Don’t put off a plan to invest in real estate until you’re older. If you look closely at many successful people and study their backstories, you’re likely to find that they have one thing in common. Most got started at a young age, persevered, and thrived with the passage of time.
No matter your area of interest or the industry you work in, starting young nearly always yields better, far-reaching results.
Many think that real estate investment is a game for seasoned businessmen and wealthy retirees. However, nothing is ever that black and white. Similar to sports, television, or business, real estate investment can begin at an early age and reap huge rewards over time.
If you are a young person looking to buy your first property and begin your real estate investment journey, consider the suggested guidelines listed below.
Plan for your future by educating yourself.
Investing in real estate or any other business is hardly a piece of cake. Your very first step toward it should be educating yourself. Many people look exclusively toward an end result, namely that they want to be wealthy, but that attitude doesn’t typically yield success.
To get to the desired end result, you have to start by putting in the effort required to start educating yourself. For starters, consider going to investment-related seminars or taking an online course.
When you have acquired sufficient knowledge and feel confident, set realistic goals for yourself and work toward them. Ask yourself questions. What kind of property would you like to invest in? How much will it cost? How can you begin saving for it? Are there any other ways you can finance your purchase?
Asking questions such as these will lead you to pursue answers. They help you take baby steps such as inquiring about mortgage options and thinking up ways to save money.
Find a trustworthy, reliable mortgage broker.
While it’s possible to get a mortgage directly from the bank, working with an experienced and competent mortgage broker can make things a little easier.
A mortgage broker will take you through the entire mortgage application process. The financial and legal aspects of purchasing an investment property can be tedious. You want to make sure you get started on the right path.
Since you’re young, you may be entitled to various government grants or incentives that you may be unaware of. This is where you’ll realize the worth of partnering with a mortgage broker. They may be able to connect you to government grants that can save you a sizeable amount of money.
If you’re concerned about debt repayment and the duration of a loan, online mortgage repayment calculators can estimate what your monthly payments could be. In addition, a repayment calculator can keep you updated about your repayment timeline.
More specific types of loans are available as well. For example, it may make more sense financially for many young adults to start out with more humble beginnings regarding their investment properties. This is why so many folks are getting into the business of flipping homes. In this case, fix and flip loans may be a smart route to go if you are purchasing a “fixer upper”.
Start saving and spending wisely.
Confronted with escalating real estate values, buying property as an investment tool might seem like a long shot to younger buyers. However, this type of investment strategy is totally doable with the right strategy.
In addition to securing a mortgage, one important step you must take to invest in real estate is saving early and spending money carefully. Do your best to match your lifestyle and spending habits to your future goals by making a few sacrifices such as:
- cooking at home to avoid ordering outside food;
- joining an investors’ club instead of going to movies or hanging out;
- getting a second job on weekends;
- living with your parents for a while; or
- sharing an apartment or other living space.
Find a partner willing to invest in your dream.
If you lack investment capital, experience, or the confidence to invest, looking for a partner might be your best shot at investing in real estate while you’re still young.
However, always remember that partnerships should be two-way relationships. If your partner is bringing in investment, make sure you put in the legwork to add value. Consider approaching brokers, scan properties for sale in newspapers, and do what you can to find the best deals.
If you secure investment capital, make sure your partner receives a fair share of the profit and/or ownership of the property.
Learn how to invest from those who have “been there and done that.”
There’s no better way to learn any skill than working with those who have mastered it. See if you can find a seasoned investor or an experienced real estate agent willing to mentor you as you navigate the ins and outs of the business. Volunteer to help your partners find deals in exchange for teaching you the best techniques for investing.
Better yet, see if you can get an entry-level position at an established real estate agency or an investor’s office. Working closely with the pros will help you gain some real experience and a realistic view of the investment journey in real estate. You’ll learn a lot as you watch them locate properties and raise investment funds. You’ll also gain an appreciation for the science behind negotiating and closing deals.
Who knows? If you consistently demonstrate a strong work ethic and determination, they might hire you as a partner.
At the very least, working with an experienced professional will open doors to deeper learning and investment opportunities. Expansion, as you build upon early successes, is the ultimate reward and motivation for young people to start investing their time and money in real estate.
