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millennials single family rentals

Millennials Take Control of Their Investments with Single Family Rentals

April 11, 2016

The millennial generation is showing a propensity to deviate from more traditional investment strategies. Unpredictability in today’s equity markets, accompanied with the millennials (aged 18-34) desire for financial independence and control, has increased interest in alternative, income producing asset classes. One of the more popular investments is now real estate, specifically residential rental properties. In affordable markets, single family rentals boast low barriers to entry and numerous economic benefits to the young investor.

27 year old Travis Killian was recently interviewed in a New York Times article titled, “Millennials Investing in Rental Properties.” “I’m interested in real estate investments because of all the ways you can make money – from appreciation, leverage, cash flow, tax benefits.” Killian said. This statement outlines why so many millennials see the appeal of a single family rental investment. Purchasing a residential asset in affordable markets can typically require very little down payment for a high yielding property. The young investor who is perhaps more adverse to long term appreciation can reap the rewards of the appreciation lifecycle while receiving enough cash flow to cover the mortgage payment and then some.

Millennials see the benefit of an investment that not only has the potential to produce meaningful appreciation in a 5-10 year life span, but also passively, cash flow. The young investor can then realize the gains in equity and appreciation. According to the New York Times article this strategy, “can be a form of forced savings.” In the event the home is sold, the equity and appreciation can then be used for the down payment of more cash flowing investments or perhaps a personal residence.

Young investors appreciate an asset you can see and touch. SFR’s allow for a hands on approach to passive income investing. The residential rental market is an increasingly attractive cash flow and appreciation play and the millennial investor has taken notice. For a complimentary evaluation, feel free to contact Ian Hardcastle, Originations Analyst- Colony American Finance, at (310)752- 5030 or visit us at http://www.colonyamericanfinance.com/borrowers and follow us on LinkedIn  .

This is a guest post from Colony American Finance, a leading provider of financing solutions to residential real estate investors.  If you are an investor in the market looking to acquire rental properties, we provide attractive long-term debt products for stabilized rental portfolios, as well -as credit lines for new acquisitions. For more information about how Colony American Finance can help grow your rental and rehab business, please call 844-331-7355 or email info@colonyamericanfinance.com.

Photo Credit: Fotolia 

  • Eric Eckardt

    Another viable real estate investment alternative is shared equity, allowing investors to purchase an ownership interest in owner-occupied residential homes that are in markets with strong fundamentals. At the same time, shared equity preserves homeownership and reduces debt, with the potential to deleverage the U.S. housing finance system. http://www.dwellxchange.com