For years, people often thought of millennials primarily as renters – not buyers – for a number of reasons. They were seen as individuals constantly on the move, a group that undervalued the benefits of homeownership, and young people who spent more while saving less. However, according to the 2015 National Association of Realtors Home Buyer and Seller Generational Trends study, millennials – those 34 and younger – were the largest group of recent buyers making up 32 percent of all buyers.
“Fixed monthly payments and the long-term financial stability homeownership can provide are attractive to young adults despite them witnessing the housing downturn and subsequent slow recovery in the early years if their adulthood,” explains Lawrence Yun, NAR chief economist.
Millennials are jumping on the bandwagon and starting to not only realize the benefits that come with owning a home, but also the rewards that come with implementing the right real estate investment strategy. Millennial buyers have capitalized on the advent of new technologies when finding deals while millennial sellers are utilizing a variety of platforms to obtain free leads. No longer is driving for dollars the only option to find a deal for those without a large budget.
Millennial Buyers And Finding Deals
Most millennials are up to date with all of the changes and advances in technology, and are utilizing them to their advantage when finding deals; realtors should consider changing their strategies.
If you are working with a millennial buyer, chances are, they have their eyes set on a real estate bargain before ever contacting you. Sites like Redfin, Trulia, and Zillow make it easy for homebuyers to find exactly what they are looking for without even consulting an agent. Therefore, realtors should step up their games and become experts on their local market. While the above mentioned sites facilitate property searches, agents are still needed to interpret the information and provide knowledge when it comes to closing complicated deals. “Nothing can replace the real insights and guidance realtors deliver to help consumers navigate the complex buying and selling process,” says Chris Polychron, NAR president.
In this day and age, most millennials regard their smartphones as an extension of their arms. In fact, 75 percent of millennials prefer texting over talking, and 86 percent prefer to receive texts over calls from companies because texts are an unobtrusive, more convenient, and on their own schedule. Many millennials even admit to rarely checking their voicemails. How does this affect the real estate industry? Real estate agents need to understand millennial preferences and learn how to adapt to them. Because texting is a millennial’s primary communication method, they expect the people they are working with to be “on demand” at all times. But what does this mean for those intent on finding a real estate investment property, or a home to live in for that matter?
Ultimately, millennials are on-the-go, hasty decision makers, and succinct communicators. While they may not possess expert skill when it comes to finding deals, they utilize technology effectively and efficiently to get what they need. Realtors and investors, consider this your notice and adapt accordingly. Do you know how to find an investment property in today’s environment?
Millennial Sellers And Free Leads
While there are far more millennial buyers, there is a fair amount of millennials interested in the investing side of real estate too. A 2015 NAR study states that 81 percent of real estate agents and investors are over 45 years old, while only three percent are under 30. However, the latter is consistently increasing. If millennial buyers are rapidly affecting the real estate industry, you can imagine that millennial sellers are taking over as well, and they are doing so by exploiting free leads.
A lot of traditional investors choose paid leads over free leads, presumably because they feel paid leads produce better results. However, millennials are proving that claim to be false. There are a number of paid lead strategies that vary in costs: direct mail campaigns, bandit sign campaigns, or local newspaper, television or radio ads. Some investors employ online resources to purchase lists containing the contact information of people whose homes are in foreclosure, being “shortsaled,” or are motivated sellers for another reason. For example, FortuneBuilders’ affiliate real estate software program RealFlow gives users constantly updated lists of all distressed properties in a 50 mile radius of a specific market.
While paid leads ensure a constant flow of potential clients, millennials are experience high levels of success with free leads. Understanding the real estate auction process, for example, can provide millennials in the know with great opportunities.
Social media is one of the best ways to get the word out about your business and can generate serious leads. Over 70 percent of U.S. adults use some form of social media, meaning your message has the ability to reach a vast audience. Social media allows users to communicate freely and engage with businesses. Millennials utilizing social media should be sure to actively connect with their followers and act as credible, reliable, experts in their field.
A second cousin to social media marketing, is content marketing. Producing intelligent, relevant, useful, and original content is something that a majority of millennials are doing to capture leads. Unique content can prove that you are a thought leader in your industry and therefore have potential clients lining up to ask you questions. It is advised to answer questions and provide help free of charge, initially, because even if those people don’t need your services immediately, they will remember you as a respectable, helpful professional. Plus, you now have their contact information stored, which can be added to your ever-growing rolodex.
Craigslist is another free resource millennials are taking advantage of. Whether you crawl through ads looking for individuals who need to sell their homes fast, or post an ad of your own, Craigslist can find you potential clients fast. Bandit sign marketing is a strategy tons of investors implement, but for a fee. For no cost but similar results, create your Craigslist ad similar to how you would fabricate a bandit sign.
Finally, millennials are expert networkers. Networking is a great way to meet like minded individuals who can learn from and strategize with. Try attending one networking event per week. After a few months, and a little work on your end, your ROI can be huge. You will meet people who may not be in need of your services immediately, but will come to you in the future when a different opportunity presents itself.
What can you take away from millennials? They are masters at making use of what is at the tips of their fingers – technology, they work fast to be efficient and therefore realize success quicker than traditionalists, and they take advantage of free resources in order to save their capital for when they really need it. When it comes to utilizing free leads and finding deals, millennials have the real estate investing industry covered. What can you learn from them?