The millennials are a generation full of distinct characteristics that can seem intimidating or puzzling to advisors who are unfamiliar with the age group. However though, these twenty-somethings are savvier than you would think. Convincing them that buying a home is more beneficial than renting or living with parents may not be easy due to several outside factors that have shaped this generation. Luckily, there are ways to educate them on the advantages of buying a home in the long run.
After the Great Recession of 2008, many millennials stayed at home with their parents instead of moving out, with about 26 percent of those residing in multigenerational homes. Convincing the “renter” generation to buy a home after this financial crisis might not be easy. Lack of money due to student loans and a false sense of security after watching housing markets dip and rise over and over in the Great Recession leaves millennials in no hurry to purchase a home.
Fortunately, the only tool you need is the one thing millennials are no stranger to- technology. SpatialMatch, a real estate search engine, may help you match the lifestyle needs of potential home buyers. This tool can help you match neighborhoods that your client is looking for, also allowing you to take screen captures of their matches you can share to help in their decision.
Millennials often do not see the financial benefits of owning a home. According to U.S. Census data, millennial homeownership dropped to 32.6% in 2014. This could possibly be because many millennials view homeownership as a commitment they are not willing to take on. However, it is still important to show them the possible benefits they may come across if they do decide to buy.
One of the major key benefits is that in the long term, buying could, in fact, be cheaper than renting. Renting may seem cheaper at first, but if your client were to buy a home, the interest portion of their mortgage will lower and eventually cost less than paying rent.
As an added bonus, they would be paying off their own asset, as opposed to their landlord’s. This gives them something to work toward instead of jumping from place to place waiting to settle down. Eventually, most millennials will want to buy a home, so make sure so ask- why wait?
It is a no brainer that with owning your own home comes freedom, but some might not know what those freedoms entail. Showing your millennial clients the advantages of owning their own home is just as important as teaching them about the financial advantages.
One thing you could point out to your client is the opportunity to make their own home improvements. They can alter their home all they want to fit their cosmetic and functional needs. A report done by Houzz found that 62% of millennial homeowners had renovated their home and 58% made repairs to it. Renting a house, or living with parents, does not always provide this opportunity. Additionally, making improvements can increase the value of their home when they do decide to sell.
As more millennials enter the housing market, they tend to opt into renting as a flexible alternative to buying. Along with this, these Gen Yer’s are also trying to get back on their feet, paying back student loans and other debt. These factors make living with parents after graduation more appealing financially. Despite these drawbacks, educating your clients on homeownership can help them overcome their fears.
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