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Millennials tend to do their own thing; dependent upon only their whims and wishes. They make their own career choices, live as they please, save as they plan. They are in direct contrast (and sometimes rebellion) of the older generations. ‘It’s just who we are,’ they say.
Another factor that differentiates millennials from older generations is that they prefer renting homes instead of buying. Even those who are approaching the last leg of their millennialism are sometimes found to be renting instead of buying their own home.
Renting Instead of Buying, Why?
Why is this? Why do millennials have such a fondness for renting instead of buying? Below, we list some of the possible reasons:
- It is cheaper
Buying a house doesn’t only involve the cost of purchase. Individuals who are considering purchasing a home must first evaluate the property value and the required funds necessary for any potential repairs needed during the time of purchase. Repairs can be very costly. Other factors involved when buying a house include home insurance, property taxes, and closing fees. In short: a whole lot of expenses.
As such, 4 out of 10 millennials cited affordability as a primary factor in the “renting versus buying debate.” In a survey, 57% of millennials said affordability was the top factor why they would choose to rent. Renting is cheaper and leaves money for gas, food, and other luxuries. Buying a house is shelved as a ‘long-term’ plan.
- It is flexible
Most millennials are heavily career-oriented and are ready to change cities if it means better job prospects. In such a situation, the home of one’s own would be a liability. One would be paying double – one for the rented house and the other for the purchased one. Or have the headache to sell a home, store all the furniture or valuables and then buy a new home in a new city.
Millennials value freedom and renting a property can cultivate this freedom. They can move after their lease is up or even before it. They can leave everything to travel abroad or shift from one end of the country to another for a job. All of these scenarios are possibilities, and it means an individual is unbound. It is providing millennials with great ease of mind.
- I am pursuing/ might go for higher studies
After working at a job for one or two years, most millennials choose to go for a master’s degree and increase personal value in the market by enhancing their skills. Some stay in the country while others fly off overseas. Most of them are aware that the possibility of changing cities for higher studies is highly likely.
Such uncertain circumstances lead millennials to rent a house.
Once someone of this generation decides to enroll for higher education; college fees need to be paid along with buying textbooks and other necessary equipment. Also, job placements or an internship after the completion of the degree might require them to change their home base. Hence, they refrain from buying a property that would only call for more expenses or root them down in one place.
- It’s the only way I can afford this neighbourhood
There are particular areas in every city where every person desires to live one day. The possibility of buying a house in such a domain can seem exceptionally far-off. Many times, the most desirable area to locate the best available jobs also may happen to be the most expensive area. So, millennials go with the more comfortable and more doable option, which is to rent a home in the neighbourhood.
This way, they get to live where they want to for as long as it is possible, without blowing a hole in their pocket.
- I don’t have to worry about home maintenance
Ten percent of the surveyed millennials quoted this as the reason for renting instead of buying. After all, who likes to fix a clogged toilet or mend an overflowing pipe? Early on in their career, millennials do not want to have to worry about maintaining a house and paying for the expenses that maintenance brings.
- I can upgrade any time I want
Whether in terms of a job or another house, millennials want the freedom of going (and getting) the next best thing. They can changes apartments easily in case they find a better one in terms of aesthetics, location, or rent.
With a rented house, they can also change jobs quickly. They are called the ‘job-hopping’ generation, who want to try different lines of work and roles before they finally settle down. Many expect an increase in their income or the level of the opportunity offered, and hence, want to be ready to do whatever it takes for it. A purchased property does not allow this freedom for obvious reasons. Therefore, millennials choose to rent.
- I don’t want debt
Most millennials might finish their undergraduate and postgraduate studies with some level of debt and might be paying it off even as they start their jobs. Buying a house, thus, would only feel like a burden instead of a joyful affair.
Less debt also ensures the feeling as though the individuals can save something and have a higher monthly cash flow.
- I am not concerned about the status of my house
For older generations, the measure of success was how well-settled they were in their careers, in their families, and their savings. For millennials, the measuring stick is a little different.
Most individuals of this generation don’t place much value in a house of their own. For them, it’s more about the connectivity, convenience, and security of a neighbourhood. They want to be able to commute quickly between their home and office and have basic amenities (like the gym and a salon) close by. Everything else becomes inconsequential.
The consequence of this housing behavior of millennials is that many residential developers in cities like Delhi NCR are at a loss as to why their projects aren’t taking off. They assume the market must be slow; in reality, the millennial market is not interested. They don’t have the same plans and buying habits as their parents.
For those in the self storage industry, the millennial population is the ideal market and offers excellent scope for expansion. For individuals that are always on the move and do not have a dedicated space for their belongings, self-storage becomes a valuable investment. It becomes a space in which the few priceless artifacts can be stored, as people move from place to place. In such times of need, a self-storage facility can come to the rescue as it provides a guarantee of security, safety, and storage.
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