It is said that the Millennial Generation are categorized as people born from 1981 to 2000. I am not the kind of person to place labels on people and don’t see how any of this ever even gets started but it does. I myself fall just outside the millennial category am considered the last group of Generation X. My fiance is a millennial and as a matter of fact, most of my friends are “millennials”. I love millennials!! But what is all the fuss about millennials this and millennials that? We are all just people born in different times so of course we will think differently based on the environment we grow up in. We are products of our own environment.
As an investor and passive income seeker, it is very hard for me to not take notice of all these articles and news sources indicating that millennials prefer to rent as opposed to owning homes. This is obviously a generalization as I already know plenty of millennials that own homes but apparently, the masses of this generation would rather rent. Ding, ding, ding! Hello, this has opportunity written all over it. If this generation prefers to rent, then lets give them what they want and make some passive income.
Investors should be jumping for joy knowing that they can buy rental properties and have a huge group of people across the country that want to rent and may continue renting for the rest of their lives, who knows? I currently have 5 rental properties and my intentions for investing in real estate had nothing to do with millennials but I do feel better about my investing strategy and feel really good about continuing to buy rental properties because of this information about millennials. This is great news for landlords!
Reasons Why Millennials Do Not Want To Buy Houses: (According to this article from the huffington post.)
- They prefer to be mobile and easily move around based on jobs.
- They have too much student debt
- They have spending anxiety.
Rent.com seems to think that this generation prefers to rent because it offers them more freedom. And this article found on Business Insider just thinks that millennials don’t care about owning anything. Whatever the reason is it doesn’t really matter to me. I can see how renting can be more desirable than owning a house and I can see why owning a house might be more desirable then renting. Its apples and oranges really. Both are great, different and healthy for you. There is no wrong way to live and pay for housing but there are ways to capitalize, generate cash flow and save money based on your living choices.
How Investors Can Benefit From The Millennial Generation
EASY!! Buy rental properties!
- Rental demand is stronger now then it ever has been and regardless of what happens to the economy, there will always be renters. The fact that millennials prefer to rent is just icing on the cake.
It’s as simple as that folks. We are living in a great time to be able to take advantage of the rental market situation and it would be a shame not to take advantage of it. There are plenty of places out there that still have a great price to rent ratio’s and you can make significant cash flow from day 1 of purchasing. The last 4 rental properties I bought were all cash flowing from Day 1 and hopefully my next 4 will too! And by then, I just might be financially free which is all I really want. If you are afraid to invest in real estate, you might want to look into a turnkey rental property. It’s probably the easiest way to get in the real estate investing game.
When life gives you lemons, make lemonade!
Lemons = Millennial Renters
Lemonade = Rental Properties
Sounds good to me Alexander! So when are we going to develop some awesome hipster loft apartments?! I hope you’ve had a good week buddy. Talk to you soon
-Bryan
Haha, that would be so cool if we could do that. A dream really!
Absolutely! Not to mention that millennials are starting families / settling down later in life. More years renting and moving around.
I am a millennial myself and prefer renting in an expensive market (San Francisco) and investing in rental properties where it makes sense (mid-west / southern US). The best of both worlds!
Hey Brian! You my friend are doing it exactly right! Taking full advantage, i love it!
I would like to move to a lower cost of living area and buy my first primary residence as well as rental property. For me, it’s just about figuring out where that area will be.
You know I have been thinking myself about moving to a lower cost of living area also. Only problem is making money in these places. I do think that is a solid plan especially if you can figure out the income situation.
Hey Alex,
We would also be classified as millennials, but we don’t prefer to rent per se. Just that houses in Melbourne are too expensive for our income. Plus we want to put our money towards other things (like making an IVF baby).
Tristan
Hi Tristan, the prices in Melbourne and most of australia from what i have gathered is that it is really expensive there and it doesnt make a lot of financial sense to own there. I get that and like you said, its better to use the money on other matters. I actually had to lookup what an IVF baby is and that is very interesting. Hope it works out well for you. 🙂
So true! I think it’s important to recognize that the way people consume is constantly changing, and the way to stay ahead when it comes to investing is to observe what is going on and to adjust accordingly.
Many reports also show that millennials prefer spending on travel and experiences than buying products. Looks like another opportunity to me!
That is a great way to put it, to recognize how people consume in a changing environment and adapt to it. Good stuff! I think you might on to something with the travel thing. I also read that travel is one of the most lucrative businesses to get into because everyone spends money on that. If you figure out a great way to make money off travel, please let me know. 😉
I am a little skeptical about all these millenial generalization – what if it’s just because they are young? Apparently younger people are more likely to rent than own a house. But your point well taken, owning rental properties is a great way to invest your money and possibly achieve financial freedom.
From what I have read, it appears that it has to do with the economy that they have seen so far, with the real estate market crash, all the people that lost their homes and the fact now that homes are expensive again, all that is just a big turn off. And I can see that happening but in reality, who knows where all this data is compiled from.
My wife and I are millennials as well as renters, but not for the 3 main reasons listed here. We live in LA in an area where it’s much too expensive to buy a home or even a townhome for the incomes we produce. Plus, I prefer to save a considerable amount of my income to instead invest in rental property like yourself.
Though generally, I do agree that there’s a trend within my generation to delay settling down with a 30 year home mortgage, which leaves a nice opportunity for us property investors.
Just found this site and glad I did. Very interesting articles you got here 🙂
Hey OB, Awesome, I didnt know about your blog and glad you found me. We are very much on a similar path. Where do you invest out of state?
I’ve been in KC, the MO side for the past 2 years.
KCMO is definitely where its at! Im hoping to acquire a few more rentals there in the future.
I’m excited to start following your website as well – I have the same strategy since I’m based in San Francisco!
Haha love the end of this article bro! Nice little change of the analogy there 😉
I agree 100%, the trend is your friend eh?
How’s it all going for you anyway? 🙂
Thanks Jef! I thought the analogy fit well! Things are great on my end. Just trying to push through and get this wedding over with and my day job is keeping me busier then ever which is preventing me from spending more time blogging but hopefully its just temporary.
Great to hear things are good on your end! All the best with balancing it all mate although you’ll get there for sure 🙂
This is very true millennials love to rent. Being a millennial myself, the majority of my friends and peers my age all currently rent. They truly do provide a great opportunity for investors to cash in on rental properties.
Great article!
Thanks Tyler!