Millennials cause surge in vacation rental investments
Millennials. You know, that generation Gen-X’ers and baby boomers alike, criticize for living at home past their 20’s and being lackadaisical regarding adulating? Well, those of us invested in the real estate market owe those same Millennials a huge thank you!
Millennials are travel enthusiast who prefers experiences over things they represent the largest group of people who utilize vacation rental properties. Not only are they the primary user of vacation rentals, they also are a growing number who invest in vacation rentals and for good reason.
At a time when the housing bubble hit back in the mid to late 2000’s Millennials were at an age where they watched their parents and friends of their parents overpay for property, often losing parts or all their assets during the worse economic downturn since the great depression. This was a rare time that the housing on a national and in some parts a global bubble occurred.
Different interpretations on the meaning behind “real estate is about location”
Not always having an appetite for the stock market (like their parents) due to its volatility M’s love to pursuit real estate. However, they approach investing in real estate much different than their folks did. For the Millennial they grew up, just as their parents had, hearing that real estate was all about location. With the new age of information and technology M’s can clearly see that location represents more than just a nice safe and friendly neighborhood with a great walkability score located minutes from where they work. To the Millennial, they value location for real estate to be more about affordability and sustainability of buying and maintaining a property that will generate continued appreciation. After all, they do not want to repeat what they watched their parents’ generation fall prey to.
Why Millennials themselves invest in vacation rentals
Many M’s, unlike their parents who got a job and bought a house filled with nice furnishings, M’s often prefer maintain their independence over stuff. As a result, they spend less money on homes to preserve their income for travel and experiences. Part of that experience is to travel the world and their lodging choices often favor an AirBnb or Vacation rental type lodging,
Top reasons young people prefer Vacation rentals over hotels survey from Slice intelligence
· 26% less expensive than hotels (even more savings in popular destination cities)
· They often prefer to discover hidden places than immerse themselves with the masses at local tourist locations.
· Offers the unique travel experience travelers seek.
· Travelers like to engulf themselves in other cultures and interact with the locals
· Seek more adventure when they travel (harder to get in corporate ran hotels)
AirBNB and GFK Research found that Millennials make up 60% of the travel to vacation home rentals
Having experienced the adventures of staying in homes instead of hotels, it comes as no surprise that they find investing in vacation rentals for own housing needs to be a popular fit. One hack these quietly brilliant kids use to have other people float their mortgage is by buying their own homes in vacation spots and have other short term renters help pay their mortgage payments and sometimes even cash flow.
Vacation rentals with a theme create higher ROI
One of the great benefits of investing in vacation rentals is the higher rents. Higher rents equate to higher return on investment (ROI). To maintain this higher ROI requires maximum occupancy. This means thinking like a traveler, which is natural for the adventurous M’s. Know your target market, why are they coming to your location. Is it the beach, is it golfing, is it a an amusement park? Some have even found great success in creating Theme based rentals.
Themes that may match your target market
· Movies such as Pixar or Game of Thrones or Star Wars
· Beach themes
· Hawaiian themes
· Pet themes (people love their pets)
· Ski cabin themes
Furnish your units with color schemes and furnishings that match your theme. The M go-to for ideas- Pinterest, of course. Decorating your space properly is where your space comes to life. let your imagination run wild and consider also that for some themes less is more. You want your guest to feel welcomed and invited. You want them sharing their experiences with their loved ones back home. When you see your guest taking pictures of your space you know you hit a home run.
Yes, we work with vacation property investors. It’s a thing. Contact us for your own free strategy session.