While renting used to be considered the first step towards settling into a family home, more and more millennials are seeing it as a less of a stepping stone and more of a lifestyle choice. ‘Generation Rent’, as they are now more commonly referred to, are those millennials aged between 21 and 35 who are opting to rent rather than purchase a home. In fact, research shows that millennials aren’t prone to adhering to the traditional view that home ownership is a means to acquiring financial equity. So why the attitude change?
We did some digging and below are five key reasons we found as to why this could be the case:
1. Delaying getting married and having kids
Unlike previous generations, many millennials don’t view settling down and having kids as immediate must-haves, after finishing their studies. In fact, a large percentage are opting to delay marriage in order to figure out what they want from life before making any long-term commitments. As a result, the traditional trajectory of securing a family home as soon as possible is less of a priority if they are not planning on getting married or having kids in the near future.
2. Securing a bond is near impossible
Anyone who has applied for a bond knows the hoops that need to be jumped through before even being considered a potential candidate i.e. having a low amount of debt as well as a good credit score, to name a few. For millennials, student loans and the rising cost of living are realities that cannot be escaped. Add to that the decline in the likelihood of most having access to the kind of funds needed for a deposit and it’s easy to see why many millennials are opting to rent – even if not by choice.
3. Renting is more cost-effective
The cost of buying and owning a home has steadily risen over the last 10 years or so, causing a massive boom in the rental market across the globe - and not only amongst millennials. That said, when comparing the cost of renting to that of paying off a bond and other costs associated with owning a home – such as rates, insurance, utilities etc. – renting is by far the cheaper (and therefore more likely) option. For millennials especially, having access to the money saved by renting is a far greater priority as it gives them more spending power and the ability to enjoy the kind of lifestyle that appeals to them. Furthermore, for some, renting is the only way that they can potentially afford to live in an upmarket or trending area, both of which are priorities amongst most millennials.
4. Renting offers more flexibility and freedom
Perhaps one of the hallmarks of the millennial generation is their desire for flexibility and therefore resultant hesitancy towards making long-term commitments. Millennials love the ability to “up and leave” whenever a new and exciting opportunity presents itself, and owning a home and being tied into a bond is often viewed as a major hinderance. Renting, on the other hand, offers a greater measure of flexibility and choice, and is therefore a lot more attractive as an option in the eyes of millennials. Furthermore, millennials also tend to switch jobs every three to five years on average, so the ability to consider moving for work or in search of better opportunities makes renting even more appealing, as opposed to being locked into one particular place when owning a home.
5. The landlord will take care of it
Most millennials don’t enjoy the hassle that maintaining a home or property requires of a homeowner. It’s far better for them to place that responsibility onto someone else’s shoulders, hence the attraction to renting and having a landlord take care of most of the associated chores and costs. This allows them the freedom to do whatever they please with their free time and save on property maintenance costs.
Simply put, times have changed, and millennials or Generation Rent are opting for a lifestyle that offers them freedom, convenience and flexibility. Renting a property clearly offers them this in spades when compared to owning a home. If you are a property owner with a home to rent, this could be music to your ears so check out our article on How to make your rental property more attractive to millennials.