The multi-generational family: An investors greatest asset?
It seems as though wherever we look there’s panic about the start of a multigenerational home era. It’s where middle aged people at the end of the baby boomer generation still have their 20-something children living at home and are facing being forced to care for their ageing parents at the same time. Three generations in one house – not many Aussie houses are geared for that!
A few economic influences in Australia’s recent history have led to this housing phenomenon – the older generation were the first to live with compulsory superannuation, and it started later through their lives. This means that unless they were very wise with their money and invested early on, their pensioners and the Australian government is struggling to increase the pension because of the ageing population. So a lot of this generation are strapped for cash. Care facilities and retirement living are still expensive so there’s little options other than living with the kids.
On the other hand, you have the younger generation, the 20-somethings fresh out of university (with $30,000+ education debt already) who are causing a commotion with avocado on toast and expensive cocktails, and claiming they’re faced with serious housing affordability issues. The housing affordability issues are no lie, but perhaps there is room for lifestyle adjustments to save for that deposit. The thing is, these younger people who want to leave the home get into a renting cycle and saving for a home of their own becomes close to impossible.
This is putting incredible strain on that middle generation who are carrying the older and younger ones and since they need bigger houses which are difficult to come by unless you have equity to invest well, this makes renting increasingly attractive.
So where does this leave property investors? With a unique situation that presents great opportunity – if they play their cards right.
The answer to this? Dual income properties. Think granny-flats and second living quarters. They’re becoming increasingly popular and there are more and more designs making it realistic.
We’re on the doorstep of a generational phenomenon where there will be more than two traditional structured generations living in a property and whether it’s the older or younger generation, they’re going to want their privacy.
Dual occupancy means there’s a separate living area, bedroom, bathroom and kitchenette adjoining the main property. It means that investors can actually rent properties to these multi-gen families and earn twice the income. It means that there’s more opportunities for increased cash flow with cash flow positive investments.
So be a smart investor and if you can, make the most of this opportunity before it disappears. If you’d like to learn more about dual occupancy investment opportunities, please contact us.