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Rental Demand Surges – Thank Demographics

11220929004_e504dcf17dThe Baby Boom generation, that long-lauded workhorse of American demographics, has finally capitulated, at least according to a recent New York Times story. For the past six decades we’ve been able to rely on the fact that the most represented age in the country would belong to the Boomers, but the Times story says that a new age reigns at the top of the heap. The 23-year-old!

Besides the sheer novelty of the idea, why should income property investors care? In a single word – renters. There are three factors that make Gen Y much more likely to rent than buy.

1. Marrying Late – For a washtub full of reasons, young adults are getting married and starting families later than in previous generations. Which means they are postponing big financial moves like buying a house. As the number of renters in the United States continues to climb, there’s no reason to believe it will stop any time soon.

2. Student Debt – The cost of a college education has been spiraling ever upward for a while now. Students are usually left with no other payment option than to take out more loans. It used to be that only a medical or law student would graduate with indebtedness that crossed into six figures but that’s no longer the case. A staggering number of college graduates can expect to enter the workforce with a monthly loan payment that resembles a house payment. The only problem – no house. Luckily for you landlords out there, this will keep them as renters for a while. Maybe forever.

3. The Job Market Joke – Remember the good old days when college graduates had jobs waiting for them after graduation? That’s no longer the case. With the Obama administration establishing a new normal for unemployment that approaches 10 percent, there’s no way these poor saps with diplomas are going to be able to afford a house down payment in this decade. Guess what this makes them? Renters.

While all these factors make for a major downer if you’re a 23-year-old recent college graduate, income property investors who follow the advice of America’s asset coach, Jason Hartman, should be logging superlative annual ROI for the foreseeable future. (Image: Flickr | reynermedia)

* Read more from Heroic Investing
Worried About Retirement? Investing Can Help
Can Obsolete Houses Drag Down the Market?

Derek and the Heroic Investing Team
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