In the past, older generations usually preferred to save up enough money for buying their own home and then make an investment in the stock market. With time the scenario has been changed.
At present, a huge number of millennials are opting for renting instead of buying a home. The major reason behind it is- that a huge number of millennials have a large amount of student debt, and in that scenario, they do not want to take another debt in the form of a mortgage.
As compared to previous generations, millennials are also getting married and starting families in their later lives. The latest trend that we are seeing is older generations are now selling their homes to millennials.
At the same time, they are renting condos or apartments. In the meantime, millennials are buying homes, continuing to rent and invest in real estate properties.
Reports say that around 55% of millennials are interested in real estate investing. With more money in their bank account, they will lead the housing market charge and also change the overall real estate investing forecast. To know more, you can visit https://www.teifkerealestate.com/.
So, it is true that millennials are interested in real estate investing. Now the question arises, “why are millennials interested in real estate investing?”
Here, in this article, we will find the reasons behind this. So, let’s get started.
In the United States Of America, millennials are the largest age group. People who are born between the years 1982 to 2000 are considered the millennial generation. As per the resorts, in the United States, there are more than 75.4 million millennials.
So, we can see that the millennial population in the USA is greater than any other generation. They not only have the greatest impact on the shifting of the housing market, but they will also continue to have the greatest impact.
Millennials are also the people who are investing in the stock market, but they believe that when it comes to producing ROI or returns on investment, real estate always has the power to generate greater returns.
There are several reasons behind this mindset, and one of them is that during the economic downtime of 2008, many millennials were graduating or in college and faced a lot of trouble in finding a job.
However, the housing bubble burst and also contributed to the stock market crash; millennials always remain skeptical of investing in the stock market. In 2007, around 66% of Americans were investing in the stock market.
Just after ten years, only around 50% of Americans were investing in the stock market. When the rest half is thinking about investing in real estate, the statistics of real estate investors is clearly showing a shift in the strategy and preference of the investor.
American Modern Insurance Group conducted a study, as per that 86% of millennials are planning to own a home someday, although right now, they are choosing to rent.
At the same time, 85% of millennials agree with the fact that real estate is indeed a good investment.
Experts state that, as this generation has gone through the Great Recession of 2008, they value real estate more than any other types of assets, such as intangible stocks.
The feeling that millennials have towards the stock market is nothing but the lasting side effect of the greatest economic downturn since the great depression.
It is really interesting that the trend of millennials investing in the real estate space is hugely different and also continues to be the most preferred investing method.
Although millennials are the owner of a bad reputation for being lazy, they are actually proving themselves to be savvy investors who are producing greater returns on investment on an overall basis.
With population and job growth, monthly cash flow opportunities, and appreciation potential, this particular generation has noticed a constant rise in some particular real estate markets.
Millennials are more visually driven; this is why they found owning a tangible real estate asset more appealing than any intangible asset, such as stocks. Previously for the younger generation, it was really difficult to invest in real estate.
It is because real estate investment used to require a huge amount of money and a down payment. At present, all those real estate investing online platforms offer lower-cost options via crowdfunding to real estate investing.
The major benefit of having a tangible asset instead of stocks is the appreciation potential for buy-and-hold investors. History has already shown that eventually a property will appreciate or grow in value even though the housing market has been struggling for a number of years.
When savvy millennials are investing in strong markets, they expect steady monthly cash flow from their investment in real estate property.
In recent years, online real estate crowdfunding has picked up. This online crowdfunding lets people invest in real estate for a really smaller initial investment. For an initial investment, there are a lot of crowdfunding companies that need something between $500 and $5,000.
At the same time, the millennials also do not need to bother about dealing with the time and hassle of being a landlord, as most of the syndication or crowdfunding companies outsource property management for all those maintenance tasks.
Apart from all these, there are also some additional reasons why millennials are so attracted to this type of investing. They are;
- Low costs,
In addition to that, it can be easily accessed and managed online. This is another major driving force for millennials to become real estate investors.
The real estate industry has so many new opportunities for people of all ages to invest in. Therefore, in the past few years, we also can expect the housing market to shift continuously.
Generally, when it comes to real estate, millennial investors are seeing a greater potential return on investment than the stock market.