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Why Renting Is More Popular Among Young Adults Today

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On May 16, 2023

In Investing, Real Estate

In recent years, renting has become increasingly popular among young adults. Many factors contribute to this shift in housing preferences, and understanding the reasons behind it can provide valuable insights into the evolving real estate market. These key factors have made renting more appealing to young adults today.

Financial Considerations

Financial flexibility is one of the primary reasons young adults opt to rent instead of buying a home. Buying a house involves significant upfront costs such as down payments, closing costs, and home insurance. The overall homeownership price includes property taxes, maintenance, and repairs. Conversely, renting often requires a smaller upfront payment and allows for more manageable monthly expenses.

 

According to an article published by MyMove, many young adults prioritize flexibility and prefer not to tie up their savings in a down payment. They may have student loan debt or other financial obligations, making renting a more feasible and frugal short-term option.

Lifestyle Flexibility

Young adults today often value mobility and the ability to explore different cities or job opportunities. Renting allows them to relocate quickly without the burdensome process of selling a home. Renters can choose housing options that suit their needs and adjust their living arrangements as circumstances change.

 

There is a strong desire for lifestyle flexibility among millennials. Many young adults prioritize experiences over long-term commitments and prefer the freedom to move as their careers or personal lives evolve. Renting allows them to adapt to changing circumstances without being tied down to a specific property.

Affordability and Market Challenges

The rising cost of real estate and stagnant wage growth have made homeownership less attainable for young adults. Property prices have outpaced income growth in many urban areas, making it difficult for young people to enter the housing market.

 

Young adults have faced numerous economic challenges, including stagnant wages, high levels of student loan debt, and an increase in temporary or gig-based employment. These factors have made saving for a down payment and meeting strict lending criteria more challenging, leading many young adults to choose to rent as a more viable housing option.

 

Renting has become popular among young adults due to various factors, including financial considerations, lifestyle flexibility, and affordability challenges in the real estate market. The ability to prioritize short-term financial goals, adapt to changing circumstances, and avoid the burden of homeownership has made renting an attractive option for many young adults today. As the real estate landscape evolves, understanding these shifting preferences can provide valuable insights for both renters and real estate professionals.

How to Find Good Real Estate Deals in Competitive Markets

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On May 2, 2023

In Finance, Investing, News, Real Estate

The real estate market can be challenging and competitive, especially for investors looking for good deals. With so many investors vying for the same properties, finding opportunities that offer a good return on investment can be challenging.  

Work with a local real estate agent

A local agent will have a deep understanding of the market and will be able to help you identify properties that are likely to offer a good return on investment. They will also have access to off-market properties that may not be listed on popular real estate websites.

Look for distressed properties

Another strategy for finding good real estate deals in a competitive market is to look for distressed properties. These properties need repair or renovation and may be available at a discount. Distressed properties can be a good investment opportunity if you have the resources to repair or renovate them and bring them up to market standards.

Target niche markets

Another way to find good real estate deals in a competitive market is to target niche markets. For example, you could focus on properties in a specific geographic area or that cater to a particular demographic, such as students or retirees. By targeting niche markets, you can reduce the competition and increase your chances of finding good deals.

Use online real estate marketplaces

Online marketplaces, such as Zillow and Redfin, can be excellent resources for finding good real estate deals in competitive markets. These websites allow searches based on specific criteria, such as price range, location, and property type. You can also set up alerts to receive notifications when new properties that meet your criteria are listed.

Attend local real estate auctions

Real estate auctions can be another great way to find good deals in competitive markets. These auctions often feature properties that need repair or renovation and may be available at a discount. However, research before attending an auction and set a strict budget to avoid overbidding.

Network with other real estate investors

Networking with other real estate investors can be a valuable way to find good deals in a competitive market. By attending local real estate events and joining real estate investment clubs, you can connect with other investors looking to sell properties or who may have insights into off-market opportunities.

Be patient and persistent

Be patient and persistent when searching for good real estate deals in a competitive market. Finding a good deal can take time, and you may need to make multiple offers before finding the right property. However, staying persistent and keeping an open mind can increase your chances of finding the deal that meets your investment criteria.

Finding good real estate deals in a competitive market can be challenging but not impossible. By working with a local real estate agent, targeting niche markets, using online real estate marketplaces, attending local real estate auctions, networking with other real estate investors, and being patient and persistent, you can increase your chances of locating a good deal that offers a solid return on investment.  

 

What to Expect for the Real Estate Market in 2023

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On January 9, 2023

In Investing, Real Estate

The real estate market has changed drastically over the last few years. The pandemic brought a surge in demand for houses, followed by a freeze in the market as inflation and interest rates rose. That begs the question, what should we expect from the following year?

Most experts believe 2023 will bring a new semblance of normalcy. That means the market will settle down and return to more normal levels. Inflation should reduce or at least balance out, while interest rates will slow down. Let’s take a closer look at what to expect this year.

Housing Prices

Experts are quick to weigh in with their opinion on housing prices and values. Unfortunately, not all experts agree on this. For example, Realtor.com believes that housing prices will increase by another 5.4%, while Zelman believes the value will decrease by 5.1%. Ideally, these two extreme estimates will land in the middle, providing us with a stable market.

In other words, if we balance out the expert opinions on prices, it indicates little change. This means we’ll see a flat or neutral appreciation in 2023. This is good for sellers and buyers, as the market will not change drastically. 

Rate Lock-In Phenomenon

Mortgage rates hit a record low a couple of years ago, countering the current higher rates we’re seeing. This results in homeowners with a low rate (below 6% in most cases and below 4% in exceptional circumstances). That’s great for those homeowners, but they will unlikely consider selling their homes with an average mortgage above 6%. 

Homeowners are unwilling to give up their low mortgage rate in exchange for a higher interest rate. Some homeowners will sell regardless, either because of need or desire. But a large percentage will stay at their current home to wait out this shift.

Ironically, this is going to affect another market. Homeowners that wait out this shift may choose to work on home improvement projects. This will ultimately encourage a stronger contract market and increase home values – if done carefully. 

Reduction in Building

There will likely be a reduction in the number of homes built over the next year or two. Specifically, experts believe that builders will cut back on the number of new single-family homes they are constructing. Likewise, building permits will likely decline as homeowners settle in and wait for rates to change. 

What to Know Before Renting to College Students

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On December 15, 2022

In Investing, Real Estate

Landlords, as a rule, rent their properties to many different subsets of people, including students. However, there are certain things that landlords and property owners must know before renting to students.

Renting to a student is a great way to quickly fill a vacancy, give a young person a chance, and potentially make a difference in the community. The downside is the higher risks associated with this sort of rental. Here is what you need to know before you get started.

The Risks

As mentioned above, there are certain risks associated with renting to students. For example, most students will only need to rent a space seasonally, so renting to them may create vacancies in the summer. Likewise, most students will not have an extended credit history, putting them at higher risk financially.

There are other risks to consider, such as their lack of experience (including a lack of experience paying bills) and potential noise concerns (consider the stereotypical student behavior, and this one is clear). 

Students may also not understand basic tenant responsibilities, such as how to file a maintenance request. This may result in a little problem growing in scale when it otherwise could have been prevented.

The Positives

Don’t worry; there are positives to help balance these additional risks. There is a generally higher demand for student housing, especially near school towns and properties. So filling vacancies shouldn’t be an issue. This has a secondary benefit as it reduces the need for expensive advertising. Word of mouth will do that for you.

Since students have little experience renting properties, they will not go into this process with inflated expectations. In other words, they’ll be happy to get an apartment and won’t demand all the latest bells and whistles. They will happily accept a simple property with no upgrades.

Finally, the possibility of multiple roommates in a property can help to mitigate any financial risk. The more people on the lease, the easier it will be for them to make their monthly payments. As this is a common social expectation for students, frequent arrangements are already in place for this sort of thing.

Lowering Risk

There are additional steps a landlord or property owner can take when renting to students. These steps will help reduce the overall risk. For example, requesting a cosigner or guarantor will minimize the risk of property damage and ensure that the rent gets paid. Likewise, periodic inspections can help spot damage or other repair needs before they become a more significant problem.

Finally, it is critical to set expectations in the lease. This means laying out any rules, regulations, or rules to follow. Doing so in writing will protect you and make it easier for the students to find information as they need it. 

Ways to Get Organic Leads as a Realtor

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On November 9, 2022

In Investing, Real Estate

Every industry has unique tactics and requirements for getting things done. This is especially true for realtors, who must handle several elements of their own business. One such concern is generating organic leads as a realtor.

It can be challenging to create these leads, especially at first. It takes time and practice for them to feel more comfortable and organic. However, once you get the swing of things and establish a pipeline of leads, you’ll have no problem succeeding in the industry.

Networking

One of the most important things for any realtor to consider is networking. Networking can easily generate the most leads and should never be overlooked. Neighbors, coworkers, friends, etc., can all help generate word-of-mouth advertising. Each new professional connection you create introduces new opportunities.

In other words, to create a base for organic leads, you have to network. There’s no way around it, so get it done. If networking is intimidating for you, take some time to research tips & tricks. This will help you understand your strengths and weaknesses.

Branding

You’ve likely heard the term branding regarding a company’s image – but personal branding is something to consider. A strong personal brand can generate leads while you sleep if done right. How? Your name will be out there, traveling out (by word of mouth, advertising, and other branding techniques), even without your active participation. 

Put another way, the better your personal branding strategy, the more consistent your work can be. People will approach you with work, creating more organic opportunities to follow through.

Referrals

Never underestimate the value of a good referral. They’re like gold, showcasing your talent and reliability to potential clients. Referrals come in many forms. For example, it may be a comment from a past client on your website. Or it may be an associate forging a connection between you and a prospective client. 

Don’t forget always to show appreciation for these referrals. Especially the ones that have gone above and beyond for you. Encourage this behavior by sending them a thank you note or showing appreciation.

Social Media

Finally, don’t forget about social media. Social media is a powerful tool, with varying effectiveness depending on your goals and utilization. When using social media to generate leads, be sure you’re picking the right platform for your goals. For example, you don’t want to be on TikTok if you’re looking for leads in older generations. 

Finding your stride with social media marketing may take a minute, but once you’ve nailed it, the leads will come in. Just keep working on it and be willing to adapt your strategies.

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