How to Successfully Sell Property to Millennials
In real estate investing, if done correctly, fixing and flipping properties is a great way to see strong ROI. Purchasing low-cost properties, rehabbing them, and putting them back on the market can be a great strategy for those with the right approach.
However, in addition to creating a lovely property with desirable features, one of the biggest factors in an effective fix and flip is knowing your audience. If the market you’re working in is largely aging adults, you’ll want to focus on different things than you would if your neighborhood is primarily young families – and this mindset is more important than ever as more millennials dive into the home-buying process. In fact, at 36% of the market, more millennials are buying homes than those in any other generation.
Who Are Millennials?
As the name implies, the millennial generation (also referred to as Generation Y) is defined by the turn of the century. These young adults were tweens, teens, and college students when the clock struck midnight on January 1, 2000. They lived through the changes following 9/11 and were deeply affected by the Great Recession; both of these events were defining cultural shifts. Coming of age was centered around the growth of digital technology, with adolescence dominated by the rise of the internet, email, smartphones, social media, and texting. All of these factors have led to a group of young people who are curious, skeptical, passionate about social issues, achievement-oriented, and dedicated to diversity and paving a unique path.
Sources disagree on the start and end date of the millennial generation, but most authoritative bodies, like Pew Research, the American Psychological Association, and Ernst and Young agree that millennials are those born between 1981 and 1996. The U.S. Census Bureau uses birth years 1982 to 2000. Nevertheless, regardless of which specific years are used, today’s millennials are in their mid-20s to late-30s – the age at which most people begin considering settling down, having children, and buying a home.
Concerns Facing Millennials
The Great Recession in 2008 was deeply influential on the millennial mindset. Starting when millennials were between the ages of 12 and 26, the credit crunch and steep economic decline affected career growth, job prospects, and educational paths. Many millennials, particularly those who finished college around this time, found themselves unemployed or underemployed, resulting in years of lost career progress, stagnant savings, and a delay in life choices like buying a home and having children.
The major concern for millennials involves financial stability. Due to the effects stemming from the 2008 financial crisis, many millennials feel that buying a home or starting a family are not feasible objectives. Years of stagnant wages has affected the millennial approach to work; instead of the tradition of loyalty to an employer engrained in the Boomer generation, millennials are more likely to leave jobs after two to three years in favor of upward mobility and increased compensation. Regardless of this trend, however, many millennials feel they are behind in savings and 37% don’t have a retirement savings at all. Most millennials are also still facing steep student loans. As the price of college has increased exponentially, it’s very difficult for the average student to put themselves through school solo.
Facets Affecting Millennial Home-Buying
While a vast majority of millennials still rent, the millennial generation’s presence in home ownership is on the rise, creating a new market for investors to consider. However, fixing a property to millennial standards is different than targeting a different demographic. If you’re planning to sell a home to a younger audience, you need to create a property that appeals to generational wants and needs.
The Integration of Technology
As a generation raised on the internet, technology is extremely important to millennials. This goes beyond things like cell phones; millennials purchasing homes often want to see smart features integrated that will increase quality of life. Millennials are far more likely than older generations to choose options like Amazon Echo devices, smart thermostats that automatically adjust temperature or allow for remote access, smart security systems with cameras accessible from mobile devices, smart doorbells to see who is coming to visit, or smart locks that make sure you’ll never forget your keys again. While some millennials generally dislike these advances, incorporating technology is far more popular than not among younger adults.
As a real estate investor, you don’t necessarily need to install all of the kinds of smart technology buyers may want – for example, purchasing a smart refrigerator for a property is probably not necessary – but be sure any changes you make can accommodate potential upgrades. Things like smart controls for a home generally require modern wiring and appliances, so keep this in mind as you make buying decisions or weigh the pros and cons of specific upgrades.
Open Floor Plans
Small, fragmented, and disjointed homes aren’t often appealing to millennials; instead, wide open spaces reign supreme. Homes with open plans appear more modern and up to date, creating an impression that matters to those used to keeping up images.
Open concept homes don’t have a defined floor plan and rooms blend together, creating larger areas for living, relaxing, and enjoying time at home. These homes often feel bigger than those with segmented rooms, making it easier to socialize and spend time together while doing things like making dinner, watching television, and hosting parties.
A part of this fascination may be the fact that most millennials aren’t as free with spending as older generations, in large part due to the impacts of the 2008 credit crunch, high underemployment rates, and stagnant wages. In a home that feels bigger, the impact of a reduced income and smaller footprint feels more manageable, even as families grow.
A Great Location
While the suburbs have long been popular among Baby Boomers and Generation X, the opposite is true for millennials: overwhelmingly, Generation Y likes urban living. Proximity to major metro areas is very important to younger people, particularly as gentrification ramps up in cities of all sizes nationwide. Instead of long commutes, millennials like to make the most of their time not spent at work. This means a location near stores, restaurants, and recreational activities.
There may be a few reasons for this preference based on both economic status and social awareness. Some young people work long hours to make up for underemployment, with many taking part in the gig economy in their downtime, like driving for Uber or Lyft. When commutes are shorter, it’s easier to find more time in the day, giving millennials more to work with when attempting to plan and organize busy schedules.
Millennials, in general, want to take a greener approach to everyday living. This includes energy-efficient appliances, windows that reduce the need for excessive heat or air conditioning, sprinkler systems that save water, and low-flow toilets and shower heads.
In making purchasing decisions for your fix and flip, it may help with the Generation Y generation to show eco-friendly alternatives to traditional avenues for upgrades. This can mean choosing appliances that are Energy Star-approved, going with countertops made from recycled materials, installing eco-friendly carpet, picking energy-efficient windows, and other such opportunities.
Create Comprehensive Profiles
Less isn’t more when it comes to millennial buyers. The average millennial does comprehensive research online before buying anything, from a new sweater to a new computer. A house is a much larger purchase and thus requires even more due diligence.
When millennials house hunt, they want to have access to as much information as possible. A simple listing of amenities won’t do; instead, cater to millennial buyers with as much info as you can, including school districts, room dimensions, appliance age, and anything else that might be relevant. If you’ve taken a green approach, be sure to include this, too.
Provide Video Footage
For real estate property sales, a picture may say a thousand words, but a video says even more. In a world where everything, from brunch to family outings, is shared online in photo form, a lack of pictures from many angles is a bad sign to younger adults. Before taking time out of a busy day to schedule appointments, millennials want to be sure they’re not going after the wrong property.
Videos can be immensely helpful here, providing a view that’s otherwise unavailable. If it’s in the budget, consider drone footage to survey the property from above or a virtual walkthrough to provide an experience as close to an open house as possible. This may seem like a big investment, but going above and beyond can be what it takes to attract millennial attention.
As the millennial generation continues to age, millennials are becoming a primary demographic for new homeowners. As such, targeting this market can be a benefit for investors. However, due to the differences between millennials and older age groups, you’ll need to adjust your sales strategy. There’s a lot you can do to make your property more enticing for Generation Y and some of these suggestions may result in a quicker sale.
Scott Clift is a licensed real estate broker with Westpark Loans. He has been in the real estate industry since 1994. His team of seasoned professionals specialize in providing real estate loans for investors and other self-employed individuals. When you are ready to invest in real estate, call Westpark Loans to secure your financing at (844) 574-LOAN or by visiting westparkloans.com.