In a previous article, Pete discussed the shortage of millennials as real estate investors. Many are challenged with buying their first homes, let alone invest in other properties. Catch the article here if you missed it.
For a variety of reasons, millennials have a different outlook on real estate investing than in their parents’ and grandparents’ generations. Times and lifestyles have changed, but real estate investment remains one of the most lucrative opportunities for building wealth. Millennials can truly benefit. What must happen to change the avoidance trend?
Here are a few of my thoughts on this topic:
We can’t broach this subject without putting some of the responsibility for change on banks. It’s time to start thinking about making home buying possible again for Americans and especially millennials. Why especially millennials? Because the future is theirs and building the country over the next 50 years will be on their plates.
Times and lifestyles have changed, but real estate investment remains one of the most lucrative opportunities for building wealth. Millennials can truly benefit.
As the economy restructures, the real estate market is recovering well and home prices are rising fast. This is good news for present homeowners and sellers. This is not so good for those whose salaries aren’t rising at the same rate! Buying a home or investing in real estate as a business seems to be less and less likely for most young people. For millennials, who must also contend with debt from college loans and rising inflation, this is even more challenging.
However, until banks become less averse to risk, addressing these issues and creating change is not going to happen quickly.
The issue of access to capital must be addressed. There are a number of cash buyers for whom investment is easy. Most are older than those falling into the millennial category. Although banks have changed the way they do things, non-traditional loan companies are offering down payments as a loan for an equal share in the properties they’re investing in. Will this option work? Only time will tell.
How will we handle the demand of clients who want to buy homes when they have insufficient funds to make down payments? This topic must be discussed, addressed and remedied. The futures of young millennials and the quality of life for their families is counting on it.