In the past few months, the housing market has seen a number of reports indicating a shift from single-family homes to a rental-based market, which essentially shows that investors are more often leaning toward multi-family real estate investments. Interestingly, younger Americans are also becoming part of the multi-family market after moving out of homes with parents or roommates.
Thanks to high unemployment rates and low paying jobs post-graduation, younger people are struggling financially. Add to this the difficulty many face in obtaining a mortgage, and we’re looking at a generation of people who are choosing to rent indefinitely. And it isn’t just the lower class that happens to follow this trend—the much forgotten middle class is among those who are choosing to rent.
So what does this mean for investors? Well, it is clear to see that it is fast becoming the era of the landlord. For many looking to make passive income, this means a potentially more active role in property management.
If you’re following real estate guru Jason Hartman’s advice, you’ve probably begun to develop an investment portfolio that has some variety. For many, this includes real estate, but the particular kind of real estate investment may vary. Maybe you’ve been looking at industrial or commercial properties, retail, mixed use, or real estate investment trusts—but now is the time to focus on the residential.
Residential real estate might include single family homes, apartment buildings, duplexes, townhouses, or vacation homes where a person or family pays to live for a set amount of time. If it’s been your style to buy a house, improve it, and sell it, now might be the time to rethink your strategy. By investing in residential real estate, you begin to set yourself up for a lifetime of income opportunity.
Once you’ve secured your property, you’ll have a few decisions to make, which will include whether or not you choose to manage your property yourself. While there are a number of pros and cons for each, it will depend upon your particular situation. Self-management provides an additional avenue through which to make money, given the amount you’ll save. If you have a small enough property, this can be done in addition to your more traditional 40 hour per week job. Of course, you can always go big and make property management and investing your full time career.
The Young Wealth Show