by Theresa Bradley-Banta
If you talk about real estate investing to most people these days, they will probably shake their head and shudder at the thought. The Great Depression changed how the United States economy functions. Recovery was slow, and those who survived it lived the remainder of their lives with a unique perspective that no other generation will ever have.
Most people alive today remember the collapse of the housing market. They grew up believing that real estate is always a good investment because they aren’t making any more of it. The recent housing market collapse completely obliterated the traditional American dream of home ownership for many people.
As people recover financially and feel more optimistic about their future, they do so with an altered perception of the term “home” and real estate.
The Millennials factor
These young people are more community-minded than any previous generation. Many of them prefer living within walking distance of work and shopping rather than having a large luxury vehicle to transport them from point A to point B. These same millennials make paying down college debt a higher priority than home ownership. The home ownership rate for those 35 years and younger has dropped from 43.6 percent to 35.9 percent over the past ten years. They appreciate the many amenities of apartment and condominium living.
This shift in attitude toward renting has provided sustained momentum for multifamily investments. Renting an apartment is not viewed as a dreaded first step they must take prior to actually owning a place of their own.
Many of these young people watched their parents lose a home they had spent years working to maintain. Even if their family home did not fall into foreclosure, these Millennials saw the amount of stress that can come along with a mortgage. As a result, many of them see renting an apartment as freedom from the financial burden that comes with owning a home.
Investors must understand what is important to Millennials
Freddie Mac’s U.S. Economic and Housing Market Outlook predicts that about 8.3 million new millennial households will be formed between now and the end of 2018. These young people understand the importance of higher education. Many of them earn a comfortable living well above the median household income for the United States.
Millennials embrace living near employment and entertainment centers. They look for ways to live green and leave a small carbon footprint. Owners of multifamily properties must consider the amenities and features that are important to these young tenants if they wish to remain profitable in the current and future housing market.
Related articles:
5 Extraordinary Ways to Market and Lease Apartments
Reduce Multifamily Operating Costs With Green Strategies
Multifamily Tenant Retention Strategies
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