More Americans are renting now than at any other time in the last 50 years, according to a recent Pew Research analysis of Census Bureau housing data. That same report also found 36.6% of all households were renters in the U.S. in 2016, a significant increase from 31.2% of households in 2006.
Moreover, young adults under the age of 35 “continue to be the most likely of all age groups to rent” — tipping the scales at 65%. This trend, coupled with the fact that millennials (ages 23 to 38 in 2019) are expected to become the largest living generation this year, makes millennials a driving force that continues to shape the rental industry.
Millennials are like no other generation beforehand. They have different attitudes towards marriage, travel, and homeownership. They’re also saddled with massive student debt while facing exorbitant housing prices. Whether it’s due to financial circumstances or lifestyle preferences, many are holding off on putting down roots.
Given this tendency, understanding millennial renter preferences offers a clear advantage. Below, we’ve outlined six tips for attracting this growing demographic to your rental property.
1. Get with the times on things like rent collection and communication
Millennials are often linked with the phrase “instant gratification” for a good reason. They’ve grown up in the smartphone era and are accustomed to ordering just about everything — from dog walkers to detergent — with the tap of a button. They have incredibly high expectations when it comes to technology. Imposing antiquated systems and practices, such as only accepting checks or installing laundry machines that don’t take debit cards, is going to garner eye rolls from folks who are used to exchanging currency digitally.
Embracing modern payment methods such as Venmo or Cash App could score you big bonus points. Alternatively, if you plan on hiring a property management company (which we highly recommend), check to see if they’ve adopted renter-friendly platforms such as Buildium or AppFolio (to name a couple examples). This caliber of property management software automates and streamlines myriad tasks and processes, including rent payments, maintenance requests, and lease tracking, all through an online dashboard.
Many modern property management platforms also give tenants the ability to pay their rent via credit card, which may be appealing to millennials who strategically use credit cards to rack up points for travel, cash rewards, etc.
2. Allow pets and advertise this prominently in the rental listing
Of course there are pros and cons to renting your property to pet owners, but having the right pet policy can nip a lot of those cons in the bud — and significantly increase your potential renter pool. Case in point: According to a May 2018 TD Ameritrade survey, 70% of millennials have a pet.
Another reality to consider: even if you don’t allow pets in your rental, tenants may sneak them in anyway. A 2003 study from FIREPAW found that more than 20% of renters were hiding pets in their rentals. While this study is a little dated, it shows that renters will often go to great lengths to accommodate their furry companions. By having a strict no-pets policy, there’s a chance you’ll still pay the price of having animals in your rental property without receiving any of the benefits.
3. Highlight neighborhood features that appeal to millennials
When marketing a property to millennials, you (or your property manager) are also marketing the neighborhood and surrounding areas to them. It’s advantageous to understand which features are attractive to this segment of the population and leverage them accordingly in your marketing.
Here are a few examples:
- Proximity to public transit/business hubs: Millennials prioritize shorter commutes to work and travel less by car than other groups. In your rental listing, highlight proximity to bus, train and ferry stations. Additionally, if there are paved trails nearby that allow bikers to safely and easily get from one locale to the next, it’s definitely worth a mention.
- Entertainment and restaurants: Millennials want to be close to urban areas with shops, restaurants and other attractions with cultural and social appeal, according to Nielson. This means the walkability factor can be as good as gold, depending on what’s nearby. Even if the amenities aren’t uber-hip — for example, a public park with tree-lined jogging paths, a favorite local coffee shop, or a funky corner store with a killer sandwich counter hidden in the back — call them out!
4. Add some modern touches
Your place may have been built in the 1970s...but millennials don’t want to feel like they’re living the 1970s.
Even in older homes, a few interior design changes can do wonders to attract younger renters. Next time your property turns, the following affordable updates may be worth considering:
- Millennials are big on customizing their spaces to reflect their individual style. Allow tenants to paint the place whatever color they like. Not ready to hand over that much freedom? Permitting your tenants to paint an accent wall may be alluring enough.
- Replacing cabinets and doors is quite pricey. For the look of a custom makeover without the high cost, give cabinets and doors a fresh coat of paint, too.
- Speaking of cabinetry, how does the hardware look? People spend a lot of time in the kitchen and will likely scrutinize this space. Swap out your cabinet and drawer pulls/knobs for a brand new set. Try brass for a vintage feel or chrome for a sleeker look. You can find trendy (and affordable) hardware at places like CB2 and Anthropologie.
- Update the lighting fixtures. Switching out an old lamp or chandelier can brighten up (pun intended) an entire room. You can keep things simple and just add a dimmer, or go all out and install a smart lighting system. If that’s too big of a project, upgrade plastic light switch plates to ones made of filigreed ceramic or warm wood. No idea where to start? A task like this is right up your property manager’s alley.
- Install smart home technology. Millennials are notorious for loving their gadgets, and these days it’s easier than ever to add some smart home tech. A few great choices include a keyless smart lock, the Philips Hue smart lighting system, or a smart leak detector that could potentially save you hundreds (or thousands) in water damage. Smart home capabilities are expanding by the day, and more affordable options are on the rise.
If you're up for a more intensive remodeling project, consider:
- Replacing carpet with tile or hardwood flooring
- Providing more access for natural light
- Open floor plans
5. Make eco-friendly + technological upgrades
Statistically, millennials are more concerned with the environment and are willing to pay more for sustainable products. According to data from the Shelton Group, 90% of millennials will purchase from a brand with reputable social and environmental practices. This mindset carries over into their dwelling decisions as well.
Reducing your property’s carbon footprint will make it more alluring to millennials, and it'll help the environment to boot.
Here are a few tips to make your rental greener:
- Put in solar panels. This is a sizeable upfront investment, averaging $11,200 to $14,400 after tax credits. However, thanks to government incentives, rebates, and lower electricity bills, solar panels can also lead to substantial long-term savings. Depending on where you live, this could range from about $13,000 to $50,000 over 20 years according to Energy Sage, an online marketplace for comparing solar energy quotes. Energy Sage also claims the average U.S. household can break even on their solar energy system in just over seven years.
- Install low-flow toilets to reduce water usage.
- Make other energy-efficient enhancements that cut down on heating, cooling, water and lighting costs. This could potentially save you hundreds, even thousands, of dollars each year. Adding a smart thermostat is a logical (and relatively affordable) first step. Other low-cost improvements include sealing uncontrolled air leaks, planting shade trees, and installing storm windows.
- Use low- or no-VOC paint. VOCs, or volatile organic compounds, are found in traditional paint. Many VOCs are known carcinogens. These harmful chemicals can lead to poor indoor air quality and health issues down the road.
6. Provide an in-unit washer and dryer
Whether or not you should have a washer and dryer in your single-family rental is a great debate among investors. Some investors opt out since they will be responsible for fixes if anything breaks. Others argue it’s relatively easy to find inexpensive used washers and dryers on sites like Craigslist.
That said, if you’re looking to attract millennial renters (or any renter for that matter), a washer and dryer unit will always be a huge selling point. If you’re still on the fence, talk to your property manager about the local market and what the competition looks like. Is your rental located in an area where most tenants would consider the absence of a washer and dryer a non-starter? Or is it not as common?
For additional perspective, check out the conversation on this BiggerPockets forum.
To attract millennials to your rental property, it’s imperative that you adjust your marketing and methods to better fit their needs. With a few changes in how you manage your tenant relationships and some physical alterations to the property, you’ll be well on your way.