Among the most important things for any real estate investor to know is the way that their target buyers behave in the market. In other words, you know who you want to sell or rent property to — so what are the things those people are most likely to look for when shopping around? As an example, if your target were baby boomers, it would be ideal to understand the areas in which they tend to buy, the types of properties they choose, and the average price paid. That would allow you to target your investments smartly, enabling you to reach your target buyer. What trends with millennials and real estate?
Today, the up and coming buyers in the market are millennials. As much as 31% of people buying homes today are millennials, and nearly three million millennial households will enter their 30s over the next decade — a key time to look for a home. Targeting millennials sounds like a good idea, but many will tell you that you can’t only stick to conventional wisdom. The millennial generation has a unique set of buying habits when it comes to real estate. Understanding those practices can help you to capitalize on this market as it will only continue to grow in the coming years.
What are Millennials Buying?
First, what kinds of properties are millennials buying? While it’s true that millennials make up just a little over one-third of the buying market, more buyers are entering the market all the time as their career opportunities grow. Millennials are trending towards buying homes which are more suburban and less clustered on the chaotic centers of city life. However, traditional single family homes are still a good investment as many millennials buying properties still select this mainstay of the market, likely due to their excellent value as “starter homes.”
Millennials are so far buying less expensive homes than older adults. This may be due to them carrying a combination of low funds and high student debt. This presents opportunities for turning over an extensive inventory of inexpensive homes. With the right upgrades, a property can easily be made to appeal to millennial buyers. Plus, many homes built post-WWII are in dire need of upgrading, leading to a surge in urban rehabs.
How do Millennials and Real Estate Find Each Other?
So we know what kinds of homes millennials purchase. How do they find them? More than any other group, millennials rely on technology, especially mobile devices, to search for real estate. Websites such as Zillow and Trulia, have suddenly dominated real estate searches, and social media is now indispensable in real estate marketing. Put plainly; investors absolutely must engage with technology and social networking to successfully target millennial buyers. The National Association of Realtors points out that more than half of millennials look for homes via mobile apps. Approximately one-quarter of those eventually finds the home they purchase through those avenues. These habits are essential to understanding the direct connection to millennial buyers.
Opportunities for Real Estate Investors
As more and more of this generation seeks the stability of a home purchase, real estate investors have an excellent opportunity. The market is growing and becoming stronger each year as millennials age. Researching and understanding millennial habits will enable you to make informed choices on which properties to purchase and how to rehab them for sale. From social media to loving the suburbs, there’s plenty to learn about Millennials and Real Estate.