Millennials entered adulthood during or in the wakes of The Great Recession, with massive student loan debts, a housing market that collapsed like a house of cards, and the income inequality is at a five-decade high. They seem to have little trust in lenders and housing markets. To some extent, they feel betrayed as the system they were brought up in appears to have shattered into a thousand pieces.
Inevitably, the Gen Yers need places to stay (no more parents going to court to evict their children, please). Still, they are not willing to follow in their parents’ footsteps.
As the housing market is facing a generational shift, the real estate market must adapt to reach the world’s largest living adult group. But how to do so successfully?
The first step is getting to know them a bit more:
- Millennials have grown up in a world that stresses convenience. Speed, efficiency, and availability are judged continuously and thought about. They don’t want any hassle.
- Millennials have grown up in a world of choices, making them feel like they are in control.
- Millennials focus on experiences rather than things.
- Millennials are, to a large extent, digital natives, born into a world of technology, and thanks to the increased exposure, the way they interact and respond to digital devices has changed.
Half of all Gen Yers live in rental apartments, and according to a study, 45 percent of the 630 renters taking part in the survey moved at least twice in the past three years. To some, this might seem grueling, but when asked about the appeal of renting, tenants’ ease of mobility is crucial, along with landlords’ responsibility for maintenance and repairs.
Given this information, real estate actors could benefit from developing accommodation that goes in line with Millennials’ expectations and perceptions of the world. Through smart rental apartments with connected digital devices, real estate actors can attract Gen Yers while facilitating maintenance and security.
Flexible, secure, and smart homes
In smart homes, the gadgets don’t come as DIY but are preinstalled in all apartments. For tenants, this means move-in ready properties with, e.g., thermostats, lights, and door locks. No hassle.
For building owners, this means simplifying moving in and out-processes, and a possibility to reset installments for new tenants.
Smart apartments also provide building owners with control of common areas and monitor access into buildings, ensuring safety.
They can also save money by, for instance, leak sensors to prevent leakages – something that otherwise cost building owners an average of $3,500-$7,500, but may amount to much higher sums.
Digital solutions are affordable investments that will profit both building owners and tenants. For example, a Sensative customer measures temperature in all apartments and shared spaces with Strips MS +Comfort for LoRaWAN to gain energy efficiency insights from their extensive property portfolio. The data is consolidated using Yggio. The expected result is 4% savings on energy cost per 1°C lowered the temperature by just manually adjusting heating based on this knowledge.
The maintenance of digital devices and sensors should be taken into consideration. Most sensors are battery-driven and will have a life span that must be taken into account. Long battery life makes a huge difference. Batteries are cheap, replacing them is not. Sensative’s custom-designed batteries last up to 10 years without maintenance.
Smart homes are thus not only here to let people in or monitor lighting in common areas but to tell when maintenance needs to be done. This contributes to the experience of living in a smart home, where tenants don’t need to think about changing light bulbs but instead can focus on living and thriving.
Working from home is the new normal
Today, the home is more than just space where you lay down and go to sleep. It’s a place where you socialize, and it’s therefore essential that smart homes enable residents to create communities.
Also, people work from home. 31 percent of Gen Y renters say that a home office space would be important when considering a new lease. The present situation, with the pandemic caused by Covid-19 and lockdowns of cities, puts pressure not only on individuals but on their homes as they have to work from there.
If apartments are not already adapted to support work from home, they certainly have to be from now on.
And as for tenants: is there a correlation between usage and long-term retention of residents? The more they may be using smart homes; do they tend to stay longer in the building because they are happier?
To sum it up
Millennials are a growing customer base in the rental market given that real estate owners can provide them with homes aligned with their expectations of efficiency and their commitment to, and interaction with, digital devices.
By incorporating smart technology and developing properties where residents can create communities, building owners can profit from increased efficiency, and tenants will feel at home, building relationships, and staying long-term.