Do You Believe Homeownership Is Out of Reach? Maybe It Doesn’t Have To Be
As it turns out, millennials aren't the generation that rents apartments. According to Mynd's 2022 Consumer Insights Report, some millennial and Gen Z homebuyers are pursuing homeownership as a strategy to increase their wealth, however this may not be exactly how earlier generations did it. According to the survey, they are entering the market as follows:
“. . . younger generations of Americans are not buying into that dream in the same way that older generations have. A growing number of Americans are choosing to make their first real estate purchase as an investment property.”
Some young purchasers are purchasing a home so they may use it as a rental rather than buying one and moving into it themselves. This strategy may be becoming more popular, at least in part, as a result of the difficulties with affordability brought on by today's increased mortgage rates. How many members of this group are contemplating this strategy is mentioned in the report above. It reads:
“Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.”
Why Younger Buyers Are Buying a Home To Use as a Rental
This method enables buyers to stay in their existing residences where they couldn't otherwise afford to buy, such as the busy metropolitan apartment complex or their beloved neighborhood. They decide to buy a house in a more inexpensive neighborhood with the purpose of renting it out rather than abandoning their dream of owning a home.
They are, in a sense, obtaining the best of both worlds. They still own a home where they can afford it and they live where they want.
Both passive income generation and asset diversification are priorities for them. The equity they accumulate in their home will enable them to increase their net worth over time in addition to providing them with a rental income stream.
If you're considering purchasing a home as an investment plan to increase your wealth, get in touch with a real estate agent to discuss your alternatives and potential neighborhoods where you might find homes that meet your criteria.
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