Looking for strong demographic and economic growth? Real Estate IRA owners will find it right here in the bright sunny South: Currently about 42 percent of Americans live in the southern states. But according to research by John Burns Real Estate Consulting, cited in the most recent Pricewaterhouse Coopers Housing Trends in Canada and the U.S. report, the southern states will enjoy 62 percent of the overall household growth in the U.S. over the next decade. Researchers project that we will see especially strong and growing demand for affordable rental housing, townhome-type properties and small lot detached housing.
The same study projects a major surge in rental rates. Why? Demand for reasonably priced rentals is skyrocketing. More than 6 million new households created over the next decade will rent. Some will be transitioning from ownership back to renting as their nests empty and they look to simplify and downsize their lives. The national home ownership rate will probably fall by 2025, down as low as 60.8 percent. Rental properties will be taking up the slack. What does that mean for Real Estate IRA investors? Here are few thoughts:
- Get in front of snowbirds and halfbacks. More seniors in the northeast are looking to move to warmer climes to be near family, for health reasons, or just to get in some quality golf during their active years. These are normally great tenants – financially secure people who take care of your property.
- Shopping centers will transition from retail centers to experiences. Yes, we’ll still have lots of restaurants. But retail stores will feel the pinch from online sources like Amazon, which are even now disrupting even the grocery store industry with home delivery services.
- Watch for more emphasis on Surban developments. Today’s large shopping malls will decline as consumers move to developments that integrate housing and retail in a convenient package that doesn’t even require a car. Shopping malls and the REITs that have historically developed them will likely undergo a painful adjustment. Some malls will die a slow, painful death. We’ll see more communities that look to combine urban and suburban living.
- Again, according to John Burns, these communities will emphasize access to public transit, good schools, peace and quiet, ease of parking, proximity to employment, walkability and nearby entertainment options.
- Family-friendly rentals will be in demand. These more affordable rentals may have some more kid-friendly amenities. While Millennials are buying more houses now, a lot of them are still struggling to get established following a long recession and a poor job market and crushing student debt that combine to make it very difficult for them to qualify for a mortgage. This means more of them will be renting, or possibly looking for alternative sources of financing. That’s another potential lucrative investment option for your Real Estate IRA – private mortgage lending.
American IRA, LLC is America’s leading administrator for self-directed IRA and Real Estate IRA investors. Our offices are in Charlotte and Asheville, North Carolina, but we work with successful out-of-the-box thinkers in all 50 states who use self-direction to take more direct control their retirement assets.
To learn more, or to arrange a free, no-obligation consultation, call us at 866-7500-IRA(472) or visit our website at www.americanira.com.
We look forward to working with you.