We’ve talked a lot about millennials on the Memphis Invest blog. That generation, roughly spanning college graduates to thirty-somethings, are the up-and-coming generation that gets a lot of flack in the world of real estate. Post-recession, they took a lot of blame for lack of recovery: namely because they weren’t buying homes.
We’ve talked about how a combination of student debt and wage stagnation has kept them from saving for down payments and how shifting lifestyles has kept them renting. No matter how we as real estate professionals feel about millennials, it doesn’t change the fact that this generation is important—particularly when it comes to real estate.
Still, something in us has to wonder: what if all the questions we ask are too narrow? Why are we asking when will millennials finally start buying homes?
We’re so stuck in the old way of doing real estate that we don’t ask new questions.
In the past, the real estate market has relied heavily on first-time homebuyers. So naturally, we wonder when millennials, who are waiting later and later to enter homeownership, will buy. But is that what we need to ask?
Is that where things are headed anymore?
What if millennials are redefining real estate as we know it?
Inman recently published an article stating that millennials are poised to disrupt real estate as we know it, citing that the old reasons to buy, for them, are outdated.
Instead of buying, millennials are:
- Looking for rentals that are close to work and play.
- After rentals that provide flexibility and convenience.
- Not interested in being tied down by a 30-year mortgage.
- Choosing to reinvest money that usually would’ve been for a down payment in other ventures and businesses.
- Not as concerned with possessions, ownership, and keeping up with the Joneses.
This generation, more than any other, is set to change how we’ve been “doing” the real estate business for decades. Just in the past few years we’ve seen so many innovations in the industry that have caught fire from other sectors, like crowdfunding, and it’s only going to keep changing from here.
With the state of the real estate market where it is, things are going to have to shift and adapt to changing needs and desires. Right now, many millennials are choosing to rent rather than buy; that’s not to say there isn’t a significant portion that still want to buy some day. But the needle has definitely shifted.
The American Dream doesn’t involve homeownership like it used to, and real estate professionals would do well to recognize and adapt.
The Shift from Homeownership to Flexibility
Well. To renting, really. This shift is obviously good news for those of us in the real estate investment game: it means that demand for rentals is going to continue to go up. It also means that as renting becomes more of a norm, things like affordability are going to become more of an issue in face of the current wage crisis.
It also means that competition is going to move in.
When the recession hit and investing in real estate was easy, there was investors flooding the market. While we can’t say that that situation will be replicated, we can predict that as renting grows in demand, it will become an even more attractive way to invest. So get ready to start throwing elbows again, particularly in hot markets!
This is where having a turnkey real estate investment company on your side really works for your advantage. You don’t have to deal so much with the pains of bidding wars and scouring tight markets for rental properties.
More than just finding properties, however, it also means real estate investors would do well to work to stand out in their field. What is going to make your properties better than the rest? What’s going to keep your tenants coming back? What’s going to separate you when the supply of rental properties grows to keep up with demand?
Standing Out in Excellence
As a real estate investor, the single best way to stand out in this industry is in excellent customer service. We’ve said it once, we’ll say it again, and keep saying it: Customer service that goes above and beyond to serve your tenants and give them a top-notch living experience is worth it. Premier property management is worth it.
That’s how you get ahead in real estate investment! That’s where you should never cut corners. When competition heats up, excellence in management is your ace in the hole.