Millennials are spending a stunning amount of money on rent, leading one New York-based startup to create a new niche: affordable housing that’s loaded with tech.
Roomrs founder and CEO Or Goldschmidt is hoping his new ‘community’ will take the stress out of finding housing, finding roommates, paying for furniture and living somewhere that’s cool and eclectic without getting buried in debt. For the millennial generation, which will spend a median of $93,000 on rent between from the age of 22 to 30, according to a new study, the price of housing is a heavy burden. Rent sucked up about 45 percent of this generation’s income during their first decade in the workforce.
According to the U.S. Census Bureau, almost 37 percent of people in the U.S. are currently renting—that’s the highest rate since the 1960s.
Even though there is a record number of openings in rental housing, over 95 percent of those openings are already full, and because of the competition, the approval process is ominous.
That’s where Roomrs comes into play. The start-up initially rented a single apartment in West Harlem in 2017 but it’s since grown to 300 rooms for rent in Manhattan and Brooklyn, spread over 100-plus building units, approximately 97 percent of which are occupied.
The key to Roomrs’ success is pricing rent per bedroom, rather than per apartment. Also, unlike the majority of apartments in New York City, Roomrs only requires that tenants stay for a minimum of three months.
Monthly rent averages $1,500, which includes utilities, housekeeping, and a few others things that top the Millennial housing wish-list, including Wi-Fi and smart technology features.
For New York City, $1,500 rent is a bargain compared to the current average monthly rents that top $3,500. Related: Millennials Are Leaving Prestigious Banking Jobs To Trade Crypto
Roomrs is hoping to capitalize on tech savvy millennials, with each apartment equipped with smart tech locks, outlets, shade—all controlled by Amazon Echo.
They also feature smart mattresses that track the sleeping habits of every tenant, complete with personal sleep reports detailing heart rates and sleep patterns.
"Our focus is to provide a lot of technology so our tenants will be able to enjoy a better lifestyle and will have access to amenities that they won't necessarily have the option to have access [to] at the age that they are right now," Goldschmidt told Business Insider.
And it’s more than a passing fad—it’s an ongoing trend that looks set to become much more widespread.
According to the recent analysis from HotPads, a Zillow Group site, today's youngest adults will spend more on rent in their lifetime than their predecessors. Members of Gen Z will spend an average of $226,000 on rent before ever owning a home.
That tops older generations, with millennials set to end up spending $202,000 on rent, while Baby Boomers spent an average of $148,900 on rent before becoming homeowners (after adjusting for inflation).
The top four cities where Gen Z renters are projected to spend the most money on rent are all in California.
Millennials and G-Zers also beat out previous generations in terms of how long they rented before buying. millennials will rent for 12 years to reach that point, and Generation Z will rent for 11 years.
By Michael Scott for Safehaven.com
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