The near end of the housing meltdown offers some huge potential for real estate investors. Here’s a bit of information that might make investing in rental properties an even better Idea.
While there is a very large number of “echo boomers,” children of the baby boomers, who should be buying their first homes, thanks to large quantities of student debt, this first time home buying decision will likely be delayed.
Check out this article from the Inman News:
By RICK PALACIOS
Student loan debt now totals $865 billion, which is greater than all credit card debt outstanding, as well as all other types of household debt except for mortgages.
College graduates have debt averaging $25,000. Even more troubling is the rise in debts associated with for-profit college and trade schools, whose revenues come primarily from debt available through federal government programs.
The debt load is so high, and the job outlook so bleak, that student loan default rates have almost doubled. With the economy little improved since 2009 (two-year lag on data), default rates are bound to rise further.
Student loans are going to be yet another hurdle for the housing market to overcome. Faced with mounting student loan debt, poor job prospects and stagnant wages, an increasing amount of 25- to 34-year-olds (a prized demographic for the housing sector) have moved back in with their parents. Almost 6 million 25- to 34-year-olds now live with mom and dad, up 26 percent from when the recession started in 2007.
Today’s 36.8 percent homeownership rate for 25- to 29-year-olds is at its lowest level since 1999, and homeownership for 30- to 34-year-olds is at its lowest rate in 17 years.
via Soaring student loan debt to delay homeownership, boost rentals | Inman News.
Well. This population still needs somewhere to live. They need to have a roof over their head. And while their high student debt levels will prevent many of them from buying real estate, the demand for rentals will increase.
One interesting thing about real estate investing is that rental properties can actually appreciate in value while, single family homes depreciate.
A large portion of rental home values depends on how much they rent for. How much income they can produce.
A savvy investor who buys a rental property at bargain bin prices right now, and then rents it out will see a large increase in investment, as well as an increasing cash flow.
If you’re interested in investing in Utah real estate, here are a few links that can help you find a great rental investment: Utah Investment Properties Salt Lake Multi-Family Homes.