Why Millennials are investing in a house and lot amidst the pandemic?

It’s so interesting how millennials are shifting from being the YOLO generation to a generation that is wiser on their financial goals. The way millennials are actually spending and investing during the COVID-19 pandemic is vastly different than the way they managed their money in 2019.

Because of the devastating impact of the pandemic on the economy, millennials were inspired to achieve financial security and build wealth. The world’s largest and most diverse generation discovers how to create and maintain a healthy budget during the COVID-19 pandemic.

Amidst the pandemic, majority of them have recently shifted their attention towards securing their financial futures. Most of them are limiting expenses, optimizing their savings, and expanding their investment portfolios.

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Millennials no longer want cheddar, they want sustainable wealth. Their spending and investing attitudes today: goodbye avocado toast, hello annuities.

 Nowadays, most millennials are investing in real estate; far from the tech savvy generation that tends to shell out thousands of hard-earned money to gadgets which satisfy them for a short while and will not last for a lifetime due to wear and tear.

 With the rise of affordable house and lot due to the pandemic and economic downturn and the slashing of interests rates on monthly mortgage payments, millennials saw a great opportunity in this kind of investment. 

Here are a few reasons why millennials are now investing in real estate.


Additional income.

Amidst the current pandemic and economic recession the world is facing, most people need side hustles to fill the void in their earnings or make ends meet. When you buy a house and lot, you do not only spend money. It is an investment that can serve as an additional income for future investments. As a millennial who is glued on the web most of the times, you can use the power of the internet to create posts online for home rentals.

 Investment for the future

The demand for a more of affordable house and lot nowadays are high, and the market is selling their previous inventory at a lower cost because of the competition. Even if the real estate market returns to its previous state of stability, house and lot prices have nowhere to go but up which means the value of the property you buy today, will only increase over time, and you can attain a sizeable profit from this investment. If you have enough resources, now is the right time to invest. Here’s a free online mortgage calculator to guide you in budgeting and searching for the best deals on interest rates and mortgage payments.

 Inheritance for the future generation

An affordable house and lot lasts in your lifetime. It can be inherited and passed on to your children and grandchildren and the generations after them. Inheritance is not only about the physical space your family gets, but also the memories and stories the home holds.

Own private space

Privacy is something that millennials desperately need. By being a homeowner, you have a space exclusively for you and your family. You have a private space wherein you can enjoy doing whatever you want without worrying about other people’s judgment.

Sense of fulfillment

Millennials are a generation who always seek for something that will provide them with personal fulfillment. The reason they splurge on shopping for gadgets, leisure, travel, vacation, fashion and more is for the satisfaction they can get . They love to reward themselves with something after a hard day’s work or for a job well done. But nowadays, they realize that buying a house and lot can give them the fulfillment they have always needed. There is no greater sense of fulfillment than walking through your own home, having your own place for centering – a home that you got as a result of hard work and persistence.

5 Basic Real Estate Investment Strategies

Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. Real estate is an asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment.

Investing in a property has high returns but is considered a high risk investment. Educating yourself about the process will determine your success. Real estate values rise and decline, and can only work to your advantage if you can make wise investments. 

Taking time to study and evaluate will lead to finding the right property to invest. The best way to  identify the suitability of a property is thru Comparative Market Analysis (CMA). Comparing from sold data  plus the general market movement will  determine the current market value of the property and its profit potential.

Real Estate and Private Equity investor like David Ebrahimzadeh have the vision to find a property and expertise to maximize its potential thru investment analysis that leads to financial success.

Education is always the key in building knowledge and expertise in any field. Having the necessary diligence will help you get pass through those \’portfolio of uncertainties\’.

\”Real Estate remains one of the most exciting investments out there.

You just need to know where to look, be prepared to do some extra work, and take into account changing needs. The need for great spaces and great locations is ever present, but ever changing.\”

If you want to get started, Here\’s the list of Real Estate Investment Strategies to consider:

1. Buy to Rent – Single Tenant Properties

Single rentals are a good investment because they’re very simple to understand, easy to set up, and, generally, straightforward to run. However, they’re unlikely to deliver very impressive rental yields, certainly not market-beating returns.

2. Flipping Houses

In very simple terms it means buying it and quickly selling it for a profit.

You may do some minor cosmetic work to the property to achieve profit. But, generally, this strategy relies more on a rising market (or buying at a great discount) as opposed to adding any real value. The idea is to get in and get out as quickly as possible, so you don’t want to be doing any expensive, time-consuming development work on the property.

3. Become a real estate agent, rental agent, or property manager

This is the best way to learn the industry where you can develop contacts, earn income, and build a successful business for yourself.

4. Invest in real estate investment trusts

Real estate investment Trusts are investment products where property is the underlying asset. A REIT is a company or trust that owns and operates properties, such as office blocks, apartment blocks, retail properties, and other kinds of buildings that people or businesses rent.

REITs can be private or public, with public REITs being traded on the major stock exchanges, just like regular shares. 

5. Commercial property

The success of commercial real estate investments hinges on having good, stable business tenants in place. Without a tenant, it’s just an empty building costing you money.

If you can find a good tenant, that gives you some stability and potentially lowers your risk. The longer the lease, the more value this adds to the property.

Overall, these are some of good long term investments to add up for cash flow diversification. The goal  to have other stream to rely on to create financial security with this type of investment is always a big opportunity.

Fix & Flip Real Estate Investing vs. Wholesaling?

For those unfamiliar with Real Estate strategies, Flipping and Wholesaling have been mistaken as the same thing. But what exactly is the difference between the two?


What is Fix & Flip Real Estate Investing?

→ This is the strategy of buying a house, renovating it and selling it to a valuable gain.

The following are the Pro tips in Flipping the house for maximum profit:

  • Don\’t buy house with damaged mechanicals.
  • Inspect the Property Before Making an Offer.
  • Map Out Your Profit Margin Carefully.
  • Plan for Different Potential Exit Strategies.
  • Know Who Your End User is.
  • Select Properties That Can Be Updated Quickly.
  • Reach Out to a Reputable Hard Money Lender.
  • Understand Risk Factors & Come Up With a Plan.
  • Know the Estimated Cost of Your Flip.
  • Build a Good Rehab Team.
  • Price Your Home Correctly
  • Know Which Improvements to Make.
  • Don’t Try to Do Something Too Big.
  • Don’t Make Unnecessary Improvements.
  • Partner With the Seller.
  • Choose the Right Market.
  • Determine How Much Cash You Will Need.
  • Take Care of All the Big Ticket Items & Do the Work Correctly.
  • Update Bathroom Vanities.
  • Add a Few High-end Features to Your Property.
  • Buy the Worst House in the Best Neighborhood You Can Afford.
  • Update the Walls, Ceilings & Floors.
  • Plan Your Renovation Carefully.
  • Study the Local Market.
  • Take the Necessary Real Estate Courses.
  • Do Your Due Diligence When Purchasing a Distressed Property.
  • Leave room for unexpected costs.
  • Work With a Real Estate Agent Who Knows the Local Market.

With all the Pro tips listed above, one must also take advantage using an online platform like Connected Investors review that connects real estate investors to private funding, off-market deals, and other serious real estate investors. By using a Real Estate App, it makes it easier to gain knowledge and network all throughout the Real Estate Community.

Wholesaling?

→ Is when the house is put under contract and sold-as is to an investor.

  • In real estate wholesaling, a wholesaler contracts a home with a seller, then finds an interested party to buy it.
  • The wholesaler contracts the home with a buyer at a higher price than with the seller, and keeps the difference as profit.
  • Real estate wholesalers generally find and contract distressed properties.
  • Unlike flipping, a real estate wholesaler doesn\’t do any renovations or additions, and carry no costs.

Looking from each simpler definition, Fix and Flip investing needs a large sum of investment to start of. If you don’t have money to buy the property, pay for utilities, insurance, Attorneys fees, taxes, closing costs, etc… then consider wholesaling.

Although some experienced more success in Flipping, it\’s just a matter of finding a good deal that determines what\’s the best strategy to take.

Personal Thoughts:

I consider Wholesaling less stressful as it was a direct agreement between the  seller and the buyer. It can be more manageable and profitable after all as one doesn\’t have to actually invest. Wholesaling deemed as more beneficial especially when you hit a foreclosed properties wherein sellers can agree to sell below market value rather than affect their financial dynamics like the burden of taxes, mortgage, insurance and upkeep.