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Demographic Trends Point to Real Estate Investment Opportunities

People standing in front of graph

  |  By Chris Shanahan, CISP®

Investing in real estate is a popular strategy with self-directed IRA holders. Many of our clients at PENSCO own single-family homes in their IRAs, which they rent to tenants. Investing in real estate allows investors to grow their retirement savings by collecting monthly rent checks and by benefiting from any potential home price appreciation.

Earlier this year, I provided 4 tips on the blog for self directed IRA investors who are considering buying an investment property, and I also blogged about top markets for investing in rental housing in 2015.

But a recent article in Bloomberg caught my eye. Using charts and maps, the story demonstrated how demographic trends will have an impact on the economy, and it looked at cities where people are migrating to and where millennials will settle down.

These could be interesting charts for investors who are considering buying an investment property. For instance, the article provided this chart projecting where millennials will eventually put down roots.

While big cities like New York might attract millennials early in their careers, Bloomberg said many will move to the Pacific Northwest or Denver in search of affordable housing. The article also predicted that high housing prices would prompt a migration out of California and into cities like Denver, Seattle and Portland, where the cost of living is more affordable.

In addition, the migration to the Sunbelt, which slowed during the recession, has resumed with people moving to Phoenix, Atlanta, Las Vegas and Florida.

For investors interested in holding real estate in a self-directed IRA it’s always recommended that you understand how market dynamics might shift over time and that you conduct ample due diligence before making a purchasing decisions.

If you are interested in learning more about investing in real estate using your IRA, please download our guide: