Experienced in the Management of San Diego & Chula Vista Properties
Author: Mark Di Tommaso, Experienced in the Management of San Diego & Chula Vista Properties
As we all know, all types of construction took a big and long hit during the recent Great Recession. The resulting relative lack of supply alone would be a good thing for sustaining rent levels.
The question that begs to be answered is whether there will be sufficient demand in the foreseeable future for the long existing and more recent and soon to be built rental housing supply? Our hope lies in the “millennials”. Young people generally described as being between the age of 18 and 34.
In the words of countless parents nationwide “the kids are finally moving out”. These “kids” will soon be, if they are not already: 40% of the housing market and 90% of the renters.
Understanding those pesky kids and predicting their future behavior will be an important part of maximizing return on rental property investment. I confess that we recently had a couple of young men in that age group working in our office, and I felt a lot like the grey haired old man telling those damn kids to “get off my lawn”.
Hopefully I’ll never become so old that I can’t do some research and learn some new things. Especially when we’re talking about a group that will soon be 40% of the housing market and by at least one estimate – 90% of the rental market.
As people we all have a world view (largely defined before our age of maturity) and logic dictates that those perceptions shape our current and future behavior. I had never thought much about it, but the events that shaped the world view of these young people include two recessions, truly massive unemployment in their age group, widespread crushing student loan debt and a housing value crash.
Little wonder the young lack faith in the competence and long term staying power of the system. And how much more understandable it is that they (as a group) are prone to immediate gratification (“eat, drink and be merry for tomorrow we may all…”) and are not sold on the idea of owning a house as the foundation of their long term security.
Misguided as I believe that conclusion is, the lack of owned housing as a goal has profound implications for all of us. Not only can that group be expected to be renters when their careers are young and incomes relatively low – but their status as renters is likely to be extended beyond what would have been the case in past generations (they may learn better, but it generally takes time and bitter experience for people to learn).
Bottom line, millennials promise to enhance the rental market and by extension rents, 5-10 years from now – as they to the same extent, threaten to take some of the wind out of the owner occupied housing market
As you know Golden State Property Management offers agents a Generous Referral Program for providing new Management Clients. 3 Months of Management Fees, 10% of our Fee Revenue for the life of the contract or a Fee iPad.
Equally important, we respect your relationship with the property owner. When the time comes for the owner to sell – we will do everything in our power to see to it that the listing belongs to You.
