a HUGE SHIFT - Why Rental Investing Makes Sense RIGHT NOW... | Episode 123

The face of housing in America is changing, my friends… and it translates DIRECTLY into real opportunity for YOUR PORTFOLIO!  I’m Bryan Ellis.  I’ll tell you how RIGHT NOW in Episode #123.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy, self directed investors like you!

My friends, something is happening in America.  Frankly, I don’t think it’s a good thing for America, but as they say:  It is what it is.  And what it is, is:  A clear, undeniable shift from a nation of home owners to a nation of renters.

For various reasons, Americans are choosing to rent rather than to own.  We’ll talk about some of the reasons why in just a moment… and how that translates into opportunity for you.  But first, let’s look at the hard data.

Right now, the home ownership rate is at 63.4%.  So what, right?  Here’s why that matters:  It’s been nearly 50 years since the home ownership rate was this low… and it’s on a MASSIVE DECLINE.  That rate hit the highest it’s ever been in 2004… and in the 11 years since, the U.S. home ownership rate has absolutely PLUMMETTED.  It’s now a mere ½ percentage point from being at the lowest level EVER recorded.

And yet… the population of our country is at it’s highest ever, and more and more housing is being built every single day.  Household formation is RISING!

What gives?

The answer is simple:  A figurative TECTONIC shift in the attitudes of Americans about home ownership… and particularly that crew that gets so much attention, the “Millenials”.

The prevailing attitude today is NOT to put down roots into a community, but for transience to constantly be an option.  And it’s pretty rational, if you think about it:

First, you have the perceived risk in owning real estate… the perception is that risk is still rather high, with the carnage from the real estate crisis of a few years ago still fresh in the minds of adults, young and old.

But it’s not just that… there’s also the employment situation.  Let’s face it:  The job market is awful.  Don’t believe the 5%ish number that the Labor Department is reporting.  If you do, be sure to listen to Episode 117 of this show to see the harsh truth about that.  Today’s worker feels the need to uproot at the first offer of a job, rather than hope to find great employment close to home.

And finally – there’s a “mind shift” that’s happened.  Even though America’s population is bigger than it’s ever been, the “feeling” about America is that it’s smaller… meaning more accessible… than it’s ever been.  As a function of the internet generally and Facebook specifically, it’s easy to FEEL like you’re a member of communities far beyond your geographic locale… and it’s easier to be willing to pick and physically move, too.

But here’s the thing, my friends:  This bias AGAINST home ownership presents an opportunity for you, the savvy self-directed investor.  And that opportunity is simple:  Be the PROVIDER of that housing by owning rental property!

Now, folks, you can’t do this haphazardly.  You can’t buy just anywhere, nor will just any property do the trick.  You’ve got to understand the bigger trends and the market dynamics in play.

Well, let me correct myself there.  You CAN buy just anywhere.  And, as you learned back in Episode 119, randomly buying real estate in America is a nearly guaranteed way to LOSE money, even if ALL you do is factor in the cost of inflation, and no other expenses.

But folks, as you can see, if you can pick the RIGHT rental properties, there’s great opportunity because, the fundamental, prevailing attitude of the latest generation of American adults is coalescing around the idea that RENTAL HOUSING – even long-term rental – is a superior idea to ownership.

But there are 3 factors you MUST get right every single time in order to be predictably successful as a rental owner in today’s new environment:

Those factors are:  MARKET, VALUE and MANAGEMENT.

All 3 must be present.  The absence of any one of those legs makes for a stool that can’t stand up… and that can’t support your financial needs.

Look, I’m not going to belabor the point, so very quickly, here’s what I mean by “market, value and management”:

The market is the geographic location of your property.  Really, it’s about one thing:  How desirable is the location, both now, and for the foreseeable future.  Because my friends, frequently the biggest single benefit one will get out of being a landlord is the windfall of profit that comes at the end when the property is sold, and… nothing, absolutely nothing, is more of a determinant of future appreciation than the market in which the property is located.  The market is EVERYTHING.

Then there’s the value factor.  People, unless you have a crystal ball, don’t throw your capital to the wind by purchasing real estate at it’s retail price.  If some random Joe Blow would pay $X for the property on the open market, you need to pay BELOW $X.  You’re not buying real estate because you’re a collector, you’re buying it because you’re an investor.  And investors buy into GREAT VALUE… the best approach to which is to never, ever pay retail value for your properties.

And the final element is MANAGEMENT.  No, my friends, don’t even think about managing the property yourself.  Don’t think about it.  NOT a good idea.  Not only does that restrict you to your own local market, but do you want to reduce yourself to menial labor like collecting rents and calling repairmen and tracking down mortgage statements?  NO… you need a good manager to handle that for you.  But here’s the thing:  A GOOD property manager is HARD TO FIND.  Darn near impossible, even.  You’ve GOT to find this person as a result of serious research into available options.  Or… better yet… a first-hand referral.

Market.  Value.  Management.  All key.  All required.  All critical.

Want to know how to get all 3 of those things… even if you’re not “well connected” in the real estate business?

I can help you there, my friends.  As it turns out, I’ve got a book about this very topic coming out VERY SOON.  This one isn’t another book that just attempts to convince you that rental investing is a good idea.  It’s specifically for those of you who are ready, willing and financially able to buy great rental properties… but you need expert guidance on selecting property in the RIGHT MARKET, at the right VALUE, under the right MANAGEMENT.

This is the book for those of you who want to get it right the first time… or for those of you who may not have done it perfectly the first time, and who wants to correct course while you still can.

So… if that’s you… you’re ready, willing and able to start or expand your portfolio now, but you want to do it the RIGHT WAY… then I’ve got a free copy of this book for you… or, specifically, for the first 100 of you to respond.  (It’s not free to print these books, people!  Gimme a break… many thousands of you will hear this show, and I just can’t give away that many copies!)  Hehehehe

So to reserve your free copy, please text the word RENTALBOOK to 33444.  Again, that’s RENTALBOOK – no spaces, put the word RENTAL and the word BOOK together and text it to 33444.

But remember – this is only for those of you who are seriously interested in building your rental portfolio in the RIGHT MARKET… at the RIGHT VALUE… and under the RIGHT MANAGEMENT!

Folks, invest wisely today… and live well forever!

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