The concept of ‘rent-vesting’ has grown the past few years with more and more millennials turning to investing in the property market and renting their homes rather than buying to live in. With the median house prices growing in major cities around the world, the most common drawcard is the ability to purchase a home without lifestyle commitments.
Lifestyles choices play a huge role in owning a home and for millennials, dream location and proximity to public transport, place of work and bars and restaurants generally means living more central. However, the costs associated with purchasing in a central location can be much more unaffordable. ‘Rent-vesting’ allows Gen Y’s to live in a location that suits their lifestyle and purchase property where it is more affordable. Regardless of how far away that may be.
So what are these young investors looking for in property?
There is a lot of talk about millennials unable to get into the property market because of market prices. However, according to market research, in Australia the younger generations are much more likely to take risks than the generations previous.
With rent-vesting, millennial investors are looking to purchase in more affordable locations, which could mean small family homes further away from city centres or small apartments close to or in a central location. Making house and land packages and affordable city apartments of interest.
Generation Y have been raised with technology in the palm of their hand and searching for investment property is no different. Millennials, being as technology savvy as they are, are less likely to search for property through offline channels and are more inclined to want information immediately. Projects need to be accessible online, easy to understand and able to request more information, all from a smart phone. Providing mobile friendly information and brochures is more likely to get the attention of a young investor.
‘Rent-vestors’ are less likely to keep an investment property for 15+ years to watch it grow. They want a fast return over a shorter period, to be able to sell and move on to the next. While many ‘rent-vestors’ are not looking to have a large portfolio of investment properties, not yet anyway, they may want to diversify and change their investment should they not see a return within a few years.
Ease of management
Convenience is a large part of the Gen Y culture. The purchase process should be as simple as possible. Young investors are more likely to be attracted to ‘hands off’ type investments like fully managed properties, if available.
While millennial investors may be one you’ve missed in the past, don’t let the media hype on affordability deter you from attracting a younger audience to your project. Adding these four elements to your project marketing strategy can help widen the scope and appeal to a wider range of clientele, across many generations.