Would you like to learn how to turn $10,000 into $100,000? According to real estate investors on YouTube like “MeetKevin,” it’s actually pretty easy. Start by buying your first rental property by only putting 3% down with an FHA loan, live in it for year, then rent it out and start the process over again. Eventually, you will have a very large net worth.
This leverage-based wealth-building worked for MeetKevin and other famous YouTube personalities like Graham Stephan. Real estate, specifically rental properties, is how these digital finance gurus made their first million, so it makes sense that they would preach the virtues of being a landlord to their subscribers. Although most of their income now comes from YouTube ad revenue (Graham Stephan made over $1.6 million in one year from ad revenue), it is a fact that rental property investing has become highly lucrative for many people. It’s allure is now spreading like wildfire to financially troubled Millennials and even Gen Z’s.
On his YouTube channel, MeetKevin gives financial advice. He also recognizes the seeming hypocrisy in that he encourages people to own real estate for themselves but makes his money from renters at his 12 rental properties. Owning a home has long been synonymous with the American dream. Now, it seems that owning a home for rental purposes is the true path towards generational wealth.
In 2007, nearly two-thirds of investors were focused on the stock market first and foremost. Now, only 50% of investors make that claim, with many Millennials choosing real estate investing instead. Their decision to invest in real estate most often comes in the form of purchasing rental properties.
According to the National Multifamily Housing Council, there are 44 million renter-occupied homes in America (compared to 75 million owned homes), and 75% of these rental properties are owned by individual investors. Personal finance personalities consistently push the idea that owning rental properties is the path towards wealth. And with articles being published on Bloomberg titled “America Should Become a Nation of Renters,” this influence, combined with a red-hot housing market that is pricing out first-time buyers, could start a trend in which the amount of renters in America increases over time.
If you listen to The Dave Ramsey Show, it’s not uncommon to hear a young person call in and ask if they should buy their first rental property before they even own their own home. Young people seem to have been captivated by the idea of making passive income while simultaneously increasing their net worth through home equity. YouTubers like MeetKevin are partially responsible. They give viewers complete insight into their net worth, multi-million dollar stock portfolios, rental properties, and more. They are honest about the many perils of being a landlord, but still strongly encourage their viewers to get into the rental property game.
Their videos, with titles like “How Much Passive Income 12 Houses Pay Me,” are truly captivating. In stunning 4K resolution, these entertainers are highly persuasive. The truth is that there are far bigger financial problems for young Americans than fear of missing out on owning rental properties. Student debt, a lack of wage growth, and the decreasing value of a college degree all play a hand in their struggles. These people are understandably impatient to improve their situation, and paying a mortgage they can barely afford for thirty years doesn’t seem like an appealing way to build wealth. Many of them are becoming convinced that it’s better to have a renter pay a mortgage for you, or to have many renters doing so. Then, a comfortable financial future might not be so far out of reach after all.
