In the first part of this series, we looked at more practical reasons regarding why multi-family properties (fourplexes in particular) are gaining in popularity and thus becoming a very attractive asset class. From the affordability standpoint to the flexibility of footprint to overall design and structural shifts, fourplexes increasingly seem to “fit the bill,” which is why investors are eagerly seeking out opportunities where this specific class of multi-family housing is concerned.
In addition however, to the more practical considerations, there is also a generational component to consider. That is to say, what motivates Baby Boomers, Millennials and also Gen X-ers to relocate to fourplexes? Why is this type of housing so appealing to a certain demographic? Some of the answers may just surprise you.
Millennials: The Drive to Rent
This is currently the largest generation in the US. And the bulk of that generation this year into the next couple of years is turning 30. That said, while many Millennials are still not necessarily eager to jump into the homeowner end of the pool, they are looking to spread out beyond what an apartment for example might allow.
Many Millennial couples are now Millennial families; as such, they want that “homier” feel when it comes to their living space. Fourplexes deliver without the commitment of buying. Homeownership, for many in this age group, is still somewhat out of reach. Plus, this sector of the population does tend to value more of a “pick up and go” lifestyle. They want the best of both worlds—a spacious place to live and raise their family while not being so tied to a house thereby enabling them to travel and live somewhat more nomadically than their predecessors. Again, fourplexes to this end, tick all of the boxes.
Baby Boomer: Later in Life Shifts
A rather unexpected turn sees those people in the 55 and older category moving to rentals. In fact, as of 2017, over 30% of the renter population in the US was comprised of Baby Boomers. Why the move from owning homes to renting? Downsizing has a lot to do with it. Leading a scaled down more portable life is becoming highly important to senior citizens.
And yet, we are talking about people with families, with grandchildren; these are people who like to be able to accommodate their larger family’s needs but also their own need to make life more manageable as they age. This again, is where the fourplex design fits this lifestyle perfectly.
Gen X: Making Smart Money Moves
When we talk about Gen X and housing, we tend to come back to the more practical considerations. In particular, money. With this generation, we are looking at people who are currently putting their kids through college; some are also sharing in financial responsibility for their aging parents. As many Gen Xers are experiencing empty nests, they are looking to downsize, in large part, to save money.
Here once again, the fourplex has proven the ideal housing solution. Affordability is key, as is maintaining that more spacious and home-like feel versus what many apartments and other such multi-family units offer.
Paradyme’s latest project in Austin, TX came about as a result of scrutinizing tons of data, thoroughly researching the region, and of course, studying housing trends from practical perspectives as well as factoring in the less tangible data—all extremely important in identifying investment opportunities that are designed to thrive and make our clients money.