Are you part of Generation X, the generation society claims is now despondent and directionless through the disappointment you supposedly have that your future isn’t as bright as you thought it would be? You know, the babies of the post-war Baby Boomers. If you were born (give or take a year) between 1965 and 1980, you are one of the approximately eighty-three million members of Generation X. So what does that mean for you in terms of your future? It means that despite unfulfilled ambitions or over-achieving parents, you can still control your life. Start investing in yourself by investing in real estate
Where is Generation X in Today’s Real Estate Market?
When it comes to those in Generation X, let’s be honest and admit that the real estate market has not be kind at all. They grew into their 30s and 40s at the exact point in time that the 2009 housing crash occurred. Generation X-ers were disproportionally represented among those who greatly suffered from the collapse of the market. Many lost their homes through foreclosures and short sales and were forced to then rent homes or apartments. Their credit was destroyed with little hope of restoring it and securing a mortgage again any time in the near future.
Still others had taken deeper steps into the real estate market, becoming landlords or setting up their own real estate businesses. As those tempting ARMs (Adjustable Rate Mortgages) veered higher and higher, people who had been doing well suddenly found their finances crashing to earth around them. Even with all that, a majority of Gen X-ers today do own their own homes. According to the National Association of Homebuilders’ Eye on Housing (April 2016), 63.5 percent of them do. They found that it is possible to protect yourself from financial difficulties and market dips. The key is all about where and when you invest. So while there were horror stories from 2009, a greater portion of the Gen X-ers sailed through the troubled times. Now out the other side, they are looking to invest their money in the newly stabilized real estate market.
There are identifiable characteristics to the real estate purchases of Gen-X-ers. Unlike their Baby Boomer parents, they don’t want to trade up as their affluence increases. They tend to buy with the idea of staying in one home for most of their adult life. They statistically seem to prefer new-build homes. These two behaviors combined leaves only a small slice of the real estate market open for Millennials just entering the market. It has also caused the cost of retirement homes of Baby Boomers to rise. But the key point is that Gen X-ers are still buying homes and these statistics are steadily rising after the calamity of 2009. They do not want to be renting.
With a more stable market and stronger financial positions, some may also now consider begins to invest in real estate. If you made all your payments and have solid credit, you are ready to take the plunge. And even if you didn’t, you can still prepare for your future.
Where Should Generation-X Invest Their Real Estate Dollars?
Real estate investments offer the opportunity to make some serious money as well as to gain control over your dreams, your work and your life. There are three areas to consider for real estate investments buying to sell residential rentals and commercial property.
Research indicates that Gen X-ers look for different things in their homes than Baby Boomers or Millenials. If you want to buy to sell, invest in what you know – properties that appeal to your own generation. This way you’ll have a handle on how to market the homes and how to sell them. For example, a Gen-X-er would probably rather have a home office than an extra bedroom. Their lifestyles don’t really call for a formal dining room or a separate formal living room, so these rooms would be completely redundant. Research also indicates they want lots of storage. Lots of kitchen storage and closets are also high on their lists. Energy efficiency is rising on their lists and yards are a must. They grew up with them and want them for their pets. If this sounds like the type of home that appeals to you, try selling these styles to others of your generation.
On the other hand, many Millenials choose to continue renting (or have to, since they can’t afford a starter home yet.) If you don’t want to buy to sell, why not make money off this choice? Be sure you know what you are getting into first, however, because becoming a landlord is not for everyone. It’s a great deal more work than handing over the keys and collecting the rent. Tenants expect you to be on call 247 and to fix their problems within a few hours. Then again, you can hire a property manager or buy through a turnkey company to take over all the management hassles for you.
Lastly, you can invest in commercial real estate. With a lower liquidity rate, and a better chance of finding long-term tenants, this is usually the most common path for future – minded investors. A steady, reliable income from commercial renters can boost a retirement fund. and is probably the soundest investment.
Final Considerations and Conclusion
There are stereotypes about Generation X that survive today. Here are just a few of them:
– The generation of instant gratification
– Brought up in comparative wealth
– Few have ever been to war
– Many may be divorced
What, you may ask, do these have to do with investing in real estate? Only this: This line of business is hard work and there will be no instant windfall. If you aren’t investing for the long haul and committed to doing real work, don’t do it.
The world of real estate can be unpredictable, scary and really brutal if your decisions are bad. If you’re careful, do the homework, work hard, and don’t take too many risks, it can be so worth it. Until you’ve gained a financial cushion and have some experience under your belt, be sensible and cautious. It’s never too late to start. Research shows that 36.5 percent of Generation X has yet to buy their homes. And with so many Millenials renting, you could be a landlord. If you want to supplement your retirement pension, start now and plan to do it with real estate investing.