El Paso Investors Club

According to the NAR’s 2017 Student Loan Debt and Housing Report, the U.S. currently has a student debt load of $1.4 trillion, which accounts for 10% of all outstanding debt and 35% of non-housing debt. As this debt rises, homeownership has fallen among the younger generations.  However you want to look at it, they will still need a place to live…Happy Friday

This infographic contains highlights from the 2017 Student Loan Debt and Housing report.

Millennials numbered around 80 million people last year, making them the largest living generation.  As we continue to post more information and data about this group we recently came across a study from the Pew Research Center that said while Millennials might be the largest group but they lag in the number of households their members head.

Indeed, with that in mind Pew also came up with five facts about Millennial households:

1. More Millennial households are in poverty than households headed by any other generation.
2. Millennial households dominate the ranks of the nation’s renters.
3. About half of cohabiting-couple households are headed by a Millennial.
4. In 2016, Millennials for the first time surpassed all other generations in number of household heads who were single mothers.
5. Among heads of household, Millennials in 2016 became the generation with the largest number identifying as multiracial.

“Looking at households is important because many economic and spending decisions, such as whether to own or rent a home, tend to revolve around the household rather than the individual adult.”

Click here to read the full story at Pew Research.

What are the 4 reasons everyone should include real estate in their investment portfolio?  That’s a great question and one that Fortune Builders recently answered in this informative infographic.  After all, a diversified portfolio is key to financial freedom!  Happy Friday!!!

Hat Tip to FortunateBuildlers.

A recent deep-dive survey by RealtyShares found that over half of millennials they polled were interested in investing in real estate.  The data also found that the public generally lacks awareness regarding the potential of real estate investing, however the findings of this poll suggested that a real estate investing resurgence may be on the horizon.  Happy Friday!!

Click here to read the full report on ReatyShares.

A recent Housing Perspectives from Harvard’s Joint Center for Housing Studies says that even though overall construction is down, construction of smaller homes (under 1,800 sq. feet) has actually increased 20% in 2016.  They say this is significant because 1st-time and lower income buyers tend to purchase smaller homes – which tend to be less expensive.  They suggest that continued increases in the supply of smaller homes, as well as townhouses and condos, could help meet the demands of  those first-time and lower income homebuyers.  Sounds like a good play for investors.

“Increased demand for entry-level housing and the corresponding uptick in smaller housing construction have already contributed to the growing number of first-time homebuyers in 2016.”

Click here to read the full report.

The Lexington (KY) Herald-Leader is reporting that a group called American Farm Investors is buying up tracts of farmland in central Kentucky which they lease back to tenant farmers, who in turn farm the land and pay rent from their proceeds (not sharecropping).  Interestingly, the corn and wheat grown on these farms is sold to big name whiskey distilleries like Jim Beam, Makers Mark and others.   The Herald-Leader also reported that roughly 40% of AFI’s investors live in Kentucky while the rest are from out of state. The bottom line;  it’s all about diversification.

“AFI leases its land to tenant farmers who pay labor and other costs to grow the crops. The tenant farmers pay rents to AFI, which then pays dividends to the investors.”

Various indicators are coming out that suggest America’s cities are trending towards renting – including a post we had back in March showing that over half of the nation’s largest cities are majority renter.  With that in mind, CNBC’s Realty Check with Diana Olick recently reported on yet another study that supports that emerging trend as well as showing where home prices are so high it may be smarter to rent rather than buy.

Click here to watch on CNBC’s Realty Check.

According to the latest U.S. Home Flipping Report form ATTOM Data Solutions, over 43k single family homes & condos were flipped nationwide in the first quarter of 2017, down 8% from the previous quarter and down 6% from one year ago, to the lowest number of homes flipped since Q1 2015 — a two-year low.  However, when it comes to financing said flipping, an estimated $3.5 billion was spent – the highest level since Q4 2007 and a 9-year high.  In addition, home flips in the first quarter were 6.7% of all single family home & condo sales, up from 5.8% in the end of 2016 and unchanged from one year ago.

“The business of financing for home flippers continued to grow in the first quarter of 2017 even as the home flipping rate plateaued compared to a year ago and average home flipping returns decreased for the second consecutive quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.

Click here to read the full report on RealtyTrac.com.

Is a lack of having a down payment holding back renters from buying a home?  A new survey from Zillow found that nearly 70% of renters in 20 U.S. metros said that was the case.  When you consider that the U.S. homeownership rate hovering near an all-time low, rents at record highs, and mortgage payments cheaper than rent in all but two of the 35 largest U.S. metros, the findings certainly seem to make sense.  Zillow’s Housing Aspirations Report (ZHAR) also found that:

• Millennial renters are more confident than any other generation that they will be able to afford a home someday.
• The majority of respondents (66 percent) believe owning a home is necessary to live The American Dream, and 72 percent believe owning a home increases your standing in the local community — millennials believe these two statements more than any other generation.
• About half of renters surveyed said debt and qualifying for a mortgage were barriers to homeownership.
• A 20% down payment on a typical U.S. home costs more than two-thirds of the national median annual household income. In pricier markets, it can cost more than 180% of the average annual income.

Click here to read the full report on Zillow.

The folks over at FortuneBuilders remind us that there are number of benefits to owning rental properties – from preparing for a financially stable future, tax deductions, property appreciation and to having a reliable cash flow.  To those ends, they recently put together this handy infographic with the Top 10 Markets for Owning Rental Properties…..Happy Friday!!

Whether you are just launching your real estate career or you’re already a seasoned professional, owning rental properties is a great way to accumulate long term wealth, prepare for retirement, and diversify your investment portfolio.  Than Merrill