Are We Becoming a Rental Nation?

We are becoming a rental nation. That’s today’s episode,
and let’s dive into it. Hey, everyone. When you are done
with today’s episode, you’re going to learn why
more and more people are renting than ever before. And that’s good news for you
as a rental property investor. Hey, everyone. I’m Clayton Morris, longtime
real estate investor. Thank you so much for
subscribing to the channel. We try to help you build
financial intelligence on this channel. Back in 2017 I left
my day job and said, I am all in on real
estate investing. I had been buying properties
for many, many years. They produced a number
of cash flow for me every month that allowed me to
pay all of my monthly expenses. So we help you do
the exact same thing. We help you build
financial freedom. That’s the whole goal. So today’s show, we’re going to
talk about a nation of renters. There’s been a number of
articles published recently talking about the shift
in the home market. And we are sitting right now–
here’s some data for you. We are sitting right
now on home ownership being at a 50-year low. 50-year low. That’s remarkable. When you think about the
availability of properties. When you think about
the availability of new construction. When you think about the
availability of different loan programs over the
last 10 years– of course, which got us
into a lot of trouble during the crash. But 50-year low right
now in home ownership. More and more
millennials just saying, I don’t want to buy a property. I want to move around. I don’t want to be locked down. I want to rent. So again, when we see
stories like this, they’re always couched, if
you read Forbes magazine, or you watch CNBC or something,
they’ll kind of almost put it out there as
if this is scary. That, oh, my god, are we
becoming a nation of renters? And that’s terrible, right? Wrong. You know my philosophy. First of all, on owning
the home you live in, I believe is a
terrible investment. In fact, it’s not an
asset, it’s a liability. So this idea that people are
actually not putting money, a huge payment on a
property that they’re going to live in which will
not produce cash flow for them, and instead they’re
renting, and they’re maybe buying other assets
that are producing passive income for them. I see this as a good thing. Absolutely, a good thing. I also see it as a good thing,
because me, as a landlord, and I own many, many
properties, this is good news because rents are now going up. In a lot of areas where
I’ve had tenant turnovers, I’m able to go in, do
paint, carpet clean-up, put in new cabinets, et cetera,
and get tenant turnover, and increase my rent. So rents are going up. The demand for these houses
and these areas where I invest is through the roof right now. Tenants are demanding to
live in the neighborhoods where I own rental property. So as a landlord, as a
passive income generator, this is fantastic news. The demand for rental
housing right now is off the charts and exploding. And so, the areas where
I like to invest– in the Midwest, up in Michigan,
and Indiana, and Pennsylvania, and Texas, and other
places like that where I have a house
available for rent after it’s been renovated and
it’s sitting there or tenant turnover, you know, cleaned
up and painted and so forth. That’s to me is renovated,
once I’ve got it cleaned up and ready to go again. They’re renting up with my
property management teams very, very quickly. So a house should not be sitting
on the market for more than a month before a tenant
moves into that property. And so if you’re in areas
where you’ve got good jobs, you’ve got decent
school districts, you’ve got public
transportation, and new shopping is starting
to emerge in those areas, then you are sitting
pretty right now. So what happens during
an economic collapse, people always want to know? What happens during some
sort of housing bubble? Well, again remember, that
housing bubbles are regional. There is no nationwide
housing bubble. And if people can’t afford
to buy a house or if interest rates continue to
go up as they are– we should probably see another
two rate increases this year alone– makes it even more difficult
for someone to buy a house. So what do they have to do? They have to live somewhere. And therefore, they
should rent from you. Again, if it’s more difficult
to get a loan because that rate increase keeps them out of,
that prices them out of it, that really only affects
first-time homebuyers. Most people that are
buying their third home, they’ve got enough money
saved up for a down payment, that little bit
of a rate increase is not going to keep them
from buying that home. This really is a question
of first-time homebuyers. Rate increases affect first-time
homebuyers more than anybody. When these rates go up, that’s
good news for us as landlords, because now we can buy
these properties where these folks will want to live. They’ve got a decent
job, they work hard, they need a place to live. They’re not going to
live on the street, and they’re not going to buy
the place, so they need to rent. This is all good news. This is all good news. Now you say, well,
what about a refinance? Now these rates are
going up, what about if I have to
refinance this house? That’s going to hurt me. Well, “hurt you”
is a relative term. I mean, in the early 1980s
interest rates were at 18%. If you’re still able
to refinance a property with the leverage of a bank
or someone else’s money, that’s not your money. So frankly, a little
bit of a rate increase is not the end of the world. In fact, you’re still
buying that property with someone else’s money. You’re getting a
check from the bank, you’re getting it
from a private lender, and you’re able to go in
and invest in that money, in that property. So a couple of points here. Home sales are
slagging right now. New construction is
in the luxury market. It’s going through the roof. Rate increases are going up. Few and fewer people
are saying, I just don’t want to own a home. I get out of college, I don’t
have a desire to own a home. I want to travel. I want to move around. The millennial generation, I
don’t want to be tied down. So they need to rent. You should own the place
that they want to rent. And there’s three
types of tenants. I’ve done a whole video on
the different types of tenants in a rental property. You’ve got to check it out. It’ll walk you through my
favorite type of tenant that can rent from me. That’s the person
I try to target with my rental properties. It’s a natural fit. So check out that video. Also, please download
our Freedom cheat sheet. It’s the three-page
PDF that’ll walk you through how to figure
out what number of houses you need in order to
achieve financial freedom. It’s the thing that
changed my life, and I hope it will change
it for you as well. So until next time. Who cares if we’re a
renter nation right now. That’s good news for you. So go out there, take action,
become a real estate investor. I believe it’s the number
one way to build wealth. We’ll see you next
time, everyone.

20 thoughts on “Are We Becoming a Rental Nation?

  • Clayton..I bought my 1st house with your advice( – 40% )with a minimum of 10% R.O.I….Im currently living in it now..How should I go about buying my 2nd house?..I heard I cant rent this house for a year and 1 day for tax reasons.

  • Very clever topic! Sounds alarming right? But this truely addresses the bearded, coffee house, snapchat hipsters I see on bird scooters. With airbnb, uber, taskrabbit- millenials have loads of smartphone apps to download a life on the flex-tip. This video make me feel whippin about aggressively expanding my portfolio with C class properties. Hipsters love gritty neighborhoods with dive bars and ability to start up vape and vinyl shops in em.

  • Real estate investors, a scourge of the earth, there is a special place in hell for you… trying to enslave all poor renters. In a productive society housing serves a utility and is not an inflating bubble-asset that breakes the back of the middle class… you are ruining the economy! Run far if the economy downturns, once people find out what you did you will get the French Revolution treatment Marie Antoinette style. The Yellow Jackets will be coming for you pitchforks in hand.

  • I live In LA bought a house in 2010 during the crash for 900k and now its out of my price range.. Buying a rental property appt complex in this area is very difficult to make any money from the rents.. Buying a 4plex in a good middle class area in LA will be about 1.3 million.. downpayment on that property would be 25 to 30%.. I had to go to NM to buy a 4plex for 400k and make money, because in LA its tough business..

  • What's interesting to me regarding your many videos and topics – I am able to understand certain nuances and meanings simply because I have read Rich Dad Poor Dad also and can make the correlation with what you are trying to convey.

    It's awesome.

    Thanks for the information, Clayton.

  • Clayton , i own a duplex with my cousin , its paid off but my partner refuses to do a Heloc on the property or a cash out refi , so i may ask him to buy me out so i can invest in your turn key homes try to purchase 8 homes , 40k ?

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