The future of real estate is millennials. As millennials outnumber baby boomers this year, becoming the largest adult population in the U.S., their real estate decisions are going to start dramatically impacting the business. A primary concern that is driving millennial decisions is the environment, which has been impacting many businesses, not just real estate. In real estate, green amenities and green building features are becoming the primary concern for millennials, but there are other ways to ensure that your real estate investment complies with the desire for sustainability.
In the early 2000s, a trend emerged among baby boomers to create elaborate and large mini-mansions in the suburbs of cities. As they age and their children move out, baby boomers are downsizing by placing these mini-mansions on the market. Unfortunately for them, the outdated styles of the homes and the large footprint that they take up, both physically and in their environmental impact, are not appealing to millennials. In favour of reducing upkeep and environmental impact, millennials are turning to homes with smaller footprints, such as tiny houses. Tiny homes are modular, easy to move living spaces that rarely exceed 46 square metres. They allow for all the amenities of a regular home—living room, kitchen, bathroom—in a smaller area, and typically all spaces are multipurpose to maximize their usage. In addition to being more sustainable, they are also a less expensive alternative at a time when house prices are skyrocketing.
It is not surprising that another trend in the real estate market comes from the sharing economy. As co-working spaces take off, they’ve created the trend of co-living. Co-living is when a group of strangers live on separate leases in one house. The home, rent and roommate approval process is generally managed by a co-living management company. Bathrooms and bedrooms remain private, but living spaces, such as outdoor space, the living room and the kitchen, are shared between all members. These homes have anywhere from three to 20 tenants, depending on the company and the space. This is an increasingly sustainable option, as it reduces waste from rarely used spaces. It also encourages minimalism, as the homes are fully furnished. This means that co-living residents are less likely to buy unnecessary items, thereby reducing waste from consumption.
Although not always true of all co-living homes, Sociable Living in particular also helps to reduce waste by renovating old, unused homes. This reduces the carbon emissions from sourcing materials and building homes. Since many old homes are not complete with green amenities and green building features, we opt to retrofit them with new appliances and features to ensure that they are up to our sustainability standards. Although moving into a newly built home can be tempting, millennials who are concerned about their environmental impact will likely start considering renovations as a viable, and likely less expensive, option.
The future of homes, both purchased and rented, is green and sustainable. For those involved in real estate investing, it will be important to create sustainable options to draw in renters and keep them happy. Considering alternative real estate investments, such as co-living, may also help to attract millennials.