Comments Off on Millenials Won’t Be Moving Out of Duplexes Soon
Is there a reason investment properties continue to be among the hottest sectors of the real estate market?
The answer may be found with millenials. After all, a recent study by CoreLogic found that 60 percent of applicants for rental housing between 2011-2015 were millennials.
And that means student loan debt.
The total amount of student loan debt in the U.S. has mushroomed from $380 billion in 2004 to $1.3 trillion in 2015. The only collective consumer debt that’s bigger is mortgages.
Nearly half of all millenials (48%) in 2015 had student loan debt. This represents a 10 percent increase over just 8 years ago.
The average amount of student loan debt was $31,900 for adults between the ages of 20-34. In 2008, this average was $22,500. The median balance was up 53.7 percent to $18,600; an increase of more than $6500 over the $12,100 median in 2008.
Repaying this debt may be the reason so many of today’s renters are millenials.
With no sign of this changing soon, odds are millenials will continue to rent, keeping vacancy rates low.
Low vacancy rates mean higher rents, which make it a great time to be a landlord.
Comments Off on Make Your Vacation Home A Great Investment
If you already own a home or live in your duplex, you may want to explore the possibility of buying a vacation home for your own enjoyment, and as an investment.
If you’re purchasing an investment property in today’s mortgage market, you’ll be required to put 20 or 25 percent down.
But if you’re purchasing a second home, such as a winter residence in a warmer climate or a cabin on a lake, you are only required to put 10 percent down. The property must be a single family residence. In other words, it can be a condo, townhouse or house. It cannot be a duplex, triplex or apartment building.
Lenders are not asking you to live in your second home a minimum number of days or months in order to qualify for this loan. You may go for one weekend or for six months.
When you’re not there, you can leave it vacant. Or, rent it out as AirBNB or VRBO.
In other words, you can have short term residents buy you a vacation property.
Want a cabin up north or a condo on the beach? Why not let someone else buy it for you?
All the principles of duplex investment apply to vacation rentals as well. You just need to know how to use them.
Comments Off on Minneapolis Real Estate Still The Best Investment
Last month Bankrate released its latest Financial Security Index poll, and discovered one fourth of the respondents said they would rather invest in real estate with money they won’t need for the next 10 years.
That doesn’t sound like a lot until you look at the rest of the numbers.
Real estate beat out CDs and savings, which just 23 percent of those polled thought was a good place for a long term investment. Sixteen percent of those surveyed thought the stock market or precious metals would yield the best 10 year strategy, and just 5 percent thought they should put their money in bonds.
Due to the dot-com crash of the early 200s and the slide of the financial crisis of 2008-2009, many people don’t trust the stock market. This holds true in spite of the fact the stock market has benn on a bull run (when prices rise and investors are confident in the market) since 2009.
Real estate may inspire investor confidence, in spite of its own crash during the financial crisis, as a result of it being a tangible asset that, as an investor, you can see and touch.
While it may not be as liquid as money in a savings account or even stock, if the return isn’t what it should be, can you physically improve or manage differently to help change your rate of return. An investor may improve their cash flow by doing something as simple as picking up a paint brush, cleaning up the yard, or screening tenants more stringently. It’s tough to that with a stock.
If you believe real estate is a great investment, but aren’t sure how to get started, give me a call or email me. You’ll see why so many people believe it’s the best possible way to make sure you’re protecting your financial future.