Young People Don’t Appreciate Real Estate Opportunities, But It’s Not Their Fault | Nexus Property Management® Franchise

17 April 2024

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REAL ESTATE AS A CAREER PATH: WHY ISN’T IT ON THE RADAR SOONER?

True or False: Americans who work in the real estate business are most often college educated women in their 50s? According to the National Association of Realtors (NAR), the typical realtor is a 56-year old white woman who attended college and owns a home. According to Zippia, of the over 186,000 real estate agents currently employed in the U.S., the average age is 49. These statistics, along with anecdotal observations that support them, naturally lead to a couple questions:

Why is real estate so attractive to those who have already experienced a career or may be nearing retirement? And why aren’t young people going into real estate? It certainly appears that the older, more experienced folks are noticing and pursuing something that kids are not learning about in American high schools, colleges, and universities.

A QUICK THOUGHT ON AMERICAN EDUCATION

It’s no secret that American education was built in the style of the industrial revolution to nurture industrial age skills that are no longer priorities for the American workforce. The continued training of young people to be cogs in the simple machines that no longer drive our economy is part of why American education is falling behind that of other industrial nations. Bells controlling the movement of employees, I mean students, is one obvious holdover from a past that is not especially relevant to the jobs of today and tomorrow. Kids lack engagement for lots of reasons, but one of them is certainly the inability to see themselves as players in their own futures. Higher levels of education need to help close that gap between where kids are today and when they’ll be able to see themselves as meaningful contributors to society. For some young people, they have the vision that drives them through eight years of medical school…but for far more, who may be equally qualified, they thirst for more immediate returns and opportunities.

WHY REAL ESTATE SHOULD BE SO ATTRACTIVE TO YOUNG AND OLD

Let’s start with the older Americans who, as we mentioned, are most likely to get involved with real estate. There are three main factors at work: one, most of these people have owned a home of their own and by this point in their lives, have seen and experienced the incredible benefits of accruing equity passively. Secondly, they’ve worked other jobs and can now more accurately weigh the opportunities that real estate offers compared to what they’ve done for a couple decades. And finally, older Americans are more likely to be thinking about the legacy they’re going to leave behind for their children and grandchildren. Regardless of which of these factors might be driving their decision, they’re right! But sadly, it’s only through hindsight that this path becomes crystal clear.

One of the benefits of youth is flexibility. Young people have less that they’ve committed to that will tie them down and will pull at their financial freedoms. Kids are expensive. You can’t prioritize your real estate portfolio at the expense of feeding and raising your children. This is very likely an added factor to why it’s older Americans who jump into real estate. But there’s no reason young people shouldn’t be making the same jump BEFORE their lives revolve around family. The story of a family home with a white picket fence and a two car garage with a dog running around your two and a half kids is nonsense for anyone finishing up high school or graduating from college. That story can be yours if you want it, but not right away. Your story should begin with real estate investment in a multi-family home where you’re not paying a mortgage because the other tenants pay it for you…and your story should continue with an appreciation (and depreciation!), a respect, and an understanding of how real estate works so you can start capitalizing while you’re still young.

Numerous Nexus clients have given us the all too common line, “guys, I wish I knew this stuff 30 years ago”. And in our opinion, there’s no reason they shouldn’t.

REAL ESTATE IN HIGH SCHOOL

In a more perfect world, students would be introduced to real estate in high school. While many of us can remember playing the “stock market game” in economics or a social studies class, teaching students about the opportunities in real estate is much more relevant (and far less risky in application) than trying their hand at day trading. Hearing a teacher say “maybe it’s a good time to buy IBM stock” is a waste of time when he could’ve been saying, “you should buy something like a rental property with passive income that you can rely on forever”.

Including real estate as part of finance or business survey courses would be a great first step for local school boards to take to help their young people become more real estate literate, a skill that will help their communities exponentially. With school choice and an emphasis on high school career and technical education to differentiate one town’s offering from another’s, real estate programs would be perfect for talented young people who are hungry for tangible success right out of the gate.

Part of what makes Nexus’ work as a property manager so rewarding is that we foster win-win-win relationships: Tenants are happy because we ensure they have a quality place to live; property owners are happy because they can rely on hassle-free long term tenancy, and we’re happy because our business model succeeds. In turn, this is great for the communities across the country that we service. Greater real estate know-how and more young people entering the field would undoubtedly help tenants, property owners, and the young people themselves.

REAL ESTATE AS A COLLEGE MAJOR

At last count, there are 57 colleges or universities that offer real estate as a major, but many of these are clustered in California, Florida, and Texas. There are others that offer a real estate specialization under business or finance, but in our opinion, that’s still not enough. Real estate is a financial pillar to every community and it’s historically the most attainable path toward generational wealth. But without more focus from higher education, real estate will continue to be mentor-driven, which means it’ll continue to come down to who you know, not what you know. Young people need direct engagement with real estate to master it and that is the mission of higher education. It’s an avenue that caters to diversity and can empower underrepresented populations and communities because real estate is everywhere.

Importantly, higher education has become more and more commercialized in recent years as schools no longer hide that they are businesses competing for tuition dollars and “catering to consumer demand”. Quality and comfort of life on campus has become as important or more important to students than the actual education they’re paying for. So the only way to see real estate programs increase, is for there to be more demand from students and/or communities…and the best way to create that demand is to increase the amount and quality of high school real estate exposure.

IN THE MEANTIME…LEARN FROM OTHER PROFESSIONALS

At Nexus Property Management®, we’re always here to answer your real estate investment and property management related questions. We manage over 1000 rental units and offer franchise opportunities from coast-to-coast. Contact our team 24/7/365.

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Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

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