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Gen Z Is Already Investing In Real Estate — How Can They Afford It? – GOBankingRates

Prostock-Studio / iStock.com …….

Prostock-Studio / iStock.com

There’s no shortage of TV shows that make it look like anyone can get rich through real estate investing — but in real life, the barriers to entry are high and wealth does not come easy. Those barriers include income, credit and savings requirements that are typically well out of reach of 18- to 25-year-olds.

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But a new study from GOBankingRates that surveyed more than 1,000 American adults found that nearly one in four Gen Zers — 24.1% — report being real estate investors. GOBankingRates spoke with experts from across the industry to understand how, exactly, so many young upstarts could be dabbling in something that’s almost universally reserved for more mature investors.

This is what they said.

By ‘Investing,’ They Might Mean ‘Planning To Invest’

Several experts said that the study’s results can only be interpreted to mean that Gen Z considers purchasing a first home as a primary residence to be an investment in real estate, which, essentially, it is.

But since even basic homeownership is out of reach for so many young adults, one expert deduced that Gen Zers might consider the simple act of socking money away for a future down payment to be a roundabout investment in real estate. 

“One behavior that I suspect may be included in these responses is the process of saving up for and purchasing a residential property,” said Melanie Hanson, editor in chief of EDI Refinance. “Gen Z is especially tuned into the idea that renting is ultimately a waste of money when compared to being able to build equity in your own property, meaning that many of them who can’t actually afford a home yet may be building their savings for a down payment and legitimately see this practice as a form of investing.”

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High-Earning Gen Zers Can Work in Low-Cost Areas

Most members of every generation that came before, including millennials, had to buy homes that were within commuting distance of their jobs. That, in most cases, pinned people down to living in areas where the income levels mostly matched the cost of living.

Gen Z, on the other hand, is coming of age in a time where it’s possible to live in an inexpensive rural area while earning a big-city wage — a huge benefit that could accelerate the property-buying timeline.

“Gen Z is more likely to relocate to more affordable cities …….

Source: https://www.gobankingrates.com/investing/real-estate/gen-z-is-already-investing-in-real-estate-how-can-they-afford-it/

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