Have you ever considered investing in real estate?
If you haven’t, you should, even (especially) ifyou are young.
Investing in real estate as a young person can have many benefits. Today we are going to look at just a few of those benefits, as well as some easy ways to start investing young and pitfalls to avoid when starting out.
Why You Should Invest Young
Investing in real estate as a young person can be incredibly lucrative.
Here are a few reasons why you should start investing in real estate right now.
The Earlier You Invest, The More Time You Have For Value To Increase
The earlier you invest in real estate, the more time you give yourself for your assets to increase in value. Like the stock market, the real estate business has its ups and downs, but the more time you give yourself the more likely it is that you will find yourself with valuable assets.
The Earlier You Invest, The More Money You Have To Invest
We’re not suggesting that everyone in their twenties has a nest egg sitting around to invest in real estate. No matter what age you are you’ll most likely have to take the time to save before you are able to invest. But in theory, a younger person has more of their own money returning to them strictly because they have less monthly costs (spouse, children, college tuition, etc). This does not apply to everyone, but it is worth mentioning.
The Earlier You Invest, The More Time You Have To Do Things Your Way
If you invest young, you have the opportunity to invest your way, not the tired way others invest. We will talk more about this in the next section.
How To Invest Young
Now that we’ve convinced you to invest in real estate, we thought we should go over a few practical ways you can realistically start the process. Remember that investing takes time on the back end, and there is work to be done before you make your first investment.
Get Educated
While we think that anyone can invest, you do need to do your own research and be prepared. Real estate investment takes work, so you should be well-informed going into the process.
Put Aside Cash For Your Initial Investment
Like we said, we love real estate investing for young people because of the time it gives you for the expected ebb and flow of the market. Once you’ve decided to invest in real estate, you’ll need to get intentional in putting money aside for the initial costs involved.
Find A Partner
When you decide to invest young, you might find yourself lacking in funds, experience, or both. If this is the case, we suggest finding a partner that can complement what you bring to the table.
A word of caution, you’ll need to make sure you are confident in what you contribute to the partnership before entering into one.
House Hacking
House hacking is when you intentionally purchase a house or a multifamily property with extra bedrooms and then rent out those extra rooms to cover your expenses.
House hacking is a great way to gain experience as a property manager and as a real estate investor.
Pitfalls To Avoid
Here are some pitfalls to avoid when it comes to investing in real estate.
Getting Emotionally Involved
As with any business venture, it is important to find the balance between being passionate about your work and getting emotionally involved. Be wary of putting your heart and soul into your investments.
Chasing The Highest Yield Right Away
Everyone knows that real estate investment is not a “get rich quick” scheme. Even with this knowledge, some investors lean towards investing in properties that potentially have the highest yield.
When just starting out, you should focus on the slow and steady investments, where you can find more stability.
Thinking You’ll See ROI Quickly
Like we’ve established, investing in real estate will not give you a quick return on your investment. So instead of getting frustrated and giving up, know that slow and steady wins the race in the end. The benefit of starting your real estate investment journey young is that you have time to go slow and steady.
Investing in real estate can be intimidating at any age. But we think the benefits of investing outweigh the cons, especially if you start investing at a young age.