Millennials aren’t buying, they’re investing in real estate

Green Escrow | Real Estate News

While many millennials find themselves priced out of the real estate market, many are investing in real estate in other parts of the country. Using online platforms such as Roofstock, they are able to pick properties on risk factors and various returns.

Generally smaller cities offer the best opportunities for consistent monthly returns. In some markets, appreciation of the real estate asset outpaces the monthly cash flow.

According to CoreLogic, 11 percent of single-family homes sold in 2018 were bought by investors, the highest percentage on record.

Real Estate Investing: The Pros

Green Escrow | Real Estate News

With the craziness of the real estate market, this might be a good time to consider real estate investment, i.e., where the property generates income instead of being a primary residence,

  1. Cash flow from rents: Higher rents these days are generally greater than mortgage payments.
  2. Long-term security: Real estate appreciation (see below) should bring in a guaranteed cash flow for years to come.
  3. Appreciation: Real estate properties are considered one of the most reliable sources of renewable capital as they tend to increase in value over time.
  4. Hedge against inflation: As inflation occurs the property’s value and rental income will also increase. However, the mortgage will remain the same.
  5. Tax benefits: Rental payments are not subjected to self-employment taxes and there may be other benefits such as depreciation and lower tax rates.