Is buying real estate for passive income going to be saturated?

Question

I work on a college campus and it is cool/concerning sometimes the amount I hear people talking about wanting to get into real estate investing after college. I know people will always need housing and that it's a small percentage of people who actually ever end up buying, but do you guys think the market could ever be saturated from so many people wanting to invest?

Caleb Heimsoth · Answer

@Caleb Haney. The market won’t become saturated because like you said very very few people actually ever do it. Those that do usually stop after a couple years or just always remain small.

Not what is becoming saturated is all the gurus and education people in REI that portray it as super easy and get rich quick with no money and no credit. It takes hundreds of thousands of dollars to reach scale in REI and most people will never get there

Tom Shallcross · Answer

I fully agree with @Caleb Heimsoth and @Andrew Neal. It's very easy to talk about, but very hard to execute. I would be curious to see what percentage of BP profiles actually end up investing. These are folks who've invested the time to read content, listen to podcasts and make connections, and I bet there is at lower than expected percentage of profiles that have done deals. When you take it a step back and include all the people who haven't even invested the time to educate themselves, it's a real small pull-through of investors.

The market is also hot now and a quick course correction will probably eliminate a lot of these talks. Regardless of the market, there will always be opportunities - they might be squeezed or you might have to alter your strategy - but there will always be people making money leveraging numerous different strategies in real estate.

Justin Fox · Answer

If a particular path of RE investing is becoming saturated in your area then it's time to take the road less traveled. Ask those same people how much money they lost in crypto after their grandma told them how Ripple was going 'to the moon'.

Russell Brazil · Answer

The owner occupant rate in the country is incredibly stable. The low point has been 62% and the high 68%. So regardless of all cultural shifts, its pretty steady at 2/3rds of people own their own homes and 1/3 rent.

Clifford Paul · Answer

@Caleb Haney

I don't believe it will because the same reason mentioned above. Everyone I ever played football with wanted to play in the NFL but not one ever took the actions required to get there.

I see the same thing daily with real estate investing. I have people ask me for advice everyday because they want to be retired like me someday. But when when it comes to taking action only two people have ever done so. I can't even get my own children to start investing in real estate they think it's to risky. I really think they believe the easiest way to get to where I am is to inherite what I built.

Andrew Neal · Answer

@Caleb Haney I don't think it's a bad thing. As you eluded to most people talk about it because it has become sort of trendy. Similar to how in this day and age being an "entrepreneur" is "cool" while most will never do anything about it.

There are plenty of properties to go around and any number of strategies people can deploy. So what makes a good deal to you may not be a good deal to me.

A vast majority of people will never buy a single property, another large chunk may purchase one and lose money or otherwise have a bad experience and will quit. I think it's the people here on BP who get educated, develop a game plan and most importantly tirelessly execute who will be left standing.

Is buying real estate for passive income going to be saturated?

Is buying real estate for passive income going to be saturated?

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