Reasons Why Millennials Choose to Rent vs. Own a Home

Rent or own

Deciding whether to rent vs. buy is a dilemma faced by every generation. Unlike most of the generations before them, millennials seem to favor renting over buying. Here’s a look a few reasons why millennials choose to rent vs. own a home and what investors can do to better target millennial home buyers.

Reasons Why Millennials Choose to Rent

Higher Student Debt

Most millennials graduate college with quite a bit of student debt. For many, this debt makes it much more difficult to gain financial independence. Therefore, many continue to live with their parents or to rent an apartment with a group of friends. Home ownership does not seem feasible to them given their monthly debt obligations and the impact that high debt may have on their  ability to obtain a home loan.

The Flexibility of Renting

One of the main reasons why millennials choose to rent vs. own a home is the flexibility that it affords. When renting, it is much easier to pick up and leave. Whether it’s to move jobs or to adapt to their changing lifestyles, the ability to make those changes is very appealing to millennials.

Less Commitment

Renting is also less of a commitment than buying a home. Millennials are getting married later in life than previous generations. Their focus is less on commitment and more on other experiences. Homeownership doesn’t necessarily fit into their mindset at this stage in the game.

How Can Investors in Southern California Target Millennial Homebuyers

Although the majority of millennials are not focused on buying a home, there are still a percentage that are able and willing to buy. These potential homebuyers understand that home ownership is the pathway to financial freedom and prosperity. So, how can Southern California real estate investors target millennial home buyers?

  • Design for Their Lifestyle
    Millennials are not handy. They prefer to have move-in ready homes that require little maintenance. This makes them the perfect target buyer for fix-and-flip properties.
  • Market Using Social Media
    Millennials are the social media generation, so to reach them, real estate investors must utilize social media in their marketing efforts.
  • Use Visual Marketing
    Millennials want easily accessible information. When marketing a home to millennials, it is important to focus on photos, videos, and virtual tours. Make the home appear amazing without a potential buyer needing to step foot in it.

The number of millennials choosing to rent vs. buy will slowly shift over time as that generation gets older and/or they become more focused on the many benefits of owning a home. Marketing to millennials does not exclude other generations. Therefore, it’s a great way to expand the buyer pool for homes marketed by investors. Millennials are the future. Investors who adapt their renovation and marketing efforts to them now will be well positioned for current and future success.