Today’s REI Classroom Lesson
As many of you have heard, more people are renting these days than buying. Steve Rozenberg explains your opportunities with the growing number of renters in the country.
REI Classroom Summary
Renters these days are all age ranges due to changes in the economy and outlook on life. If you have a property to rent out, consider who would be your target market and make sure the property will fit their needs (Think of what a baby boomer might look for in a property vs. someone fresh out of college).
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Steve: Hi. This is Steve Rosenberg with Empire Industries Property Management Company, located in Houston, Texas. And today I’m proud to represent the REI workshop, and we’re going to talk about more renters, more opportunity.
Mike: This show was sponsored by passiverental.com.
Steve: And in different parts of the world I get a lot of different people talking about renters, especially in the U.S., and a lot of people will tell me, there’s more renters, there’s less renters, there’s . . . it’s a micro-economy in this area. Everybody has a different analogy. And the reality is, is that there are more renters out there. Almost everywhere is at a deficit of properties and an abundance or renters.
So, one of the main reasons that there are a lot of renters out there, in the first and foremost indication, is the Millennials. And whether you know it or not, the Millennials are the fastest growing population in the world right now. There are 92 million Millennials out there. And one thing to note about Millennials is this is the age bracket between 18 and 34 years old, okay? And they are delaying home purchases.
So normally when people are getting into the early 30’s, late 20’s, they are starting to make home purchase acquisitions to purchase properties to live in. They are not doing that. Millennials are staying as renters. They are kind of what they call the throw-away society. They don’t have cars, they take Uber. They throw away their phone every year and get a new one. So, they are used to not having ownership of anything. They like the renting mentality. So they are renting.
So if I was an investor and I was thinking of renting to Millennials, I may want to invest in properties maybe in a midtown or downtown area where a lot of the younger people are working and they want to rent. I may make my home more of a technologically advanced property with WiFi and other things that are going to make it easy, a lot of plugs and USB ports in the walls to make that more Millennial friendly. So that’s the first set of groups that they’re not moving. They’re kind of in a stall, if you will.
The next set is you have a younger generation that is moving up into the ranks that are the whatever generation they’re being called. And they’re moving into becoming renters, and they’re kind of bumping up against the Millennials because the Millennials have not left. So what you’re seeing now is you’re seeing two groups that are now fighting for the same sets of properties, okay? On top of that, you have a lot of companies downsizing, so people are losing their jobs. So you’re seeing a lot of people in their 40’s and late 30’s that are losing their jobs that are becoming renters again. And they’re starting to rent properties now.
And finally, you have a lot of the Baby Boomers. They’re moving out of their large mansion properties and they’re moving in to rental properties. So you almost have a trifecta of rental people that are all combining and battling for the same rental property. As an investor, that tells me that I can bring prices up because it’s price and demand and there’s more people that want to rent my property. So instead of me having one person that wanted to rent my property, I now maybe have 20 people that want to rent my property, so I can be more selective, number one. And number two, I can maybe charge a higher price demand if I’m fitting the right profile of that type of renter.
So, there’s definitely an abundance of renters, and this is a great time to buy properties because there are only going to be more and more of these renters coming into the rental market. So I hope this helps. This is Steve Rosenberg with Empire Industries Property Management. Thank you.
Mike: Passiverental.com is your source for turnkey, done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit passiverental.com to learn how to purchase cash-flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting passiverental.com.
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