Friday, November 4, 2022 / by Laura Larson
Some young purchasers are purchasing a home so they may use it as a rental rather than buying one and moving into it themselves. This strategy may be becoming more popular, at least in part, as a result of the difficulties with affordability brought on by today's increased mortgage rates. How many members of this group are contemplating this strategy is mentioned in the report above. It reads:“Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.”
Why Younger Buyers Are Purchasing a House to Rent Out
This method enables buyers to stay in their existing residences where they couldn't otherwise afford to buy, such as the busy metropolitan apartment complex or their beloved neighborhood. They decide to buy a house in a more inexpensive neighborhood with the purpose of renting it out rather than abandoning their dream of owning a home.
They are, in a sense, obtaining the best of both worlds. They still own a home where they can afford it and they live where they want.
Both passive income generation and asset diversification are priorities for them. The equity they build in their home will assist increase their net worth over time in addition to providing them with a rental income stream.