DO YOU BELIEVE HOMEOWNERSHIP IS OUT OF REACH? It doesn't have to be!
You can still rent AND own a home, having others help you build equity and possibly passive income!
Building your wealth with home ownership and 'House Hacking'.
It turns out, millennials aren’t the renter generation after all. The 2022 Consumer Insights Report from Mynd says there’s a portion of millennial and Gen Z buyers who are pursuing homeownership as a way to build their wealth, but it may not be exactly the way previous generations have done it. The study explains how they’re breaking into the market:
“. . . 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.”
Instead of buying a home and moving into it themselves, some young buyers are purchasing a home so they can use it as a rental. This tactic may be gaining popularity, at least in part, because of the affordability challenges brought about by today’s higher mortgage rates. The report above mentions how many people in this group are considering this approach. It says:
“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 strategy allows buyers to continue living in their current location, like the bustle of a city apartment or a neighborhood that they know and love, where they couldn’t afford to buy. But instead of giving up on the idea of owning a home, they buy a home in a more affordable area with the intention of renting it out.
They also are buying multi-family properties and living in one unit, and renting out the others. The rent they receive my not fully cover the mortgage, but if what they have to make up is less than their current rent, they are saving money, AND building equity. Sometimes it's not even a multi unit property they are buying, sometimes it's a large house where they can rent out a room or two to a friend. A form of home sharing, again getting help with the mortgage, and building equity.
In a way, they’re getting the best of both worlds. They live where they want, and they still own a home where they can afford it.
Their goal is to generate passive income and diversify their assets. It works like this: in addition to having a rental stream of income, the equity they build in their house will also help grow their net worth over time.
If you’re thinking about buying a home as an investment strategy to build your wealth, let's talk to explore your options and nearby areas that may have homes that fit what you’re looking for. I would love to help you build your real estate portfolio!