Millennials find a new path to home ownership
Millennials who are having a tough time coming up with the money to purchase a house are turning to another method of homeownership: buying investment properties elsewhere.
Founder of DeBianchi Real Estate in Miami Samantha DeBianchi told FOX Business' David Asman on “Varney & Co.” that she is among those doing just that. She rents her primary residence, but owns elsewhere.
"People, especially millennials, want to own real estate."
“So what they’re doing [is] they’re looking at other markets — emerging markets — and they’re buying properties for $150,000 and that are maybe kicking back a couple hundred dollars a month on rents, DeBianchi said. "And they’re collecting more and more of these, and they’re paying for their rent, plus some," DeBianchi said.
An example of a business taking advantage of this method is the website Roofstock, which helps people to buy and sell investment properties in those midsize, emerging markets throughout the U.S.
“It’s all about passive income, that extra cash flow, having that,” DeBianchi said. “Plus, there are a lot of tax benefits as well.”
But Jerry Howard, the CEO of the National Association of Homebuilders, doesn’t believe the rent-here-buy-someplace-else approach is the answer for most people.
“I think this is an interesting niche, one that can help kids save for the ultimate down payment for the house they want,” Howard said.
"But in the end, the American dream is to own your own home."
Howard, whose association recently released a survey that found 80 percent of Americans believe the lack of affordable housing is a crisis, feels millennials are no different from anyone else when it comes to that.
“Most Americans, when we talk to them -- and we pull kids out of college every year -- when they start a family, they want to have a single-family house with a backyard in a good school district that they can own," Howard said.
DeBianchi doesn’t disagree, but she argued that for millennials short on cash, it’s not necessarily a bad thing to wait.
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"People want to buy these homes,” DeBianchi said. “But if they can’t, renting is a great option and an option that people shouldn’t downplay.”