It’s hard to look at real estate without looking at the position of millennials in the discussion. The fact is millennials are now at an age that the market considers the home-buying age, and they have proven to look at real estate differently than other generations. Then again, it’s not as simple as saying millennials don’t want to invest in homes. They do want to invest in homes, and this is how they look at it:
More Than Just a Home
Baby Boomers in Wichita knew when they contacted real estate agents that the home they buy should be able to support their lifestyle and growing family. When they purchase, they are doing so with a homeowner’s mindset. They see potential in bare homes and slowly work towards personalizing the property as they live in it. Millennials, on the other hand, are more entrepreneurial in how they want to get things done.
For millennials, real estate is a good investment. It’s their top choice if they could spend money they wouldn’t need in 10 years, and they think about the home purchase as a way of diversifying their business portfolio. It wouldn’t be for their own family, and so they keep the walls neutral and the architectural details exactly how future owners would want them.
For people who are supposed to make non-sensical decisions, millennials actually have ingenious hacks. One particular move they make can be called house hacking, which essentially results in them getting their own place for free. The setup is they will purchase multi-family properties, live in one of them, and offer the others for rent. Instead of just paying for the mortgage on their home, they are getting paid by tenants to essentially live for free. This is, of course, more ideal in certain neighborhoods than others. If buyers are looking for houses in the suburbs, there is less demand for apartments, which makes house hacking ineffective.
One Step at a Time
Millennials may not have everything that Baby Boomers are looking for at the age bracket they’re in right now, but it’s partly because of the market they are in. What they don’t have yet, however, they are slowly working towards. Millennials put great importance in living an adventurous life and paying for experiences, but they are also looking into the FIRE movement. The idea is if they work hard now and earn as much money as they can, they will be free to pursue their passion later, quit their job, and live their life however they please. They want to build their savings first and foremost. Then, they work towards home ownership, healthcare, and retirement. With a goal to retire early, give them a little more time and they will get all their eggs sorted in the right baskets.
It’s easy to judge millennials on the short-term purchases they are unabashedly talking about, even if their spending is not that drastically different from other generations. But they do have a unique way of getting their life together.