For a young investor, real estate offers multiple ways to grow wealth because it facilitates multiple forms of investing. 90% of the world’s millionaires got their wealth from real estate investments. Even if statistics prove that real estate investing is a profitable venture, many still ask themselves if it’s a good idea to do it while in their twenties. Don’t you need any kind of experience? Real estate moguls state that there are plenty of reasons to invest in real estate in your twenties. But it’s important to educate yourself about what the process implies and what the key ways to make a profit are.
Most of the investors fail because they never research before buying rental properties or real estate. They don’t take time to learn what real estate investing implies and they are missing a great opportunity.
Why should you invest in your twenties? Because the longer you own a property the more income it brings. When you’re young, you have fewer commitments so you can take more risk. Don’t wait to get married and have children to invest. Do it now when you have flexibility in your life.
Real estate investing provides steady income
Entrepreneurs invest in real estate because rentals provide a steady flow of cash. You get passive income, so you can handle other business or have a 9 to 5 job. Depending on where the real estate is located, it can generate significant profit to cover all your expenses. It’s a smart decision to invest in real estate in a city or town with universities and colleges because the rental demand is high and you can earn a great income. You’ll operate on a competitive market so you can ask higher prices if you offer for rent modern spaces that meet students’ requirements.
When chosen wisely, real estate secures a steady flow of income for long periods and helps you put some money on the side. Once your first property starts generating profit, you can invest the extra money in other rentals to increase the cash flow and diversify your portfolio. You can manage the properties by yourself or hire an expert to do it. Don’t forget that the location is the determining factor in real estate success.
You can buy rental properties with little money down
The average bank requires investors to put 20% down on rental properties. Many people don’t afford this sum, especially when they have children because a rental property also needs repairs. They don’t afford to spend their savings on an investment they don’t know for sure it’s profitable. But people in their twenties are more prone to risk, especially when they have a full-time job that pays their bills.
When in your twenties, you can also buy a house as an owner occupant. Banks require only a 5% down for these investments. The disadvantage is that you cannot rent the house immediately, you need to live there for at least a year before renting it. These properties have an owner-occupancy requirement, you need to meet.
Buying a multifamily property is a smart decision because they can have up to four units, and you can live in one of them to meet the owner-occupancy requirements. This way you can rent the other units before the 12 months.
Young people find easier to move in houses they intend to use as investment properties later because they don’t have to convince their spouse and children to move annually.
Real estate provides long-term financial security
People choose to invest in real estate because it provides long term financial security. No matter what the outcome their other businesses is, their rental properties bring financial rewards for long periods. Owning a rental property affords a sense of security because of its appreciation in value over time.
It’s quite likely your real estate to increase in value in time because buildings and land are appreciative assets. But no one can guarantee that the property you buy will increase indefinitely. You should research to identify the trends of the market for that location to close a successful business.
You can experiment with various types of real estate
You are young, so you have all the time you need to experiment with multiple types of properties. Real estate competition is high and it calls for a creative approach when selecting a property. Nowadays investors compete in finding investment opportunities that meet certain return requirements. You need to research the market and identify the options that fall outside traditional. If rental properties are too mainstream for you, you can collaborate with agents with a portfolio that is letting you choose from vast solutions.
At present, young entrepreneurs prefer to take advantage of niche opportunities like co-living and multifamily buildings, cell towers, medical offices, senior housing, hotels, and data centres. If you intend to invest in a certain location check what niche provides pearls of great value. Specialisation can be the secret to getting wealth from real estate.
You make all decisions
Do you hate your 9-5 job because it’s too boring? Investing in real estate can help you become your own boss, and who knows, one day you may be running an empire. Real estate investing works similar to any other business you start because it offers complete control and autonomy over your venture. You decide what the further investments are, and what strategies you want to use to reach your goal. Running a real estate business allows you to call the shots. You select the property you want to invest in, the tenants who will live under your roof, and the monthly fees you want to ask.
As stated before, you can manage the business yourself or you can hire professionals to do it for you. At the start, it’s advisable to collaborate with experts because their expertise can help you grow your venture fast.
No one should doubt that the housing market provides plenty of opportunities for young investors. It’s important you to recognize the benefits and to educate yourself to make the best out of the situation.