Young buyers are looking to investment properties to build wealth | Job Binary

young couple in front of the house

© monkeybusinessimages – iStock/Getty Images Plus

According to a new survey by Mynd, a technology company that uses technology to help investors buy, finance and manage single-family homes, a growing number of young adults are establishing an alternative path to building wealth through home ownership, prioritizing the purchase of investment properties over primary residences. – renting out family property.

Forty-three percent of people over 40 say they are considering becoming “renters,” continuing to rent out their homes while maximizing income from investment properties, according to Mynd’s 2022 Consumer Assessment Report. That compares to just 9% of baby boomers and 27% of Gen Xers who use the same wealth-building strategy. Some first-time investors see it as an opportunity to make more money and live better in bigger, more expensive markets, the report said.

“Young people are discovering that buying investment property gives them the best of both worlds: they can live wherever they want, including in cities where they can’t afford to buy yet, and still be a homeowner. polling is still an important part of their American dream,” said Doug Brien, founder and CEO of Mynd. “Buying an investment property means they can go about their lives, work and goals without having to worry about it, and they can still benefit from the diversification, appreciation and tax benefits of real estate investing.”

With the economy on the brink of recession, portfolio diversification can become a big priority for prospective buyers. Brien notes that many millennials who came of age during the Great Recession in 2008 saw their parents and others suffer huge financial losses because they defaulted on their mortgages. “This group is also skeptical of the stock and bond markets,” says Brien.

But young adults are more optimistic about real estate’s long-term potential. Brien says he believes most young people buying investment properties are looking at it as an investment to live with one day, not necessarily as a step towards buying a primary residence.

Remote investor

Remote investing is another trend that helps first-time investors jump on board. More than half of Mynd’s properties are owned by out-of-state investors. The company predicted that number will grow as technology makes it easier to buy and manage investment properties remotely. That doesn’t seem to be a scary thought for consumers: Seventy-two percent of the more than 1,000 survey respondents said they would consider buying an investment property in a city or state other than where they live.

“For decades, the real estate investment class seemed too complicated and intimidating for many consumers,” says Brien. “Fast forward to today: Consumers now have access to multiple tools and platforms that demystify the real estate investment process.” He added that Mynd’s mission is to help inspire a new crop of investors who “were previously too intimidated by real estate or limited to investing within working distance.”

Tech real estate management companies are introducing tools to help novice and experienced investors find, finance, buy and manage real estate remotely.

As recession fears intensify, single-family rental investments may become an even more attractive asset class, Brien says. “As inflation rises, rents are bound to rise, increasing the potential cash flow for property owners.”

28 percent of survey respondents say they are currently considering purchasing an investment property, despite the current economic climate. “As the Federal Reserve raises interest rates to suppress inflation, that could also affect the demand for rental homes,” says Brien. “If financing for a purchase becomes more expensive for potential buyers, fewer will be able to afford it. This will increase demand for single-family homes and put upward pressure on rental prices.”

Source link