In today’s episode of the Stephen Cooley Real Estate Show, Stephen and Chris Salerno explain why millennials should invest in real estate. 90% of America’s wealth is tied up in the real estate so it must be a great investment.
Millennials make a 38% of all home buyers today and within 5 years they’ll be the #1 home buying group in America. Did you know that they shop differently?
Let’s discuss the details of investing in real estate:
STEPHEN: Hello. I’m Stephen Cooley and welcome to the Stephen Cooley Real Estate Show. I’m very excited to have back to the show Chris Salerno – welcome to the show. Chris is one of our top agents on the Stephen Cooley Real Estate Group, and you’re also millennial
CHRIS: I am.
STEPHEN: And I wanted to chat about millennials today because actually they make a 38% of all home buyers today. Within 5 years they’ll be the #1 home buying group in America. I can remember when it was the baby boomers and then it was generation X and actually the millennials are generation Y. Tell us their age group as far as being born.
CHRIS: Age group goes up for early 1980s on the way up to the 2000s.
STEPHEN: So they’re really 22 to 30-40 years old. They shop differently than their parents.
CHRIS: We do.
STEPHEN: And they communicate differently – tell us about that.
CHRIS: We communicate with text messaging is our #1 thing we hate to talk on the phone. Facebook, Instagram, Snapchat are big communication, and how we communicate with people and everything on the internet we shop on the internet look on the internet for homes and everything.
STEPHEN: And buy on the internet and really communicate through electronics and not socializing person to person.
STEPHEN: So in communicating with millennials, millennials know how to communicate with each other but if you’re not one like me learning to communicate with millennials meaning you learn to do all the technology bound things which is Snapchat and Instagram and Facebook messenger and just basic texting, and so they want their information instant and always. I want to talk about today millennials investing because people between 22 and 34 certainly are looking where to invest their money. And so you can certainly invest in stock market, you can invest in bonds, you can invest in real estate. 90% of America’s wealth is tied up in the real estate and so it must be a great investment if that’s where 90% of wealth is so let’s just take an example: A millennial has $3,500 to invest. They’re gonna invest that $3,500 in the stock market. You buy the stock with your $3,500 and you hang on to it. Let’s just say you take that $3500 and you wanna invest it in the real estate $3500 down payment in real estate buys you a $100,000 house with an FHA loan the bank owns you 96.5% of the purchase. No one’s gonna loan you money to buy stock. So you’re also paying rent if you’re buying the stock so if you buy up a home for a $100,000 and put your $3,500 downpayment in buying the home and you buy the stock with the $3,500 5 years later the appreciation on the stock, let just say it was 5%. It’s going up a few hundred dollars. The appreciation on the $3,500 you bought real estate with is based on the $100,000 which means it went up over $25,000 and you also quit paying rent. You started paying down your mortgage.
CHRIS: Sounds like a great investment.
STEPHEN: Absolutely a great investment. And then when you sell the stock after 5 years you pay income taxes only the profit off the stock. If you live in the residential home for 2 years or more all the gain is tax-free. So when you get that with $30,000 check you have no taxes on it.
CHRIS: That sounds good.
STEPHEN: Absolutely, so 3,500 in the stock market, 3,500 in real estate when you’re buying a $100,000 home and again your investor in buying the home which is a mortgage company, gets none of the profit and they invested 96.5% of the risk and they get none of the profit. So millennials are buying real estate evidently if they’re at 38% but as they realize it’s becoming a better investment, they’re also getting more and more into the market. You know, millennials are also looking for a different product than their parents look for.
CHRIS: They are.
STEPHEN: Their parents probably at 22 had two or three kids and they were looking for a four or five-bedroom home, schools mattered to the generation X folks, generation Y is very mobile.
CHRIS: Yeah, we want everything come and go, we don’t want to do yard work, we want to make sure we can open the door, sleep, then leave and just come and go easy.
STEPHEN: Absolutely, low maintenance, possibly having a roommate situations, possibly buying with someone they’re not married to and they want something that they can sell quickly because they’re very mobile.
CHRIS: We like to travel a lot.
STEPHEN: Absolutely, so we definitely gotta pay attention if they’re gonna be the #1 buyers in America in the next 5 years and how they communicate and how they shop and here at the Stephen Cooley Real Estate Group we are prepared for that because we have one of the best websites available StevenCooley.com.We also communicate through all those avenues of Social Media. Shockingly there are 12 avenues on social media and people using bears ones. And so we’re communicating with them at a very high level and then pulling a lot of millennials to do it like you so great information there Chris we got beautiful homes on today’s show. Tell folks how to reach you if they’re interested in seeing one of these properties or interested in selling their home.
CHRIS: Well, definitely you can reach me at Salerno.stephencooley.com or 803-982-8992
STEPHEN: And that email address is Salerno@stephencooley.com and my name is Stephen at stephencooley.com. So always reach out to us just like millennials reach out us – byt email or text thanks for watching today’s show. Thanks for that valuable information about millennials.
CHRIS: Thank you.
STEPHEN: We’ve got beautiful homes for sale in your area, please stay tuned. We’ll be right back.
I hope you’ve enjoyed watching the Stephen Cooley Real Estate Show. If you’re interested in advertising your business on the program, please give us a call at 803-326-2777. Join us next week for more discussions on real estate topics and help in finding your perfect home. Thanks for watching.