Millennials and Home Buying: A Look at Credit Scores

A young 3D woman debt consumer works to build up her credit scorAs the millennial generation continues to head-butt its way into the housing market, credit scores are creating a sizable burden on their ability to purchase a home.  A recent Rent.com survey stated that 78% of the millennial generation renters do not plan on buying a home soon.

Many cite the benefits of renting as their mainstay against home buying.  However, in a recent TransUnion survey, 43% of those aged 18-34 blame subpar credit scores.

So why aren’t millennials buying houses?

Inability to obtain a fair mortgage and a general disinterest in buying.  Credit score is the biggest hurdle for the younger generation, as most mortgages have a minimum requirement of credit score.

TransUnion found that one third of adults aged 18 to 34 have a credit score in between 300 and 600. A credit score of 620 will score you a mortgage, but anything lower is a crapshoot.

On average, millennials have a shorter credit history, which means there is more gravity in a missed payment as opposed to an older home buyer.  Millennials do not have the cushion of a long credit history, so their mistakes are more prominent, resulting in lower scores.

Another thicket to cut through is the initial cost; the down payment.  TransUnion found that nearly 60% of consumers aged 18-34 worry about obtaining a down payment.  Coupled with lower credit scores, the task becomes daunting, forcing millennials to stay renting.

It will be interesting to see how the housing market adjusts to masses of millennials renting, and putting off their first home purchase.

Will home prices come down to make up for missed capital or will rents skyrocket and force millennials to reconsider?

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Private Owner Perspective: Why List Through An Agent?

Screen Shot 2017-11-20 at 10.09.46 AMThere are quite a few steps typically required for any private landlord to procure a quality tenant: marketing, conducting showings, screening tenants, and preparing lease documents, among others.

While seasoned private landlords might even enjoy the aforementioned processes, many landlords would simply prefer their unit be rented in a timely manner by a high-quality tenant.

The most obvious obstacle for any private landlord in this situation is time. It can be significantly difficult to juggle a full-time job, schedule showings, conduct showings, screen tenants and prepare documents.

Furthermore, there is a certain level of expertise and experience that a private landlord might want to have before tackling the necessary steps towards attaining a new tenant. For example, if a landlord has never drafted a lease on his or her own, an experienced agent can step in and do this on his or her behalf.

Marketing rentals is also a facet of the procuring process that agents may assist with. Both verbiage and listing flow are critical components to successfully attracting tenants when marketing online, and rental agents know what has been tested in the marketplace and works.

While agents have mastered the use public listing sites such as Zillow and Craigslist, they also have access to the Multiple Listing Service (MLS), increasing visibility in ways the typical private owner simply cannot.

For screening purposes, Rental Beast provides both landlords and agents with a new ‘Apply Now’ function. Screening traditionally has been a burdensome process.

Screen Shot 2017-11-20 at 10.31.14 AMNow, landlords and agents have the ability to seamlessly screen tenants via Rental Beast’s online application and integrated partnership with Transunion. It is important to note that only private landlords are able to view sensitive application results, even if a given application was triggered by a partner agent on behalf of the landlord.

We at Rental Beast understand that private landlords, regardless of experience level, like to control the tenant selection process with varying degrees of firsthand involvement.

Rental Beast lends a landlord the flexibility to simultaneously market a property on his or her own, and receive agent assistance via the Rental Beast platform.

With Rental Beast, a landlord will only pay the brokerage commission once he or she has decided to accept a tenant procured by the agent and the lease is officially signed. In the meantime, landlords are able to proceed exactly as they were before. There is no upfront fee that will be collected.

We hope this post helps you, the private landlord, decide what avenue is best for both yourself and your rental property. Rental Beast can serve as a zero-risk solution that both maximizes visibility on your property and lends you the ability to receive agent assistance.

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Managing Applications Online

Long gone are the days of multiple hard-copy applications and burdensome, time-consuming vetting processes. Multiple online services have now made the application process a breeze for landlords.

The top benefits of managing applications online:

  1. Generate More Applicants

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Online applications are easily shareable and can be posted on a multitude of social media channels. Connect with tech-savvy, young consumers who are accustomed to using the internet. As a landlord, the more applicants you are able to easily generate, the more comfortable you will be with the tenant you accept.

  1. Save Time and Be Organized

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Life is much easier for a landlord who doesn’t have to print, mail, deliver and sort through hard-copy applications. Instead, digital applications are neatly organized in a single, easily accessible place.

  1. Security

1Sensitive information from hopeful applicants will be stored in a secure location, yet can still be easily accessed by landlords on the go. For applicants, this means peace of mind that only the correct people who are legally able to see their information actually do.

As a caveat, landlords will want to review the online application form of choice and what specific information is being collected. Rental Beast offers landlords a thorough application process with checks conducted directly through TransUnion.

It is also recommended that landlords reach out to applicants prior to filling out the online application. Submitting a substantial amount of personal information can be off-putting to some renters and can, therefore, lead to a lack of pertinent or comprehensive data.

4. Be Kept in the Loop as an Agent

1On Rental Beast’s unique application platform, agents are able to stay informed regarding where a client’s application stands in the process. While an agent won’t be able to access or see a client’s personal information (only the landlord will), he or she will remain a party to the entire process and won’t be kept in the dark.