The housing market is significantly impacted each time a new generation reaches adulthood and begins to explore housing options. Think back to the Baby Boomers, who were so vast in number they sparked an entirely new construction boom. Next came Generation X, which stimulated its own boom in a housing sector that reached near-bubble proportions due to easy and aggressive financing.
Fast-forward to today, where the newest generation – Millennials – are a part of the buying mix. These individuals range from 37-year-olds who are already on their second home, all the way down to 20-something first time homebuyers. In addition to facing an inventory strapped market, Millennials enter the housing market with additional challenges that include heavy student debt and having graduated college during a recession.
How are Millennials dealing with these challenges? As a generation that saves, Millennials will put down the 20 percent needed to secure a mortgage to avoid falling victim to the housing finance bubble their Generation X predecessors faced. And, with the advent of the Internet, Millennials are a tech-savvy generation that thoroughly researches home-buying in ways not possible before. Finally, they are a generation that will network with friends and peers to find the best possible home, with all the desired upgrades, at the best possible price.
Why should house flippers target this generation? Millennials have already dramatically impacted the rental market, and with their increased disposable income many are ready to move from renting to buying. In fact, they already account for more than 34 percent of buyers in the market. If your investment strategy includes both rental and fix-and-flip properties, you may already have your ideal buyers at your fingertips. Please note that this group is highly social, which means they write about every experience – and their friends will take those comments as “recommendations”. The result of all of the above is that the Millennial generation has enormous buying potential, making up 66 percent of first-time home buyers (see this article).
What house flipping strategies should you employ to appeal to Millennials? Make sure you’re repairing and upgrading kitchens and bathrooms, as these areas of the home are of particular interest to this generation. Also, Millennials are “green” minded, so consider energy efficient appliances, windows and HVAC systems that are environmentally friendly. Also, consider installing high-tech, programmable features that can run from a smartphone. That will add an element of surprise and delight for what is already a “plugged-in” generation.
And finally, before you get too far down the road with Millennials, don’t overlook Generation Z. These young adults are already starting to rent, and it won’t be too long until they are ready to purchase their first home or property.