Wednesday, March 25, 2009

The Unknowing Student…

By: Shane Scanlon

As a soon-to-be college graduate, my cohorts and I should gain a sense of freedom; alleviating oneself from a lifetime of structured learning and accruing debt. Graduates across the country are finally given the excitement of trying to map out the next 60 years of their lives; however given the current volatility of worldwide economies, we have found ourselves coping with the greatest deal of uncertainty. With the tailspin of the financial markets and many “gen Y-ers” experiencing a first-hand account of their parent’s retirement plans diminishing, another question remains: What are we to do with our money?

As a child, my father always stressed how first impressions are everlasting, and I find that notion true based on my personal experiences to this point in my life. If true with people, I also feel could be true with investing and in a student’s case, there may be a lifetime of paranoia linked to this practice. Between the Dow Jones standing at a mere 58% today compared to its 52-week high and Bernie Madoff organizing the largest investment scandal by a single person, students are going to be left vulnerable in search of a stable avenue for their money. As surprising as this may sound to some of us within the industry, there are people out there who are not aware of passive investment in real estate. The media has engraved the idea of “Flip This House” to be investment real estate which has left people in their mid-20’s shying away from wanting to learn more due to their home-value tumble. In a study done at the University of Tampa, only 5 students of 40 were aware of what a net-lease investment was, and also 33 individuals identified investing in real estate “unfavorable.” When following up with some of these individuals I had found that none of the 5 students who knew what a net-lease investment was were in the 82nd percentile who suspect investing in real estate to be unfavorable.

I see a long-term opportunity for many professionals involved in real estate investment. Sure, it is unreasonable to assume a 23-year-old college graduate earning $42 thousand annually is going to be able to currently afford a $5 million Walgreens, however the ability to penetrate this market with the idea of educating can be advantageous. By simply creating awareness of what a net leased asset is and the passivity of such an investment, you can engage an entire age group who is looking for that trustworthy “someone” to provide answers during their greatest period of ambiguity.

“With every challenge comes a new strategy for taking action.” – Ralph Marston

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