Greetings Valued Reader!
Recently we posted an article on the Real Property Management Facebook page from Fortune.com that offered some interesting numbers to explain the current 48-Year low in Home Ownership. The story centered on the report in the Wall Street Journal that home ownership was at it’s lowest since 1989. Of course many people are trying to figure out why this is but Chris Matthews of Fortune looked at some interesting statistics that stand out. He compared the low ownership rates to equally low marriage rates among low adults. The low marriage rates are in the treasured 25-34 year old demographic and this trend began before the recession which shows that it is a long term trend that is likely to continue no matter what happens with the economy. And as you will see it’s not just young adults that are staying single!
This is great news for the rental market because it means that the decrease in home ownership has more to do with larger social factors than it does with fluctuations in the economy. Additionally, the Fortune article reviewed statistics which show that mortgage rates are actually at their lowest in decades. This means that the cost to buy a home is lower that it has been in a very long time. So even though young people can afford to buy homes, they just don’t want to.
As Fortune wisely deduces this trend undoubtedly has it roots in the desire of young people to stay single longer. Of course the desire of the so-called Millennials to avoid the long walk down the aisle is a result of other economic factors such as the aging of the workforce. It is no secret that people are retiring later in life (and some are never retiring) as a result of deflated pension and retirement plans as well as the rising cost of healthcare. Basically, healthcare is better so we are able to stay working longer but it is also much more expensive so we have to keep working longer! It is a viscous cycle that leaves the youngest adults in our society scrapping it out for the entry level jobs that are available because all of the good jobs are being held on to by the older members of society.
As the Deseret News reports, the U.S. Marriage Rate is at a record low and it doesn’t take a genius to figure out that homeowners overwhelmingly tend to be married couples. Why else would you want to hassle with all of the headaches unless you were raising a family? If you are single you are (pardon the joke) ready to mingle and you cannot mingle if you are fixing your fascia on the weekend and pressure cleaning your sidewalk on your vacation!
So how can you as a rental property owner capitalize on this bacheloriffic trend?
The good news is that everything is working in your favor so you will be reaping the benefits of higher rents and lower vacancy rates without needing to do too much. But if you are a savvy investor (which you must be if you are reading this blog) then you will make young renters happy to live in your property by providing small (inexpensive) treats that will allow them to have a nice home to live in without having to work too hard for it. Small things like lawn service, pest service, regular check ups on the property and ease of rental payment that can all be provided by Real Property Management Miami will lead to happy young tenants that would rather pay a rental increase every year than deal with the hassles of buying a property of their own. If you want to really keep them happy you can also offer to have the interior or exterior of the property painted every couple of years; it’s amazing what a new coat of paint can do!
So if you pay attention to the numbers it is easy to see that this is an amazing time to be a real estate investor, all you need is a partner that knows how to make tenants happy and you won’t have to worry about your pension because your rental properties will be covering your expenses for a long time to come!
Thanks for reading check back soon for a new article on how to grow your rental empire!
– Real Property Management Miami
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