Compared to boomers, it’s no secret that millennials are more educated yet less compensated. It’s also not surprising that their circumstances are reflected in the real estate market.
Millennials are slower to spread their wings and leave the nest for a few different reasons. Two examples: They like to travel and starting a family is further down on their “to-do” list.
Online real estate investing has changed the game for young home buyers and investors. Here’s how millennials are investing in real estate and how you might want to get in on the action.
Crowdfunding Real Estate
If you’re new to the real estate investment industry, crowdfunding platforms and startups have become popular in recent years. One of those startups, Roofstock, lists single-family rental homes as an investment opportunity.
Real estate investing might appeal to you instead of owning a primary residence. Think of it as buying your first home with initial cash investment and then your tenant makes the monthly payments.
Roofstock lists homes all over the country and displays your potential return rate. For example, if you invest in a $385,000 home right now with 40% down, you’d see a 5-year return rate of $109,483. On the other hand, if you buy a $45,000 investment property, you could see a total return of $28,377 in 5 years and $295,079 in 30 years.
Browse Roofstock’s active listings for more information.
Steps to Invest in Roofstock
Buying a rental property on Roofstock is simple. Ask yourself some preliminary questions such as how much you want to spend, what you want to put down and if you’ll finance your investment. From there, you’re just four steps away from being a real estate investor.
- Start by searching for available properties. Use filters to show only the homes in your price range, city, condition and other desirable attributes.
- Once you find one that piques your interest, analyze it. Look at the pictures, reports, neighborhood ratings and property management options.
- Decide on a property and make an offer for free. Roofstock will then accept or decline your offer and you’ll be charged a marketplace fee of 0.5% or $500, whichever is greater.
- Close on your new investment property! This is done completely online and you’ll be guided through the process by the Roofstock team.
Your Real Estate Investing Playground
Data from Roofstock reports that millennials are buying up rental properties at high rate in the following cities:
The average sale price is between $70,000 to $135,000 in these areas. Millennials prefer to look at investment properties in cities where the population is projected to grow, the average rent is affordable and offers attractions and nightlife and great schools.
Full-time Gig to Retirement
If you’re a millennial with sights set on financial freedom and retirement by 50, real estate investing could be a home run. This type of investment can give you consistent monthly income and an asset for life.