Are we the last generation of landlord ?
Member since 2019 · 7k+ posts · 4k+ votes
Are we the last generation of landlord ?
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Member since 2020 · 671 posts · 937 votes
2yI can't argue with a word! haha. I used to get frustrated, but instead I just tell my kids how easy the race will be for them since so few are running it. Along the lines of Joshua 24:15, "as for me and my house, we will continue to work." Well, and, more importantly, follow the Lord, but this is a real estate website, so...
80 Replies
- 2yMatt McCurdyBusiness MemberReal Estate Broker · Cedar Rapids, IA · Member since 2019 · 143 posts · 56 votes
That's the beauty of investing in Iowa. I've already and continue to build upon my portfolio and I'm helping first time investors and seasoned investors create wealth in Iowa. Quite honestly, I'm still perplexed why more haven't been investing in Iowa due to the cash on cash returns and lower barrier to entry in terms of cash down.
@Carlos Ptriawan we are certainly seeing plenty of California dollars leaving the state (i.e. Florida, Texas, Montana, Idaho, Colorado), but now we are starting to see those states balloon into unaffordable markets as well. What would you do as an early 20's something move to an affordable destination to invest or just invest in syndications to make passive income?
- 2yScott TrenchPro MemberRental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
Really interesting statistics here. Can you provide a source?
It feels directionally right, but more extreme than I would have expected.
I wonder if we will see prices normalize closer to a national median in the 2020s, with prices falling in high priced markets, and rising in the lower priced areas. Either way, until something changes, it's a hard time to buy property for first time buyers.
- Orlando · Member since 2023 · 61 posts · 13 votes2y
In Florida you have to make an average of $125,000 a year to afford a house. The wages, if you've been at the same job, won't catch up to that number. If you've been working at the same hourly job for 20 years you're only up to $48,000 a year. If you're salaried you're only at $75,000 according to numbers I just saw. In Florida those numbers used to work out well but with the influx of money from New York and California the house prices have just shot up. I just spoke with a new builders rep who sells townhomes to mostly investors and she told me they're cutting back because they can't turn a profit. I would tell investors to find good property management companies in the midwest and buy houses in Iowa, Nebraska, and parts of Ohio where you can still turn a profit.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @John Landskroener:
In Florida you have to make an average of $125,000 a year to afford a house. The wages, if you've been at the same job, won't catch up to that number. If you've been working at the same hourly job for 20 years you're only up to $48,000 a year. If you're salaried you're only at $75,000 according to numbers I just saw. In Florida those numbers used to work out well but with the influx of money from New York and California the house prices have just shot up. I just spoke with a new builders rep who sells townhomes to mostly investors and she told me they're cutting back because they can't turn a profit. I would tell investors to find good property management companies in the midwest and buy houses in Iowa, Nebraska, and parts of Ohio where you can still turn a profit.
yes I got the same conclusion, it all started in 2013, the appreciation outside California is indeed happening because CA and NY money (and WA too).
Originally home price in some parts of CA/NY/WA is going up not because ordinary income, but coming from Tech/Research/medical company, well basically wall street. Nobody buying home with income/wages. They bought with stock options or free money from wall street. In 2020 also it's very common for startup founder that just received money from banks or VC, to re-invest the money by purchasing home almost immediately. After ten years these appreciation is just expanding. People or retiree that move from CA to TX, is making home appreciation in TX. And for every financial guy that move from NY to FL, they increase the home price in FL as well. And older home folks that used to live in Miami is moving to cheaper place.It has the same trend, money flowing following migration pattern of people and money.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Matt McCurdy:
That's the beauty of investing in Iowa. I've already and continue to build upon my portfolio and I'm helping first time investors and seasoned investors create wealth in Iowa. Quite honestly, I'm still perplexed why more haven't been investing in Iowa due to the cash on cash returns and lower barrier to entry in terms of cash down.
@Carlos Ptriawan we are certainly seeing plenty of California dollars leaving the state (i.e. Florida, Texas, Montana, Idaho, Colorado), but now we are starting to see those states balloon into unaffordable markets as well. What would you do as an early 20's something move to an affordable destination to invest or just invest in syndications to make passive income?
If I'm early 20 I would work for company that gives me free income and re-invest it to real estate in California, Hawaii, Iowa, Nebraska, Alabama LOL
the trick is need to work for company that gives free money lol, except I'm the GP I don't want to invest in MF syndication as LP, exception if I'm LP I would invest at industrial space with IRR 20%.
But math is showing investing direct property into Iowa is much more safer than throwing money to syndication lol - Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes2y
Looks like recent national FTHB age trends have risen sharply from 33 to 36 in just a couple years.
Another sharp difference is % of buyers being first-time. 2010 = 50%, 2022 = 26%. I think normal = 38% ish.
The rise in corporare/ private equity buying / ownership needs to be mentioned as well.
I was 'interviewed' by the NYT for my take on the post-covid disappearance of the hands-on mom and pop landlords vs corporate profit over people as a seller to 2 syndications and feels guilty about it. They followed 2 of my tenants that 'left' as a result. 1 I had for 17 years.
Private equity owners = renters lose. As they lose, harder to buy of course. Result is these shocking statistics.
One source:
https://www.thezebra.com/resources/home/average-age-of-first-time-homebuyers/#:~:text=And%20are%20these%20the%20factors,up%20from%2033%20in%202021.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes2y
The age of first time home buyer in California is now 49 years old (with a 30 year mortgage) working and paying until they are 80 years old,
in 1980 it used to be 32 years old with a 20 year mortgage paying until they were 50 years old.
In the current situation they are essentially renting, with the bank as their landlord.
========
In ancient times, hundreds of years before the dawn of history, lived an ancient people... the Landlords. No one knows who they were or what they were doing...[Spinal Tap the movie]
So what does the future hold?
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Steve Vaughan:
Looks like recent national FTHB age trends have risen sharply from 33 to 36 in just a couple years.
Another sharp difference is % of buyers being first-time. 2010 = 50%, 2022 = 26%. I think normal = 38% ish.
The rise in corporare/ private equity buying / ownership needs to be mentioned as well.
I was 'interviewed' by the NYT for my take on the post-covid disappearance of the hands-on mom and pop landlords vs corporate profit over people as a seller to 2 syndications and feels guilty about it. They followed 2 of my tenants that 'left' as a result. 1 I had for 17 years.
Private equity owners = renters lose. As they lose, harder to buy of course. Result is these shocking statistics.
One source:
https://www.thezebra.com/resources/home/average-age-of-first-time-homebuyers/#:~:text=And%20are%20these%20the%20factors,up%20from%2033%20in%202021.
True, either it's coming from tech worker/PE fund/hedge fund .. it's all the same.
Tech workers/PE fund/hedge fund is buying with money coming from Wallstreet tech stock ( FANG/MAG7 stocks). As far as I know NOBODY is buying
home with wage , all the downpayment is coming from stock options that's being released to the employee ; or syndication of HNW investors in term
of PE buying purchase. It's way too common these days.
However, the one that raised the property value in sunbelt is mostly driven by REIT/SF-focuses fund.
If we see total distribution of the house, lets say one zip code in Cupertino,CA. If there're 100 SF, 2023 avg price is $1.8 mil ;
but if we see the buying average, all these houses was acquired from 1980 to 2017 with price range from 100k to $1.2 mil.
The top 20% then is being purchased recently with price range from $1.4mil to $2.0 mil making aggregate value of $1.8mil.
This is actually one of the biggest wealth transfer SCHEME from tech sector WallStreet to Baby Boomers that purchased the house in early 1980/1990s.
The very reason that house goes up in value is just because Steve Job's company is 2 miles away from there , while every living person in planet
is purchasing Iphone.
So IPHONE ---------> home appreciation in Texas LOL - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @John Landskroener:
In Florida you have to make an average of $125,000 a year to afford a house. The wages, if you've been at the same job, won't catch up to that number. If you've been working at the same hourly job for 20 years you're only up to $48,000 a year. If you're salaried you're only at $75,000 according to numbers I just saw. In Florida those numbers used to work out well but with the influx of money from New York and California the house prices have just shot up. I just spoke with a new builders rep who sells townhomes to mostly investors and she told me they're cutting back because they can't turn a profit. I would tell investors to find good property management companies in the midwest and buy houses in Iowa, Nebraska, and parts of Ohio where you can still turn a profit.
Also I personally think Florida would be the biggest market in the next ten years and there would be lot of migration out from FL too, maybe going to Alabama ? need to check the migration pattern for next 10 years.
It's pretty clear that NYC as financial hub is being moved to Miami.
Then Bezos Amazon is also moving to Florida.
10 years from now people in Miami-Dade county would confuse why they can't buy house in their own state and may have to move to SC/GA/AL. - 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
good post, I've been thinking about this a lot and I'm also focused on finding seller finance deals so very relevant to that.
- Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes2y
Interesting food for thought. I think the younger generation prioritizes freedom to move around and switch jobs more than previous generations, where the priority was setting up a comfortable life and starting a family. Thus renting often sounds like a more attractive option.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
We are becoming the last generation of landlords, yes. But you got to remember, we will die too so that torch will be passed.
Fundamentally though, this is why hard assets are the first thing that needs to be in everyone's pursuit that has the means to carry it. First, by a distance.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votesIt's more because of the lack of choice. If we made buying cheaper than renting, you'd see some people not be willing to change. Now it's cheaper to rent + remote work(though lesser than years past)= more fluidity.
Quote from @John K.:
Interesting food for thought. I think the younger generation prioritizes freedom to move around and switch jobs more than previous generations, where the priority was setting up a comfortable life and starting a family. Thus renting often sounds like a more attractive option.
They definitely prefer freedom but they'd rather own two-three houses in different areas of the US over renting them, I would figure, and move between them like that. Home ownership is still 100% in pursuit over renting, it's just a lack of choice. - 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votesNC is my biggest bet. NC has seen this run up, but you already have some tech hubs getting footing there. It also has a lot of attractive cities and well-developed, underappreciated coast. SC is far behind with getting the attraction they needed and Georgia's 2nd and 3rd cities are just still too small of scale. Though I have taken bets on them. Alabama i just don't think will ever fully catch on, it'll grow though for sure simply because it has a growing economy. But not like a Florida-runner, I think that's North Carolina.
Quote from @Carlos Ptriawan:
Quote from @John Landskroener:
In Florida you have to make an average of $125,000 a year to afford a house. The wages, if you've been at the same job, won't catch up to that number. If you've been working at the same hourly job for 20 years you're only up to $48,000 a year. If you're salaried you're only at $75,000 according to numbers I just saw. In Florida those numbers used to work out well but with the influx of money from New York and California the house prices have just shot up. I just spoke with a new builders rep who sells townhomes to mostly investors and she told me they're cutting back because they can't turn a profit. I would tell investors to find good property management companies in the midwest and buy houses in Iowa, Nebraska, and parts of Ohio where you can still turn a profit.
Also I personally think Florida would be the biggest market in the next ten years and there would be lot of migration out from FL too, maybe going to Alabama ? need to check the migration pattern for next 10 years.
It's pretty clear that NYC as financial hub is being moved to Miami.
Then Bezos Amazon is also moving to Florida.
10 years from now people in Miami-Dade county would confuse why they can't buy house in their own state and may have to move to SC/GA/AL. - 2yRyan IrwinPro MemberInvestor · Ankeny, IA · Member since 2022 · 158 posts · 129 votes
Quote from @Matt McCurdy:
That's the beauty of investing in Iowa. I've already and continue to build upon my portfolio and I'm helping first time investors and seasoned investors create wealth in Iowa. Quite honestly, I'm still perplexed why more haven't been investing in Iowa due to the cash on cash returns and lower barrier to entry in terms of cash down.
@Carlos Ptriawan we are certainly seeing plenty of California dollars leaving the state (i.e. Florida, Texas, Montana, Idaho, Colorado), but now we are starting to see those states balloon into unaffordable markets as well. What would you do as an early 20's something move to an affordable destination to invest or just invest in syndications to make passive income?
Shhhh @Matt McCurdy remember, we like Iowa being an 'under the radar' market. ;-) That being said, it totally makes sense that the age of those who purchase is going up. Besides tougher affordability, mobility desire is high along with the trend of couples marrying later in life (reducing DINKs) and many other factors. However, it all certainly is good for the rental market!
- Investor · Fresno, CA · Member since 2016 · 222 posts · 237 votes2y
Quote from @Carlos Ptriawan:
Especially @James Hamling , just read a market statistic and its mind blowing.
The age of first time home buyer in California is now 49 years old, in 1980 it used to be 32 years old.
In TX: 37 years old and FL is 42 years old.
The youngest age for FTBH in 2021 is located at the state of Iowa for 29 years old.
It just mean in CA it's almost impossible for next generation to be landlord then, unless it's an inheritance.
And this very long time boom cycle is giving very advantageous position for baby boomers that lived in CA and purchase houses.
No wonder Florida and Texas price is going up in early 2020s !!I'm from the mid-west, but live in CA. It blows my mind, but most Californians don't ever even consider leaving and have seldom lived outside of the state. They simply don't know any other way and are unwilling to consider an alternative.
It keeps many in the state in a perpetual state of just barely scraping by.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes2y
Quote from @Timothy Howdeshell:
Quote from @Carlos Ptriawan:
Especially @James Hamling , just read a market statistic and its mind blowing.
The age of first time home buyer in California is now 49 years old, in 1980 it used to be 32 years old.
In TX: 37 years old and FL is 42 years old.
The youngest age for FTBH in 2021 is located at the state of Iowa for 29 years old.
It just mean in CA it's almost impossible for next generation to be landlord then, unless it's an inheritance.
And this very long time boom cycle is giving very advantageous position for baby boomers that lived in CA and purchase houses.
No wonder Florida and Texas price is going up in early 2020s !!I'm from the mid-west, but live in CA. It blows my mind, but most Californians don't ever even consider leaving and have seldom lived outside of the state. They simply don't know any other way and are unwilling to consider an alternative.
It keeps many in the state in a perpetual state of just barely scraping by.
Californians in the state in a perpetual state of just barely scraping by = psudo-slavery.That's a very sad situation.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Especially @James Hamling , just read a market statistic and its mind blowing.
The age of first time home buyer in California is now 49 years old, in 1980 it used to be 32 years old.
In TX: 37 years old and FL is 42 years old.
The youngest age for FTBH in 2021 is located at the state of Iowa for 29 years old.
It just mean in CA it's almost impossible for next generation to be landlord then, unless it's an inheritance.
And this very long time boom cycle is giving very advantageous position for baby boomers that lived in CA and purchase houses.
No wonder Florida and Texas price is going up in early 2020s !!Henry Kissinger's last interview was with a warning, or more of raising an alarm, of the extreme risk's happening in Western World, especially U.S., for the decline of the Middle Class.
In my lifetime thus far I have seen things go from 1 income households surviving, to suffering, forcing 2 income households being normalized, first thriving, than surviving, now struggling on razor thin budget's.
Will Landlord's end? Of course not. But who they are is changing, the barriers for entry. At same time populace is getting softer, weaker, lazier. The divide between the have's and have not's, the doer's and do-not's, ever widening.
Reality is people have more opportunity now, today, with more ease and comfort, more return on effort, than ever in human history. yet what's the most chanted slogan? "Things are too hard"....
One can literally, from there living room in underwear with Cheeto stained hand's, do most anything including earn a 6 figure income rather readily. Go just 20 years ago the notion of which was impossibly rare and insane. Today ANYONE willing to put in effort can, yet how many even try? Exceptionally rare few.
It is self inflicted by any number of measures; the government we allow in, the skills were willing to earn, the work we are willing to do, etc etc.. The U.S. has become a nation of whiners, lazy, weak, entitled whiners. That's the truth of it, but instead of face things which is 1st step to solving issues, we institute a system to defend "feelings", where if it hurt's it can not be said. An Ostrich society. All is good, nothing is bad, want and things will appear.
Times are-a-changing. You will own nothing, and be HAPPY....
- Member since 2020 · 671 posts · 937 votes2y
I can't argue with a word! haha. I used to get frustrated, but instead I just tell my kids how easy the race will be for them since so few are running it. Along the lines of Joshua 24:15, "as for me and my house, we will continue to work." Well, and, more importantly, follow the Lord, but this is a real estate website, so...
- 2yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Scott Mac California is unsustainable from a natural resource prospective. If you grow up in a place like that it's hard stomach. It's not a market for broke people. Gavin Newsom is making sure of that. It's like they want (need?) people to leave.
From our point-of-view that's what we think of when people complain about cost of living in Cali.
- 2yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
Quote from @Carlos Ptriawan:
Especially @James Hamling , just read a market statistic and its mind blowing.
The age of first time home buyer in California is now 49 years old, in 1980 it used to be 32 years old.
In TX: 37 years old and FL is 42 years old.
The youngest age for FTBH in 2021 is located at the state of Iowa for 29 years old.
It just mean in CA it's almost impossible for next generation to be landlord then, unless it's an inheritance.
And this very long time boom cycle is giving very advantageous position for baby boomers that lived in CA and purchase houses.
No wonder Florida and Texas price is going up in early 2020s !!Yeah, the stats seem to be going up on the age of people buying these days even through the US. The higher-priced states and areas are the ones that are pricing the people out and putting them in the placement for holding until they have the money to do the purchase.. Or house hacking, or getting a partner to join in the purchase (or family).
The other thing is that you need to realize the more the years go on with technology and data the longer the average human lives too. This is something to consider (not just focusing on CA).
For instance, 1980 the average person lived to 74 y/o and now it's 79 y/o. and in 5-10 years (not 40 like this topic) it will be 10 or more years added to that number.
The McKernan Group4.957 Reviews - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Jaron Walling:
@Scott Mac California is unsustainable from a natural resource prospective. If you grow up in a place like that it's hard stomach. It's not a market for broke people. Gavin Newsom is making sure of that. It's like they want (need?) people to leave.
From our point-of-view that's what we think of when people complain about cost of living in Cali.
But California is actually 4 times cheaper than folks that live in Denmark , Seoul , Bangkok , Mumbai or London ….
just saying it is all relative in term of whose view :) lol - Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Peter Mckernan:
Quote from @Carlos Ptriawan:
Especially @James Hamling , just read a market statistic and its mind blowing.
The age of first time home buyer in California is now 49 years old, in 1980 it used to be 32 years old.
In TX: 37 years old and FL is 42 years old.
The youngest age for FTBH in 2021 is located at the state of Iowa for 29 years old.
It just mean in CA it's almost impossible for next generation to be landlord then, unless it's an inheritance.
And this very long time boom cycle is giving very advantageous position for baby boomers that lived in CA and purchase houses.
No wonder Florida and Texas price is going up in early 2020s !!Yeah, the stats seem to be going up on the age of people buying these days even through the US. The higher-priced states and areas are the ones that are pricing the people out and putting them in the placement for holding until they have the money to do the purchase.. Or house hacking, or getting a partner to join in the purchase (or family).
The other thing is that you need to realize the more the years go on with technology and data the longer the average human lives too. This is something to consider (not just focusing on CA).
For instance, 1980 the average person lived to 74 y/o and now it's 79 y/o. and in 5-10 years (not 40 like this topic) it will be 10 or more years added to that number.
Good point , people income peak is at 40 to 55 so if they purchased at 49 then by the time they retired at 60 , the LtV is 40 percent only …. There is almost no possibility to become landlord in CA lol except if investing in tertiary location.
When I purchased in 2009 , I can pay it off 30yfrm in 2018 by having multiple rental , now it is almost impossible mathematically speaking.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @Jaron Walling:
@Scott Mac California is unsustainable from a natural resource prospective. If you grow up in a place like that it's hard stomach. It's not a market for broke people. Gavin Newsom is making sure of that. It's like they want (need?) people to leave.
From our point-of-view that's what we think of when people complain about cost of living in Cali.
But California is actually 4 times cheaper than folks that live in Denmark , Seoul , Bangkok , Mumbai or London ….
just saying it is all relative in term of whose view :) lolWhat! London, 4X CA prices?! Are you Mad?! Not even close my friend, not even close.
Go online and check out Savills listing's. Now keep in mind it's London, of course there is 5m, 10m, 50m pound/dollar places, it's London. But no, median or average, not at CA prices yet for most, and certainly not a multiplier of CA prices.
I have honestly never seen anywhere like S.CA anywhere else in the world. Where such small homes, with so little, are sold for so much $ in relation to what most are making for incomes being so little in comparison.
- Lender · Orlando, FL · Member since 2016 · 340 posts · 115 votes2y
@Carlos Ptriawan
I don’t think so. Tech allows for partial ownership and many investors of new generations will own pieces of home (likely eventually on blockchain and traceable).
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