It’s common today to hear social observers discuss how the priorities of Millennials have shifted away from their elders, the Baby Boomer, and Gen X.
They say that most Millennials are not interested in buying homes and being saddled with a mortgage for 15 to 30 years. Rather, they are opting for a “lighter” lifestyle that allows them to be fluid, travel, and not be pinned down to the kinds of 9-to-5 jobs conducive to buying homes.
Well, take all those assumptions and toss them on the scrap heap of misguided punditry.
Statistics clearly show that Millennials are driving a surge in home buying. Amazingly, it’s those in their late 20s and 30s leading the way. While “experts” have given us the impression that Millennials have adopted a “gig economy” lifestyle that’s highly mobile, it seems more of them are opting to put down roots.
Stuart Eisenberg is the national director for construction and real estate BDO USA, a prominent accounting firm. He said Millennials have had some time now to pay off student loan debt and to get settled in their careers. He expects this youthful demographic to play “the disruptor role” in the real estate sector with an accelerated home-buying pace in the coming years.
Millennials are also shifting the way house buyers traditionally seek a permanent place to call home. They are far more likely to use mobile tech devices in their search for properties. This, in turn, will cause an adjustment in the way real estate agents choose to develop marketing strategies. The National Realtors Association reports that 99% of Millennials employ online searches for general information about the housing market. They also prefer text messaging as their preferred way to interact with real estate agents. Baby Boomers still prefer live phone conversations or face-to-face meetings.
Furthermore, Millennials are blowing right past smaller starter homes and opting for upscale models in suburbs and the rural edges of larger cities. The trend is to avoid costly inner-city properties. The COVID-19 factor is partly driving the latter phenomenon.
Ten years ago, few would have predicted the Millennials would be driving a trend toward increased demand for more expensive homes located in suburbs and rural areas.
Technology is disrupting many industries. Even a sector as old as real estate is being affected. Here are some innovative real estate technologies that are changing the scene.
New Buy and Selling Platforms
Platforms like Redfin and Zillow are emerging. They’re making it easier for consumers to directly sell their house on their own, without an agent. “For Sale By Owner” (FSBO) was previously difficult to do but the advent of the internet changed things. Real estate has very high fees, typically 5-6% of the selling price. These new platforms can save sellers a lot of money.
Sometimes potential buyers are in a faraway city. Or they’re unavailable during an open house. Either way, they’d benefit from a virtual walkthrough of the property. This is easy to do with some low-cost apps available.
With the technology available today, you can stage a property by digitally adding furniture. You can also create realistic photos even before construction starts.
Drones have already found a couple of use-cases in society. For real estate, they can be used for aerial photography. A flyby would be a great way to get a feel for a neighborhood.
As of now, it’s difficult to move a drone around a tiny, enclosed place. This means drones aren’t good for exploring the interior of a house.
Currently, you can plugin to the MLS (or another real estate database) that you want a studio or a four-bedroom house. In the future though, AI will be able to make recommendations based on your values, personality traits, and preferences.
Chatbots are rapidly improving every year. They’ll be able to answer questions from customers. Eventually, they’ll be able to accompany clients to real estate showings. An agent might be able to take on more clients or lower their fees.
Along with AI, big data will assist in making personalized recommendations. The more data a company has, the better it can make data-driven decisions.
For any Millenials considering or even beginning to scope the real estate world, you’re on the right track. Real estate investing is one of the smartest moves anyone could make, considering the versatility and potential returns. Investing in property comes with neat benefits like passive income, tax benefits, and full control over not only the property and your investment strategy but also your profits.
That being said, deciding to invest in property can be super daunting. Where do you start? What do you do with the property?
To nudge you in the right direction, here are some essential things that Millenial real estate investors should know before jumping in.
Know your budget and credit score
While it’s not necessary to be wealthy to invest in real estate, having some savings will help buffer any risks from investing or at least reduce the uncertainty.
Establish a financial goal and investment strategy
Know your goals and the best plan to get there. Generally, most investors don’t need to pay for an entire, say $250,000 property. This is for the Millenials who are still struggling to pay off school debt: don’t worry, you can invest as well. The cool thing about real estate investing is you can purchase most properties with a down payment, which tends to about 20% of the total price. Options like getting a bank loan or lending from a trusted partner are also helpful for millennial real estate investors with limited cash at their disposal.
Scope the market
Knowing where to look for viable property options requires looking at patterns like population growth, rental demand, and job availability.
Consider the type of property.
Here, you have a few choices at your disposal. The top types of real estate include single or multi-family properties, syndications, or buy & hold turnkey funds. Single or multi-family properties are in high demand and involves a short-term strategy. Syndications are larger, commercial properties with a group of investors, resulting in less risk. Turnkey real estate funds are longer-term investments that offer immediate passive income from tenants already living there.
When you know the type of property you’re looking for, it’s time to take a look at locations you’ve identified based on the real estate market. With your budget in mind, figure out if you want to flip a house or if you’d rather be a long-distance landlord for a turnkey property.
Above all, millennial real estate investors must continue learning and growing. While the first step is to try it out without hesitation, further education will make Millenials savvier in their real estate journey.
The most popular choice among real estate investors, the single-family house, is well understood and profitable. Even in a market prone to recession, many people prefer single-family homes over condominiums, duplexes, or triplexes when it comes to investing. However, not everyone is delighted at the idea and wants to follow that route. Some investors may consider investing in multi-family units. And multi-family dwellings, especially with fewer units, tend to increase the value that matches closely with single-family homes, and their cash flow is a lot better compared to single-tenant dwellings.
This information talks about the details of finding a multi-family property and offers insight on why it can be a pleasing alternative.
Location, Location, Location
Location is of absolute importance in determining the value of a multi-family property. When the neighborhood has well-maintained lawns, quality homes, clean sidewalks, and proper signaling at intersections, it’s easier to find tenants. If there is construction activity in the neighborhood, it’s a sign of growing demand. On the flip side, if crime is on the rise in a particular area, people want to move away, reducing the neighborhood’s overall value. A change in zoning from residential to mixed-commercial use can result in a significant price reduction.
What is Inside Matters
The physical condition of the property, age, and structural stability have a noticeable effect on property value. The choice of paint color, cabinets, countertops, and flooring material matters too. The more bizarre the upgrades, the more likely that it’ll lose its market value. Likewise, the quality of craft, both in terms of original construction and recent upgrades, should be considered before purchasing a multi-family property.
Hiring a Real Estate Agent
A real estate agent can help find a multi-family property unless you insist on doing it yourself. With an agent’s assistance, you can easily wade through many unique situations, questions, and doubts that are usually not encountered in a typical single-family home buying. For example, your loan interest rate and type of purchase ( residential or commercial ) will depend on whether you are buying a duplex or an apartment with five or more units. Should you hire an accountant as well? Probably yes, if the number of units and complexity of your overall tax situation increase.
Homeowners often buy and sell their property. The most important aspect of a house listing is to be seen by as many people as possible to increase a sale’s chances. Despite a general market saturation in the housing sector, it is possible to achieve a higher listing and to reach a wider audience with a few tips and tricks as outlined below.
Invest in SEO Marketing
Search Engine Optimization is a tool that, when used properly, gives homeowners a competitive edge when it comes to online searches increasing home showings. The house listing is prioritized through specific keyword searches. It is advisable to have several long keyword phrases that include the general scenery where the house is located.
Make use of a Lockbox.
A lockbox is becoming one of the avenues that are giving homeowners a competitive edge. It allows the agent to show the house to house hunting individuals even when you are not home. It should ideally be located close to the house so that the agent can have easy access to it while you are away.
Host an Open House Event
One way to pull in the masses to a house showing is to host an open house event. Employing channels such as social media, the local newspaper, and website listings will attract many interested buyers locally. During the event, it is crucial to keep the guests entertained by serving snacks, having brightly lit balloons and banners, and having a magician or clown entertain them.
Offer Time-bound Deals
Proposing a good deal that runs out in a limited time is another way to get people looking into the property. Scarcity induces demand. Since everybody wants a good deal, they will be more motivated to purchase soon if the offer is only on for a limited time.
Any homeowner’s goal is to make the most amount of money they can from selling the property. However, sometimes pricing it at the higher points doesn’t work in favor of the home seller. Having a competitively priced house allows buyers to get it at the listing type’s estimated market value.
A combination of the above tips gives a home seller a competitive advantage, and the client handling the sale of the house can have a much smoother time as they coordinate the sale on behalf of the homeowner.