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Home > Blog > Real Estate > Understanding the 5 Ds of Real Estate

Understanding the 5 Ds of Real Estate


Children of the 80s grew up playing a board game called the Game of Life.  There is probably a phone app version of this game available somewhere, but the young generation does not experience the slow progress of your tiny plastic car across the game board, as it inches through suburbia while filling up with pink and blue pegs that represent members of your family.  Buying or selling a house is anything but fun and games, but people’s moves do follow the same basic trajectory as that board game where children got to experience a taste of tedium.  In real life, people tend to move to different accommodations as their households gain and lose members and as their financial fortunes rise and fall.  When you buy real estate properties as an investment, you should think about which of the main motivations for renting or buying a house will motivate the tenants or buyers that you are seeking.  For help understanding how demographic trends can inform your real estate investing choices, contact a Bronx real estate attorney.

Life Transitions That Motivate People to Move to a New House

Real estate agents have developed a catchy mnemonic for remembering the most common reasons that people choose to buy or rent a new house.  These are the 5 Ds of real estate:

  • Diamond – People move to a new house when they reach a financial position where they can afford to. In some cases, the diamonds represent wedding rings; newlyweds account for a substantial portion of homebuyers.
  • Diapers – People buy houses because they need more room to accommodate new members of the family.
  • Divorce – When a couple divorces, at least one of them moves out of the marital home, and in some cases, neither spouse can afford to keep it.
  • Downsizing – People may decide to move to a smaller house when they retire or when their children grow up and move out of the house.
  • Death – The estate of a deceased person may sell the decedent’s house, or people may choose to rent out a house they inherited from a deceased relative.

Sometimes the last two Ds go together, when people buy a house with the goal of aging in place.  This means that they plan to continue living in the house for the rest of their lives, even if and when they need home health aide care or hospice care.

What Do the 5 Ds of Real Estate Have to Do With Your Real Estate Business?

Thinking about the reasons why people choose their housing accommodations can inform your decisions about who you are trying to rent to.  If you are buying single family homes, look for houses you can buy that will be affordable for families or where the layout is conducive to a group of housemates each having sufficient privacy.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you make wise decisions about choosing real estate properties to buy as an investment.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.



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