Millennials make up the largest segment of renters and it isn’t just because they are the largest generation alive. It’s also because they are renting longer. There is no doubt that millennials are greatly impacting the current housing market. According to Zillow, the median age of today’s renter is 32 and the average income is less than $50,000. With high debt from student loans, it has become even more difficult for this generation to save for a down payment on their own home.
How Do Millennial Housing Choices Affect My Investment Choices?
As an investor, a 1031 exchange may help you tap into the potential of this housing market trend. Multi-family property, a property type available within the Delaware Statutory Trust (DST) ownership structure, is residential housing with multiple separate housing units, such as an apartment complex. Because millennials make up the largest segment of renters, they are prime, long-term candidates to rent within an apartment complex.
Investing in multi-family real estate that is structured as a DST and targets millennial renters may provide a number of potential benefits, including:
- A flexible investment amount. Choose the proportion of ownership that makes sense for your unique situation.
- A simple investment and ownership process.
- Potential for recurring, long-term income without management responsibility or landlord duties.
Read more about the advantages and disadvantages of a DST 1031 exchange.
Other Property Investment Factors to Consider
As you evaluate your 1031 exchange property options, keep in mind that multi-family properties are typically identified by “class.” Class A is the highest, and where you would expect to find high-end features and comforts.
It’s important to consider the amenities renters would like to see in their buildings and properties. In many ways, amenities may impact decisions beyond price, such as occupancy rate, length of lease, and more.
Amenities that may potentially make a difference to residents include:
- Fitness rooms
- Pet-friendly/dog runs
- Communal workspaces
- Game room
- Outdoor space
- Proximity to shopping
Explore Your Investment Property Options
There are a number of 1031 exchange replacement properties on the market. To see what is currently available, request our consolidated property availability report. We can help you evaluate your options and implement the strategies and investments that make the most sense for you.
