Soli Cayetano was glad to finally have some free time. In the spring of 2020, the soon-to-be college graduate was stuck at home and taking Zoom classes while he or she was bored. Her part-time job of renting out office space usually kept her busy, but at the time, her services weren’t exactly in high demand.
Cayetano was always busy. She called herself a “hustler” and got her first job when she was 14. So, she did some research and used some of her savings to fly from the San Francisco Bay Area to Cincinnati to see her big pandemic purchase: a two-bedroom house that she bought for just under $100,000. She turned 22.
Cayetano never thought he would move to Ohio. Instead, she did what a lot of real estate investors do: she fixed up the house and put it up for rent. After the house was empty for a few months, she fired her property manager and found a tenant by putting the house on Zillow and paying an investor friend in the area to do showings. After almost three years, she not only manages that first property from her home in California, but she has also built a 36-unit real estate empire.
Even though Cayetano got into real estate investing in many ways that have been done before, her methods and way of thinking were definitely of a new generation. She is part of Gen Z, which is the group of people born between 1997 and 2012. Unlike the millennials who came before them, Gen Zers grew up during a time when home prices were going up. As the older members of this generation get jobs, more and more of them are turning to real estate investing as a way to get out from behind a desk. Gen Zers are eager to get into the real estate market. They have access to technology and knowledge that previous generations could only dream of having at their age. As they claim their piece of the pie, they are likely to change the way the housing market works.
The American dream today
When it comes to the housing market, there’s still a lot we don’t know about Gen Z. This is because many of them are just starting out on their own. But compared to millennials, who came of age during the Great Recession and housing bust, Gen Zers have been lucky. Thanks to government help and a strong job market, they mostly avoided economic disaster when the pandemic hit. They also don’t have the same scars from the collapse of the housing market in 2008, since the oldest of them were only 11 or 12 at the time. The pandemic messed up a lot of Gen Zers’ plans for what to do after college. It has also pushed more of them toward alternative investments like real estate.
That could help explain why Gen Zers think investing in real estate is a better idea than the people who came before them. In a 2020 survey by Gen Z Planet, a research and advisory firm, 87% of Gen Z respondents said they wanted to own a home in the future, while only 63% of millennial respondents said the same. The survey showed that 68% of Gen Zers saw buying a home as a way to build wealth, while only 60% of millennials felt the same way. In another survey from 2021, online lender RocketMortgage found that 86% of Gen Z respondents want to buy a home and 45% want to buy within the next 5 years.
Cayetano told me, “We learned a lot from that recession in 2008.” “One thing we learned is that the value of real estate keeps going up and up.”
Gen Zers haven’t had the chance to do much with that knowledge yet, mostly owing to their youth. But Gen Z will almost certainly have more homeowners in the coming years as they move up the corporate ladder and save money. The National Association of Realtors says that in 2021, millennials bought about 43% of all homes in the US. Only 2% of people who bought a home that year were from Gen Z, but the NAR only counted people who were born in 1999 or later. In a separate study, LendingTree looked at Gen Zers who were born in 1997 or later and used LendingTree’s platform. These Gen Zers made up an average of 10% of homebuyers in the 50 largest US metros in 2021, up from nearly 6% in 2020.
From that bad time, we learned a lot. One of the things we learned is that real-estate values bounce back and keep going up.
Gen Zers have numerous sources of information at their disposal as they look to get started in the business. Cayetano started learning about investing in real estate before she graduated from college. She listened to podcasts, read books, and looked through online investing forums like BiggerPockets. She wrote about real estate on Instagram, where she quickly found a group of people who were also interested and willing to share tips. She worked jobs while she was in school and saved up $20,000 for a down payment. When it came time to choose a property, she wasn’t limited by the few options in her expensive part of California. Instead, she looked to Cincinnati, confident that FaceTime, local connections, and online listings would let her choose the right home without visiting it in person. Cayetano manages the house from afar using software for landlords. This is another change from the past, when mom-and-pop landlords usually lived close to their properties.
Cayetano turned that first purchase into partial or full ownership of 36 units in Ohio and Georgia, including a small apartment building, a couple of duplexes, and single-family homes. Most of the things she and her business partners have bought have been paid for with loans from individual investors and hard-money lenders. She keeps writing about her investments on Instagram, where she has more than 100,000 followers, and on her website, Lattes & Leases, where she offers courses to help other investors do what she does.
She told me, “I think there’s a big difference between my parents’ generation, who worked at the same job for 40 years, and my generation, who want to go wherever they want.” “Their priorities in life are different.”