Millennials (born in the early 1980s to mid 90s) and Generation Z (born from the mid-1990s to early 2000s) are having trouble “adulting.” That is, doing things that previous generations might have accepted as a fact of life. Paying their own rent, buying health insurance, planning for retirement – to previous generations, this was all par for the course after moving out of their parents’ homes. Not so for young adults under about age 35.
As reported in a recent Forbes.com article, most Millennials and Gen Z-ers feel that high school and post-secondary education doesn’t get them “life ready.” In fact, 40% said that college hasn’t prepared them for, or isn’t preparing them for, the “real world.”
And the real world they face is very different from the one their parents graduated into. These days, we’re living in a gig economy, where short-term and contract positions rule. The gig economy comprises all ages, but Millennials – as the largest age demographic in the workforce, since 2015 – account for the biggest portion. More than one-third of Millennials are independent workers and 32% of them believe they will be working mostly flexible hours in the future.
So what does this mean for property managers? Quite simply, a growing number of potential Millennial and Gen Z renters, many of them fresh out of school and with limited work experience, could be freelancers. And that brings with it a host of complications.
State of Flux: Bracing for the New Wave of Renters
Many freelancers – or even any new worker with student debts – find it difficult to pass a credit check. Not only that, but the majority of potential young renters won’t have tenant’s insurance. According to a recent report from Princeton Survey Research Associates, 60% of 18- to 29-year-olds are renters, compared with just 36% of all Americans. Yet nearly six in 10 of those younger tenants don’t get renter’s insurance.
That doesn’t offer property managers much security. The question is: What can you do to protect your bottom line and minimize the risk of late or defaulted rent payments?
Guarantee a guarantor. It’s important that you require a guarantor for any potential young renters. So make it easy. Make sure that your property website features online applications that can capture all data, including that of a guarantor, in one place. These days, young renters are used to doing everything on the Internet, from banking to restaurant reservations. With 24/7 online access, you can offer young renters the comfort and convenience they’ve grown accustomed to. (Making it easy to apply online also helps lock in a person to their desired unit, even if only psychologically.)
Ensure insurance. Once the applicant and the guarantor have passed the credit check, you need to make it easy for them to secure renter’s insurance. Make it a prerequisite to landing the lease. And be sure to monitor your tenants to be certain that they renew their insurance each year. You can use property management software to automatically track which residents are up for renewal, and send friendly reminders as required. By making insurance part of your property management process, you can protect your renters and your units, as well as your overall business.
Welcoming the Next Generations
Millennials and Gen Z-ers are here to stay, and they’ll become increasingly prevalent in the rental world. That’s a fact. But there’s no reason you can’t get just as comfortable with them on your property as they will be living there. All it takes is the right property management resources.
To learn more about how you can optimize your website and processes to ensure a seamless integration of today’s young renters, sign up for your free account today or give us a call.