Rentvesting: A Possible Real Estate Investment Solution For Millennials

Joseph Jennings | Broker, ABR, PPM, CAM | Tag: Rentvesting
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Published: Sept 3, 2020 | Source Article | By Jaycee Tenn

Rentvesting: A Possible Real Estate Investment Solution For Millennials

It’s no secret that millennials aren’t buying homes at the same pace as previous generations. With the average undergraduate student loan debt at 29,200 (not including specialized or advanced degrees), the high cost of living in major cities, and tightened lending criteria, many millennials have prolonged buying their first home.

As we continue to see renting become more popular among the younger generation, the question of how these renters will be able to save up for their first home becomes an area of concern.

One way some millennials have been able to circumnavigate this issue is through a strategy called, rentvesting.

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Rentvesting

Through rentvesting, you start by renting a home for you to live in. For most rentvestors, this tends to be in a major city that’s close to your job, friends, social and nightlife. After you rent out a home, you then go and buy a rental property in an up-and-coming area that you can afford, but perhaps, do not care to live in. So through this strategy, you are able to afford to live in an area of your choosing while building equity with your rental property elsewhere. You can sell the rental property in 5-10 years and use that money and any saving accumulated over the years to purchase your first home, possibly your dream home.

Although, this method may not suit all investors as there are some factors to consider. In order to make this a smart investment in your future, you need to study location and appreciation to hopefully ensure that the property will most likely make money over the long haul. You also need to take into account the cost of renovating your rental property and if you are willing to or have the time to undergo this process.

There are also the issues that arise with being a landlord and making sure you have the time and money to make repairs on the home, visit the property, and find suitable tenants to live there.

Finding A Rental Property

If you feel that rentvesting may be a good investment solution for you, consider looking on online marketplaces for your investment property.

Rentvesting has been a trend among millennials for a few years and while it may not be the investment strategy for everyone, it is an investment strategy that may allow more millennials to purchase their first home.

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