There are similarities between the younger and older generations when it comes to buying homes. Both groups are all looking for that extra bedroom or a balcony. However, one key difference is how they would use their properties to generate rental income. Younger buyers put more importance on renting and home-sharing for extra income.
Under 40’s are interested in home-sharing for extra income
Many homeowners under 40 are interested in renting a part of their homes, or even the entire property. This creates an extra income stream to help pay off the mortgage. In the US, for example, 40% of Millennials and 48% of Generation Z buyers said they considered rental income as very important. They are also keen to rent out part of their property while still living in it, coming in at 35% and 42% respectively. They consider it to be more important than buying a smart-home, for example. That’s a large proportion considering home-sharing for extra income.
Interest in rental income decreases as age increases
Gen X buyers between 40 to 54 are slightly less interested in rental income. 29% consider it a very important option to rent their entire property out in the future. 25% consider home-sharing for extra income as important. Unsurprisingly, the numbers decrease as people get older. Only 6.5% of buyers over 55 have any interest in using their home to generate any form of rental income.
Young buyers are more familiar with the sharing economy
There are several key reasons in the generational divide.
- Gen Z buyers are more likely to have recently been sharing rental costs with a roommate. They may even have paid rent to someone in their age group.
- The sharing economy, where people get the most out of homes, cars and other assets, by renting them to others, also factors into why younger buyers are more in tune with the idea of renting out the property, either in part or fully. Millennials are a generation who see sharing as a normal thing.
- Money – there is no denying it that this plays a big part in the attraction of income from rent. Older homeowners generally have larger incomes and more assets that enable them to cover their costs without extra sources of income. Younger buyers also tend to look at large cities, where properties are more expensive. They’re willing to make sacrifices to accommodate the property they want.
How You Can Use This Information
- Make sure you understand the sharing economy and discuss rental income options with younger buyers.
- When you have an idea of how they want to share space, look at properties that offer privacy and are suitable for sharing.
- Learn about the rental market of the area you are working in. Use websites like HomeToGo or AirBnB for research.
- Research how spaces can be fine-tuned to make them more suitable for sharing and generating income.
- Showing your client that you understand this concept will help you build a successful, trust-based relationship