The renter’s pool, at the moment, comprises of three separation generations with very different characteristics. To get a high return on your rental investments, you need to understand the dynamics of these three generations. Here is an elaborate explanation of these dynamics to help you understand your renters better.
First up is generation X, born between the late sixties to 1980, they are in the age range of 37 – 52. Generation X takes up 28% of the renter’s pool and is stuck between taking care of their parents (baby boomers) as well as looking out of generation Y, which at is having a hard time paying off student loans and flying the coop. Generation X comprises of the most educated people in the US but got the lousy end of the stick due to job loss and the housing crisis. Their contribution to the renter’s pool is largely because they got stuck with bad credit and no savings.
Between working for their bad credit and saving up, owning a house is going to be a hard thing to do, so renting seems to be the only option. Unlike generation Y, generation X is up-sizing instead of downsizing when it comes to renting as they have two generations to take care of. With high rents, it is going to be tough to save up for down payment, so their contracts are going to run long with the landlords.
Most of generation X prefers to explore the web to find their rental properties, only a fourth of that portion goes to direct contact with the landlords and a fraction would go hunting for yard signs and open houses. Generation X is well connected through social media platforms, and they use these platforms to keep know-how of the world rather than posting about their life.
Generation Y is famously known as the Millennials; they in the age range of 22-36 and were born between 1981 to 1995. This generation dominates the renter’s pool by 56% and is struggling with student loans, technology dependency as well as being entitled.
To Millennials renting is the safest option, and most of them aren’t even contemplating the idea of home-ownership. With renting, they get all they need at a more accommodating price than home-owning. Despite their loans and other issues, Millennials are also decent renters. Millennials have a good reputation of being very punctual with their rent payments.
This is the generation that is glued to their computers and phone, it’s no wonder that 90% will look for their renting options online, 60% would go with recommendations of family, friends, and neighbors. The following are the reasons why most Millennials prefer to rent than own.
- Management is responsible for maintenance
- Flexibility of contract
- No long-standing commitment
- It’s more affordable
- No long term investment
- Bad credit
Generation Z Renters:
Now, this is the generation being brought up by the Millennials; they are the future of the renting pool. This generation is just entering the renting pool and ages between 7-21 years. These people are well connected, were born with technology, and are overachievers. They were brought up to work hard and pay harder.
For Generation Z it’s all about mobility and privacy; they are much like generation Y when it comes to renting. They are going to face the same high rent, loans, and tuition fee issues as the Millennials did, so home-owning and kids are for later life. Unlike generation Y, generation Z prefers human contact while looking for rental properties.