There are a few things in life I am willing to bet on.
Here are 3 of them:
The pope is Catholic.
The sun will rise tomorrow.
I will never stop acquiring real estate rentals.
One thing I am able to do well in recognize long-term trends.
Some examples of this was my ability to see Lemonade at $46 (now at $120), Palantir at $10 (now at $23), and XL Fleet at $11 (now at $22).
And now I am seeing something again: the upside & future of real estate rentals.
It's difficult for me to see a situation where those who start acquiring rental properties now will lose long term. Saying rental real estate is a good bet is not some sort of Skip Bayless-style hot take - it is generally pretty sensible - and most investors would agree. However, what I'm starting to see and the future I envision makes me even more bullish of rentals than the typical investor. These are 3 reasons I will personally be continuing to acquire rentals for the rest of my life.
Let's take a look at this graph. This is the percentage of homeownership in America over the last 20 years. The general trend shows that homeownership has been
going down. There's been a recent spike over the last five years, but my intuition tells me this trend will continue downward. And this is for a few reasons. I think the biggest is Gen-Z.
We no longer live in a world where the idea of a good life is getting a stable, 9-5 job, coming home to your family, and living in your house for 25 years. The future young adults want to be YouTubers, TikTok stars, and life style influencers. We're also getting away from a world where it's necessary to be in a still location to do your job effectively. Technology advancements are enabling us to do mostly everything remotely, and there is no reason to think this will slow down. People want to travel & experience different places - not live in the same crusty home for the rest of their lives.
This is great news for the rental property owner because there will be increased demand for renting (especially in desirable areas). This positions rental property owners to charge a premium for their humble abodes. That is reason #1. And you may be asking, but what if these people don't want to live in these rentals for very long? Then what? In comes reasons #2.
I am very bullish on Airbnb. I love their leadership & believe their business model is shaped for the future. If people don't want to live in these rental properties for say, 5 years, which typically would yield a reliable, stable return for the investor, that is fine. It turns out, Airbnb has been able to yield even higher returns for investors because they can charge a premium for the short stays. With that being said - I see a win-win for the investor. If they find someone that wants to live in the rental long term, then great. But if not, Airbnb comes in to save the day. The key is that the general trend is less home ownership, more renting. Our generation loves flexibility. And in both situations, winner is the investor. This leads me to reason #3.
3. Generational Wealth
With these strong convictions, I would be a fool to not take advantage of the opportunity at my finger tips. Keeping reasons one & two in mind, it is clear to me that continuing to acquire rental properties will lead to generational wealth. This is why I am adamant about getting started as soon as possible. One match can start a whole fire - and in this case, acquiring that first househack is the match and generational wealth is the fire.
Good points and this is also my thinking.