Epic Real Estate Investing - Housing Market RESET? The Shift Towards a Nation of Renters Explained | 1396

Episode Date: December 12, 2024

Welcome to this week’s episode, where we dive deep into one of the most significant changes happening in the U.S. housing market today: homeownership is quickly becoming a luxury, and renting is rising to take its place as the new American Dream. In this episode, we unpack the complex forces driving this massive shift, from skyrocketing property prices to the mounting financial pressures faced by younger generations. We’ll explore how today’s young adults are navigating the high cost of living, student debt, and limited income, all of which are pushing homeownership further out of reach for millions. But it’s not all doom and gloom. Renting is becoming a new way of life—especially as luxury rentals and purpose-built rental communities are growing in popularity. In fact, investment in rental properties is booming, with major players pouring billions into the rental market, making it a hot spot for savvy investors. How can private investors seize on this trend? What does the rise of the renter class mean for the future of real estate, wealth-building, and the economy as a whole? The host shares exclusive insights on how to adjust your investment strategies to ride the wave of this massive shift. Join us for a fascinating discussion about the future of housing, the transformation of the American Dream, and how to position yourself for success in a market that’s evolving faster than ever before. Don’t miss it! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we navigate the housing market, the landscape of creative financing strategies, and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-aise.com. Let's go, let's go, let's go, let's go, let's go, let's go.

Let's go. What if I told you that housing today is as affordable as it's ever going to be? What if owning a home soon became a luxury reserved for the few? And renting is now the new American dream. In 2025, major corporations are opting to invest heavily into rental properties. Build to rent neighborhoods. That's what they're calling them. And by the end of this, the way you think about real estate could change forever,

not to mention how you can or, if you will, profit from it. You will own nothing and be happy. This is a phrase from a 2016 article published by the World Economic Forum, the WEF, in which Danish Social Democrat, Ida Aachen, outlines her vision for your future. Now, it's morphed into a conspiracy that the elite class is out to restrict your rights to private property. Or is it a conspiracy? I mean, imagine living in a home with all the bells and whistles, state-of-the-art appliances, smart home technology,

a roof top pool, but you don't own any of it. Sound unusual? Not anymore. In cities like Irvine, California, a staggering 73.6% of single-family rentals are now considered luxury properties. Luxury rentals are booming, and it's not just the average person who's interested. Big names in the investment world are pouring billions into this market. But why is this happening? What's driving people and investors to choose renting over and buying?

Let's face it, for many young adults today, buying a home feels like climbing Mount Everest without oxygen. Nearly 60% of young adults are rent-burdened, spending more than 30% of their income on housing. Remember when owning a home was the cornerstone of the American dream? Well, now, it's more like a distant fantasy for many. It's like running on a treadmill that continues to accelerate regardless of your fatigue level. I mean, no matter how hard you try or how long you stay on, the treadmill will outlast. you. But here's where it gets interesting. According to a recent study by bank rates, renting is now cheaper than buying in all 50 major U.S. metros. The typical monthly mortgage

for a median priced home is $2,703, while the national typical monthly rent is $1,979. Now, in 21 U.S. metros owning is at least 50% more expensive than renting. So is it any wonder that people are choosing to rent? I mean, even in cities like New York, San Francisco, in Los Angeles, where owning a home is akin to owning a piece of gold, renting has become the more viable option. In the second quarter of 2024, the U.S. homeownership rate remained at 65.6 percent, the lowest in two years. For those under 35, it's even more dramatic, a drop to 37.4 percent, the lowest level in four years. The 35 to 44 age group isn't very much better with a 0.9 percentage point decrease in homeownership rates. An entire generation is being priced out

of homeownership. The dream of a white picket fence is fading. But what does this mean for the future? The shift towards renting isn't just a trend. It's a seismic change that could we define wealth accumulation in America. With fewer people building equities through homeownership, the traditional pathway to wealth, it's being blocked. This could widen the wealth gap and change the socioeconomic landscape of our country forever. And here's the deal. While the masses are turning to renting, savvy private investors are seizing this opportunity. The very shift that's making it harder for individuals to buy homes is creating a gold mine for investors. And you can hem and hae about how unfair this is, and I wouldn't disagree with you, but the train has just about left the station

completely. So you're faced with a decision. You can sit on the platform and complain, or you can hop aboard one of the passing cars. The rise of a renter nation presents a golden opportunity for private investors to buy properties now and just hold on to them. As demand for rentals increases, so do rental incomes and property values. It's basic economics, high demand and low supply drive prices up. Think of it like getting in on Amazon stock in 2000. What was once a luxury is now a life necessity and it's priced accordingly. The market is shifting in a way it never has before. and 10 years from now, there will be two kinds of people, those who talked about this shift and those who invested in it.

There are several factors that are fueling this trend. Student loan debt is at an all-time high, averaging over $30,000 per borrower. Wages, they're not keeping pace with rising living costs. Plus, lifestyle preferences are changing. I mean, many people value flexibility over the permanence of owning a home. The gig economy, remote work, and a desire for mobility make renting more of. appealing. It's like choosing to lease a car because you can upgrade every few years rather than committing to one vehicle for a decade. Major investment firms they're catching on. Companies like

Blackstone are investing heavily in single-family rentals. And speaking of Amazon again, Jeff Bezos is getting in on the action with his new single-family hedge fund. They're buying up properties in mass, converting them into rentals and reaping the rewards. The writing is on the wall, and they see it. Do you? But Matt, the market, it's going to crash. I know. I see it in the comments every day. I know what you're thinking. But here's the thing. The smart money disagrees with you. Listen, if you're happy with where you are financially, then keep doing what you're doing. Don't listen to me. But if you could afford to do better than you are financially, does it make more sense to take a page from the smart money playbook or your favorite personal finance guru on TikTok? As they say, a rising tide lifts all boats. And as a private investor, rent a properties are the boats and they're still accessible. For now, you need to get some, at least one. You see, with the right strategy, you can generate steady cash flow and benefit from property appreciation over time. You don't need to be a billionaire to get started. Cashroll savvy just

released the frustrated investors guide to passive income as a starting point. You can grab a copy at frustratedinvestor.com. It's free. Every great investor sees opportunity, whereas others see obstacles. As Mark Cuban has said, the best way to predict the future, is to invent it. Bruce Lee, not an investor, but he did say to hell what circumstances, I create opportunities. Now, I won't sugarcoat it. Investing in real estate comes with challenges. There's property management, there's financing hurdles, there's market risks, but with proper planning, education, and the right team, these hurdles can be easily overcome. There are property management companies that can handle the day-to-day operations. There are financing options

in addition to traditional banks, like partnerships, private lenders and seller financing and subject two and lease options, there's many. And unless there's a significant increase in housing supply, a massive influx of new homes being built, this trend is likely to continue. No, it's going to continue for certain. Cities may need to adapt to accommodate more renters, and that means more opportunities for investors. Urban planning will shift, and the rental market will become even more robust. Miss this wave and you might miss out on one of the greatest investment opportunities of our time that's available to the average person. The window, it's open now, but it won't stay open forever. So what can you do? Start by educating yourself about rental demand. Property managers,

creative financing. Subscribe to the channel. That's what we do here. And you might have a little thought in the back of your head. You know, Matt, what about new construction? Won't building more homes solve the problem and aren't they going to do that? Well, while increasing housing supply, it's definitely crucial. It's not happening. It's not happening fast enough. Builders face challenges like zoning laws, rising material costs, and labor shortages. You know, it's like trying to fill a leaking bucket. The efforts aren't matching the scale of the problem. Relying on new construction alone, it's not the answer. The opportunity lies in the existing housing stock and the growing demand for rentals. And let's not forget the cultural shift. People are delaying marriage and starting families later. They prioritize experiences

over possessions. Traveling the world, remote work, and the freedom to relocate are becoming more valuable than owning a home. This further fuels the demand for rentals. And you have an option. You can pay rent or you can collect it. The shift towards a nation of renters is real, and it's happening right now. While it presents challenges for those aspiring to own a home, it offers immense opportunities for private investors willing to seize the moment. The market is evolving, and so should your strategies. Don't sit on the sidelines. Dive in. Do your homework and take action. Fortune. It favors the bold. I'll see you next time. Take care.

And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you. I'm Matt Terrio. Living the dream.

Yeah, yeah, we got the cash flow You didn't know home boy, we got the cash flow This podcast is a part of the C-suite Radio Network For more top business podcasts, visit c-sweetradio.com