Smart investors are always reevaluating the group which retains the largest purchasing power paired with the highest demand for housing. As one such smart investor, you should know that millennials are both trendsetters and trend followers, the majority of whom would much rather rent in a chic urban neighborhood than purchase a starter home farther out from highly desired locations.
This millennial philosophy can be extremely advantageous for rental property owners as urban markets are known to offer excellent returns at consistent paces. You probably think you cannot afford urban rental property and you might be right. However, it is worth examining the surrounding suburban territories of popular urban markets, especially since the majority of millennials are moving away from cities rather than directly to them.
The problem with the "I can have it all" optimistic millennial spirit is that no one can afford "it all". Therefore, skyrocketing urban real estate prices are forcing millennials into a more suburban lifestyle which still affords them all the chic experiences just minutes away in "the big city".
Related: 6 Reasons to Own Rentals
Here's the deal: not all cities have infrastructures which can effectively support the number of cars on their roads. The once romanticized concept of walking the city while sporting a Starbucks mocha latte really isn't all that practical when toting a laptop, cell phone, purse and maybe even a child who must be dropped off at school on the way to work. It all sounds great, but just wait until a torrential downpour occurs during your five-mile walk to to work. Not so sexy, is it?
There is, however, another side to the coin in that many millennials are opting to choose professions which allow them to work from home. They really don't have a need to be IN the city as it has now become more of a distraction from work than a chic urban oasis.
In closing, city life is not always conducive to child rearing. Millennials know that kids need bedrooms, therefore more square footage is required. Space is a premium city commodity and demands a high price. Millennials also prefer safe, more organic environments, better schools and neighborhoods akin to those of their own upbringing.
There is obviously cash flow waiting to be collected by smart rental property owners and ambitious investors. Millennials will pay you in Suburbia for what they cannot afford in the city!