Getting started investing in real estate at a young age is a great idea for several reasons. First, you can build significant equity in about 10 years (more or less) from owning a property. If you buy your first house, for example, while you’re still in your 20s, you’re still young enough in 10 years to carve out a career investing in real estate, starting by tapping into your equity, perhaps to buy more properties.
Moreover, you have time to try different investing methods to determine what works best for you. And people are generally more flexible before they start a family, which opens up more opportunities. Once people have children, challenges and responsibilities are many and it’s more difficult to move to a more favorable state for property buying or opening your home to renters.
When you are young, you have more flexibility in life, fewer commitments, and can take more financial risks. While you may be making less money, you likely have less financial responsibility. If you wait too long to start investing, family, work, and life makes it hard to learn about and invest in real estate. Aspiring investors should remember to use age as an advantage and test out multiple strategies and property types that may become more unattractive as you get older.
Aspiring investors should know that there are just as many solutions for real estate investing, as there are challenges. Learning how to invest in real estate young will take time and research, but young investors can set themselves up for lifelong success with the right preparation.
There are numerous benefits available to those who start investing at a young age. Perhaps most importantly is the opportunity to start on what would become a lifelong passion. Historically, real estate has proven to be a highly lucrative investment option. Those who take the time to learn about investing early can create the foundation for a worthwhile, profitable career in life.
Before committing to your first investment, it is important to consider the challenges you may face along the way as a young investor. By familiarizing yourself with the potential obstacles, you can help make sure you are prepared for any potential obstacles.
The Earlier, the Better
Many incredibly successful people recognized the potential of real estate investing at a young age and are now reaping the benefits. You can begin to develop good saving habits at an early age. This will be an invaluable experience, particularly if you have higher-budget long-term objectives in mind.
Purchasing is a sound financial decision through which you learn financial responsibility along with making money. You’ll be well ahead of your colleagues, who are likely unaware of the great potential of the real estate market. Suppose you still live at home and aren’t ready to leave. In that case, an investment property can provide you with additional income while only requiring you to pay low living expenses, depending on your family status.
Education and Experience
Most importantly, investing in real estate as a young person provides you with an education. Someone else in the real estate industry will always have more experience. Starting young means, you will have access to a wide range of knowledgeable property investors who can provide valuable advice.
This will prevent you from making the same mistakes they did when purchasing property, and you will be able to learn faster by following their steps to success. If you make any mistakes when you’re young, you’ll have plenty of time to learn from them.
Along with developing a habit of saving, you will learn other skills too. Real estate investing teaches you to think in new ways. You’ll learn to think about things differently and realize that money isn’t always the most important consideration when investing. To wait for the most incredible deals, you’ll need problem-solving skills as well as tenacity and determination. Suitable investments sometimes necessitate patience as well.
You are more liberated during your youth and early adulthood, and your passionate desire to buy a property can be a powerful ally in seeing and analyzing your possibilities.
This more fervent and intense demand may be the key to obtaining a dream home at a reasonable price. You don’t have to find a property that will be your first home if you invest in a property when you are still young. You can take advantage of a property with a favorable present market value while focusing on the property’s long-term financial benefits. You may save for your ideal home while earning cash from regular rental payments.
More time to reach maximum potential
When you are young, investing in real estate provides you with a chance to benefit from prime real estate while having your long-term goals in mind. Start early and scope out properties in ideal areas you’d like to live in for the future. Besides, you will have more time to give your property to reach its maximum profitable margin and pay off a great deal.
Challenges of Being A Young Real Estate Investor
Before committing to your first investment, it is important to consider the challenges you may face along the way as a young investor. By familiarizing yourself with the potential obstacles, you can help make sure you are prepared for any potential obstacles. Here are some of the challenges of being a young real estate investor (and how to overcome them):
Turning a Hobby Into a Business
While it may sound obvious at first, it’s important for investors to treat their new business like the business it is. Consequently, far too many new investors treat their first venture into entrepreneurship like a hobby.
Many young investors blame their inability to get started on a lack of resources. Some even report finding opportunities but complain they don’t have the money to take advantage of them. Others are too afraid to get started because they think they need more money. If you don’t get started, you won’t have any more than you do now. And there really are ways to invest in real estate with no money down. It’s just a matter of learning the right strategies and tactics. Have you considered a private money lender? Truth be told, a lack of capital should never be an excuse with all that is available out there. You need to know where to look and be prepared when an opportunity presents itself.
Not Being Taken Seriously
While youth is frequently considered a strong asset in business, many young entrepreneurs fear they won’t be taken seriously. Unfortunately, it is a legitimate fear, but not one that can’t be worked around. Know that there are many circles in which others are specifically looking for those that are 30 and under. Opportunities are there for younger investors, but you need to be willing to put in the time to gain experience. Let your hard work be your resume. It also wouldn’t hurt to hire a veteran mentor or to partner up with a more experienced investor.
Everyone that considers doing something different runs into the fear that they are insane for believing they can do it or should try it. Such feelings often sneak in right before the leap is made or after the initial excitement begins to wear off. Recognize that this is a way your brain sabotages you into inaction. Those in the business call it analysis paralysis. Don’t let this happen to you. Anticipate it, and realize the need to work through it to see results.
If you haven’t been through the real estate transaction process yet, buy a home. Owning your own home creates a great financial foundation and will kick start your investing. It will also teach you a ton about the process of investing purely for profit.
Lack of Established Credit
Younger real estate investors often have to face the reality that they don’t have well-established credit. Maybe you are fresh out of school, still in school, or have just been strict about paying cash for everything. Credit can play a role in some types of investing and in business. However, you don’t need great credit or any credit to get started investing in property. Don’t let this excuse rob you of your potential.
Buying and flipping houses is often made to appear very easy. However, it is easier said than done. New investors will quickly learn that they need to start marketing for deals, learn how to evaluate properties, and write offers. Some expect to be doing a dozen deals a month right out of the gate. Money can come fast and easy in real estate, but it can take some time to build up a pipeline and close deals. The better you understand what is really involved in getting a deal and what realistic volume is, the faster success will come.
Connections & Relationships
One of the myths about the wealthy one percent is that they were born with money and connections. Some are, but there are even more millionaires and highly successful real estate players that have worked their way up from the bottom. Connections and relationships are some of the easiest things to build. You may need to learn or hone some communication and rapport-building skills, but nothing is stopping you from getting out there and making new contacts today. Build contacts, and you will be surprised at where some of them end up taking your business.
Stop looking for people to sell to, or for deals to fall into your lap. Start looking for as many people as possible to help with their real estate and finance problems, and everything else will fall into place.
The ‘What’s Next’ Trap
If you keep getting stuck on what you need to do next, you’ve skipped the most important step in getting into real estate investing: a business plan. Create a system that works for you, one that is tailored to your goals. Use it as a reference when you get stuck.