Millennials Are a Rental Real Estate Investors Dream

Good news for rental real estate investors, according to a New York Times article Millennials are more apt to rent over buying. Here’s the scoop:

No Picket Fence: Younger Adults Opting to Rent, New York Times

Rent Versus Ownership

So why would Millennials look to renting over homeownership? A few reasons. First, they lived through the housing bust as Millennials Are a Rental Real Estate Investors Dream teens or early twenty somethings and saw family members and friends get hurt by it. They watched people they cared about being stuck with homes they could no longer afford, but also couldn’t sell. It’s had an effect. Fewer are willing to take that risk regardless of whether the market has rebounded.

Millennials – Reasons To Rent

Other reasons also have to do with not having to be tied down to a mortgage, but not out of fear, but out of convenience. Renting means that moving due to a job or for whatever reason is much easier. There is a huge difference between a year lease and a 15, 20 or 30 year mortgage.

Apartment complexes are taking advantage of that and offering all kinds of amenities that homeownership may not: well appointed apartments, pools, fitness complexes, fire pits, waterfalls, units with things like built-in iPod docking station hard-wired to speakers that pipe music throughout the apartment and link to TVs, and more. Things that would cost way too much due to the type of home that would have those types of amenities.

Hard To Qualify

Another reason many Millennials don’t look at homeownership is because they can’t qualify for mortgages. High amounts of college debt and difficulty in finding higher paying jobs makes it difficult to qualify for a mortgage. Renting can give them the ability to save towards a home later in life. It also means that they have more spending money for things like the weddings they are attending of friends and family members their age.

For whatever reasons, Millennials are hesitant to join the ranks of homeowners. It may change as they mature, but for now, this is good news for rental real estate investors.

Denver CO Rental Realtors – We Need Rentals! NOW Is The Time To Buy Investment Properties!

Denver CO Rental Realtors are looking for investors to purchase properties and rent them! People are looking to rent in this area so now is the best time to buy real estate investment property in Colorado to help fill that need.

Before the housing bubble burst, many people who couldn’t afford to purchase a home because of the inflated prices found that renting was an affordable alternative. Rents were inexpensive and owning rental property was much less productive than it is currently. Now that the housing market is a buyer’s market, the opposite is true, renting is much more expensive. In the Denver metro area, I am here to tell you, realtors are looking for people to purchase investment properties.

According to a study conducted by Harvard University, the percentage of renters who spend more than half their income on housing costs is at its highest level in half a century. It’s not just low income tenants being affected, either. About 26% of renters spend more than half their pre-tax income on rent and utilities. The reason is twofold.

First, incomes have slipped dramatically due to the recession, and rents have risen as the demand for rental properties have increased. People walking away from underwater homes, evicted because of foreclosure or who just wanted out from under an undervalued property are now padding the roles of tenants.

Further aggravating the situation is the fact that developers have cut back on projects, and not just single family homes. Yet one more contributing factor is that financing for high end projects is more easily procured by developers, as opposed to the middle and low end properties that displaced families, young workers and many others are able to afford.

Ideally, if you are renting, you shouldn’t be spending more than 30% of your income on housing. Reality is that most aren’t holding to that advice.

Denver Property Management - Denver Realty and RentalsIn the West, scarcity of affordable rental units is even more pronounced, now that we are headed towards what almost appears to be a new buyers market. If you have enough to put down on a property for an investment, you can provide a rental property for a qualified tenant relatively easily (if you have a great property management company!)

To find out more about how to buy investment properties in Denver, call Denver CO Realtors, Denver Realty and Rentals today! 303-452-5853

We can help you buy Denver rental properties and maintain them effortlessly through our real estate and property management expertise.