In today’s market, investing has grown beyond traditional assets. While stocks, bonds and mutual funds are still considered common investment options, there are many other avenues that can also be rewarding in the long run, if you are willing to put in the time. One such avenue is real estate investment. However when it comes to young real estate investors, the stakes are quite high. Because for unknown reasons, real estate is considered to be an investment opportunity for the older generation. But the good news is, the new generation is now getting more and more interested in investing in real estate. In spite of the growing interest , many young people don’t even know where to start. So in today’s article, we have listed down some important real estate tips for young investors to help them start their investment journey.
Research the Market
The very first step towards investing in real estate is getting well educated and getting enough knowledge about the market. How could you possibly know that you even want to be a real estate investor without knowing what’s actually involved? Just because real estate is a lucrative market, that shouldn’t be your only motivation. Otherwise it can be a major money pit. Research on what kinds of projects will yield the highest ROI for you. Know more about the trends, market ups and downs, future prospects and then decide.
Plan Ahead
Planning is key in every business. And real estate investment is not above it as well. Real estate investment can be complicated and demanding, and a solid plan can keep young investors organized and on task. Do you think with your current income you can save enough to submit the down payment of your first house? Are you eligible to apply for a home loan with your current income? Will your partner be able to help you out during a sudden financial crisis? What are your back-up options if there is a sudden inflation in the market? These are some of the important questions to ask yourself before you consider moving ahead with the investment plan.
Know What you Want
Youngsters get a bad name for not knowing what they want. But if you let your young enthusiasm get in the way then planning to invest in real estate might backfire for you. There are many different streams of real estate. You need to figure out which one is right for you. Do you want to flip a property? Or do you want to leave behind assets for your next generation? Are you interested in owning land? Or are you looking for an apartment to rent out and generate a steady income for yourself? Once you put your finger on what it is that you want, your investment prospects will open up tremendously.
Savings will Save you
For those of you who are super serious about starting to invest in real estate, savings will help you. Depending only on external funding will put a break on your investment dreams if you don’t have something saved up to kick start your dream. If you are living paycheck to paycheck then picking up a side hustle could be the way to go for you. Online platforms Upwork, Fiber provide great opportunities for you to start earning some extra money. Rent is another way you can save up some extra cash. If possible try moving in with your parents and save that money for later. You can also choose to live in an affordable area to save money on rent. You will be surprised to see how much you can save.
Take Advantage of Regulation Changes
Real estate investment is all about keeping yourself updated with the recent market trends. Just a small change in the regulations can make or break your investment prospects. So one of the biggest tips for young real estate investors is to take advantage of regulation changes. Keep an eye on any significant changes in interest rates, tax breaks or current market trends. For instance, in April 2020, Banks in the country started implementing single digit (9 per cent) interest rates for all kinds of loans (apart from credit cards) in compliance with the government which was previously as high as 13 per cent. So those who took advantage of this opportunity, were highly benefited in the long run as the deduction of the rate had a huge impact on their final payable loan amount.
No matter how appealing it may look from the outside, being a successful young real estate investor is challenging to say the least. However, by just keeping in mind these simple tips mentioned in the article, you will definitely be one step closer to becoming a successful real estate investor.
