I find that young workers often want to live in trendy urban neighborhoods surrounded by friends. But that dream has become increasingly unaffordable in recent decades. Over the past 20 years, the average rent in almost every state has increased more than income. Many have been forced to live further away from their jobs – and major restaurants, bars and entertainment venues – than they would like. Others still live with their parents to save money.
Yet the lure of big city life persists. It started with Gen X in the 1990s and grew with Millennials and Gen Z. The 2020 census showed that metropolitan areas increased their population by 9% in the decade since 2010, while rural areas only did so by 1%.
Urban amenities are at the top of the list of reasons cited by Gen Z (also known as “Zoomers”) and Millennials for their residential preference (subscription required). City-dwellers between the ages of 25 and 44 want easy access to public transport and live in areas dense with restaurants, bars, shops and entertainment.
For many, city living has become a lifestyle preference. And that creates opportunities for landlords across the country.
To afford living in these bustling cities, today’s young professionals are increasingly willing to live with roommates they’ve never met before. A Credit Karma survey found that 43% of Gen Zers have lived with roommates they didn’t know before, compared to 31% of millennials.
When renting to younger tenants who are willing to share a communal kitchen, laundry room and outdoor space in exchange for cheaper rent, landlords no longer have to go through a complex construction process to divide their home in self-contained units with kitchens and private entrances. . A landlord who rents to multiple tenants can offer each a discount – compared to a one-bedroom apartment – while still collecting more from the group in total than from a solo tenant. In fact, colocation spaces can drive up to 38% rental premiums per square foot, compared to traditional apartments.
Forward-thinking landlords can use new technologies to reach younger tenants seeking those more affordable and social lifestyles in urban areas. While many roommates are still on classified sites like Craigslist, the process of meeting, choosing, and vetting roommates can be done through interactive online services like the one offered by my company, which matches tenants based on their life preferences, such as ages and genders. of their roommates, how much time they would like to spend with roommates, and if they have pets. For landlords looking to rent out spare rooms for long-term stays or entire properties shared among multiple tenants, platforms like my company’s offer artificial intelligence (AI)-based pricing technology and targeted marketing to quickly fill homes with reliable tenants.
PROVIDE APPROPRIATE AMENITIES AND ENVIRONMENT
One way to make properties attractive to younger tenants, aside from location, is to recognize their technology and environmental concerns. Gen Z tenants can appreciate spaces equipped with thermostats and smart devices, including door locks and keyless entry. App-based systems for home entertainment and reservations are also a plus. Beyond that, homeowners could consider electric vehicle charging stations, install high-efficiency appliances and LED lighting, make recycling options obvious, and maintain communal gardens. All have been identified by real estate marketers as amenities young renters are starting to seek out.
The irony of city life is that people are often alone, even when surrounded by people. Even before the coronavirus pandemic, nearly 80% of Gen Z Americans reported being lonely. And of course, social distancing amid COVID-19 has exacerbated those feelings of isolation for many young Americans. Colocation arrangements ensure you’re never without a community, and they have the potential to be particularly friendly to Zoomers looking to live on their own for the first time.
Indeed, colocation offers an elegant and humane solution to today’s rental market, with favorable economic conditions for everyone involved.