More Millennials Saying Good Bye to the American Dream

Millennials are quickly becoming the largest segment of the American population. As a result, it’s important for buy and hold investors to pay attention to their habits. While some Millennials are returning to the housing market, homeownership in this group has dropped to a new low of just 13.2%, according to Forbes. Even as rent prices are expected to go up 3.3% this year alone, it’s believed that Millennials will continue to choose renting options, which is great news for rental real estate investing pros.

The reasons why so many Millennials are choosing to rent are numerous. For one thing, the unemployment rate of Millennials is 8%, higher than other demographics. Millennials also have about $1 trillion collectively in student loan debt. Many young adults simply don’t have the debt-to-income ratio that they need in order to obtain a sensible mortgage. Others don’t have the savings for a down payment.

But there are also cultural factors that are keeping Millennials who could buy out of the housing market. As a group, Millennials are getting married much older than other generations. As they spend their 20s and early 30s unattached, these young adults prefer the flexibility of renting. Why buy a house if a new job or relationship could take you to a different city at any point? The tendency to split rent costs with a roommate also makes it harder for Millennials to buy homes.

Renting also comes with its fair share of perks. As renters, Millennials don’t need to worry about property taxes or the upkeep of their own units. When things go wrong, they can simply call the super and get their issues taken care of for them. Apartment buildings also have a sense of community, and have amenities like pools and fitness centers. There’s also the fact that a Millennial might be able to rent an apartment in an area where they could never afford a home, such as a downtown area or a hot young neighborhood.

Because so many Millennials are choosing to rent, rent prices will only continue to rise. Since 2010, rents have risen 14% across the country, not including the 3.3% they are expected to rise this year. With home prices also on the rise, this is an ideal environment buy and hold investing.

Making the most of a buy and hold investment comes down to three simple factors. First, investors must take the time to choose single-family and multiunit rental properties in neighborhoods that are on the rise. Taking the time to do research and not just look near your own home is vitally important. Second, investors must research the ideal buy and hold loans, looking for private money lenders who can help them leverage their capital and provide them with superior customer service. Finally, investors must take the time to seek optimal tenants.

When these three pieces fall into place, buy and hold investors stand to make exceptional profits, both in the form of rent checks and from the long-term profits of the increasing value of the property. Indeed, we firmly believe that buy and hold investing is one of the smartest and most lucrative investments that anyone can make in the current marketplace.