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How to Start Investing in Real Estate at a Young Age

How to Start Investing in Real Estate at a Young Age

The trend today is that more and more young people are looking to invest in real estate. Following are some tips on how to invest in real estate at a young age.

Collect information – It is helpful to keep yourself abreast of the dynamics of the industry by extensive reading, researching, and gaining basic knowledge of the real estate market.

Get help – Seeking advice from others who have invested in the real estate market will help you get a realistic perspective of what this entails. There are also qualified professionals who can help you figure out your options and explain the intricacies of the real estate market to you.

Co-borrowing – This method of sharing the cost of the investment with other investors will reduce your financial risk as you will share the loan and also additional expenses such as brokerage, stamp duty, etc.

Be financially disciplined – Plan your finances carefully and accumulate your savings as banks usually look at proof of savings being made regularly over a period of time. It is important to instil good savings habits early on and put money away early on.

Place your focus on income or yield – It is advisable for young investors to focus on income from their property assets. Invest only in properties that will appreciate in the future and give you healthy capital gains.

Expand your portfolio – Diversification of portfolio to include different classes of real estate such as commercial, residential, and retail is vital so as to minimize the risk arising from market fluctuations. Also, commercial properties generally fetch better returns.

Make contingency plans – Prepare ahead for contingencies such as a delay in construction or delay in payment of rent by tenants. It is important to keep aside ample finances to tide over such situations and meet regular expenses.

Be prepared for a long-term investment – Real estate is not an investment that yields returns on an immediate basis and this is something to bear in mind while taking the decision to invest.

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