potential Millennial tenant’s penchant for nostalgia.

      2. Security + Safety


More so than previous generations, Millennials will travel and relocate for secure jobs, safe neighborhoods, and the quality of life they seek. Currently, many Millennial housing trends illustrate that young professionals, couples, and families are moving to areas with lower unemployment rates and a manageable cost of living. Because of this, many Millennials are picking up and moving to up-and-coming cities in the Midwest--avoiding major cities where housing costs have skyrocketed, such as New York City and San Francisco. With tiny homes and living on the road becoming a more viable option, it will be an important task for Los Angeles property owners and managers to give Millennials a reason to stay put in an expensive city.

  

What are the Key Ways That Millennials Are Shaping The Rental Market


Based on what Millennials value in a rental property and their purchasing habits, how are they impacting local housing markets? When trying to secure the ideal Millennial tenant, keep the following in mind to stay relevant and competitive in your own niche!

Competitive Pricing


Since many Millennials deal with the additional expenses of student loan debt and unprecedented inflation in housing costs (compared to previous generations), this primary need for affordability influences Millennial tenants to opt for smaller properties. Keep in mind that the median size of properties purchased by Millennials is 1,800 square feet. Compare this to the median size of at least 2,000 square feet for Generation X and Baby Boomers. This rule applies to rental properties as well. In order for Los Angeles residential properties to secure a worthwhile Millennial tenant, you will need to develop competitive price points that fit their budget.

Demand For Quality Photos + Virtual Tours


Everyone is online these days--not just Millennials. With this in mind, seeing photos of a property before touring it in-person is important to the vast majority (90 percent!) of renters and buyers under the age of 62. In order to reach potential Millennial tenants, property owners and managers must maintain an online presence that’s not only visible but also reputable, which is usually reflected in the quality of content. High-res photos and virtual tours will offer Millennial renters a sense of clarity that will inform their purchasing decision. Keep in mind that pictures should highlight the interior and exterior of your property or unit whenever possible. Things like lighting and focus ought to be a priority in order to give users an accurate idea of dimensions and proportions. Always opt for professional photography and avoid applying filters or image-distorting lenses since these techniques often interfere with the sharpness of your image.

Increased Digital Marketing + Online Presence


To piggyback off the last point, Millennial tenants expect more than just easy-access information pertaining to a property online. This generation wants to be given an experience of a rental home or unit from smartphones or digital devices. Additionally, it will be crucial that property owners provide brand value and awareness via blogs and social media activity to attract Millennial tenants. Did you know that property owners and managers can reach 99% of Millennials by implementing digital platforms to their advantage for tenant acquisition? Digital marketing and software can also help property managers maximize time, lower overhead costs, and simplify life for both landlords and tenants!

 

What Property Managers Should Know About Millennials


Now that you know more about what Millennials look for in rentals and housing and how to better appeal to them in your own strategy, what actionable steps can property owners and managers take today to secure valuable tenants from this emerging market? Here are a few key tactics provided by the Los Angeles property management experts!

Prioritize Amenities


Even though many Millennials are venturing into suburbs and more affordable markets, a large percentage still wants to live near cities or within walkable neighborhoods with lively cultural hubs. Keep in mind that you can bring the energy and vibrancy Millennials are looking for in a residential property with building-wide amenities and activities. If you own or manage a multi-family residential property, you can consider implementing a dog run for pet owners, a fitness room with available classes, and/or a game room. Some more world-class amenities that add value to your property, include:

    • Communal workspaces
    • Rooftop lounges
    • Outdoor dining area
    • Smart home features
    • Monthly social events

 

Think Long-Term


Even though Millennials are more willing to move and relocate for housing, don’t assume that this generation lacks potential as long-term tenants for your property. In fact, it’s important to note that the majority of Millennials would rather grow into their rental home or unit rather than purchase a starter home that lacks the personal charm and liveliness they’re looking for. Millennials are purchasing homes much later than previous generations, and as a result, they are looking for rental properties that are family-friendly and provide a full home feeling. Because of this emerging value and trend, it will be important for residential property owners and managers to predict the future needs of Millennial tenants as they age and their families grow. Even in smaller rental homes and units, this demographic will require open floor plans for family gatherings, ample storage space both inside and outside their living spaces, bathtubs, and energy-efficient upgrades just like everyone else. To make your rental even more family-friendly and valuable to long-term tenants, property owners and managers ought to offer outdoor spaces for playing and socializing, accessible trash rooms on each floor of a condo or apartment building, and laundry appliances in every unit and/or home. This will ensure that Millennial families can grow their families and lives on your property over the years.

 

Invest In Upgrades


Did you know that a whopping 75 percent of Millennials want appliance upgrades in their rental? An effective selling point and tenant retention tactic for Millennials who already rent your property are replacing old stoves, as well as upgrading carpet to hardwood flooring--or laminate to granite. Providing individual units with high-speed Wi-Fi is also a major plus since many Millennials rely on internet access for daily tasks and even work.

Quality still counts when it comes to your budget-conscious Millennial market. Market research and trends for this generation cite high-end finishes as a major demand and selling point, such as granite countertops and stainless steel appliances. Other important trends your residential property can incorporate include the following:

    • Hardwood or stone floors
    • Open floor plans
    • Energy-efficient appliances + fixtures
    • In-home office spaces
    • Smart home features (i.e. lighting, thermostats, and security systems)
The Future Of Property Management

Embracing the needs and concerns of Millennials is crucial for the future and ongoing success of your rental properties. Do you have additional questions about making your Los Angeles property Millennial-friendly that aren’t covered in this blog? Contact LBPM today with any inquiries about market research, tenant acquisition, and more. Call our direct line at 818.981.1802.

 

 

 

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