Real estate is often noted for being one of the best and most secure investments you can make, and once you understand how to buy an investment property, you will see how easy it is and all of the benefits it can provide.
In fact, investment homes are so lucrative that many experts are now recommending that first-time home buyers purchase an investment property rather than an owner-occupier property.
The vast majority of people wait to invest in real estate until after they have purchased a first home, and quite often, a second home, but property investing can be started much sooner than that. First-home buyers often suffer from average credit ratings, lead unpredictable lives and have limited responsibilities, but with a little effort, intelligence and diligence, these qualities can be leveraged into a profitable investment that will continue to reward you for years to come.
Most people follow the basic track after they graduate from college. They get their first real jobs, rent homes, get married, buy starter homes and have children. Taking it even further, the majority of people then raise their children, buy second homes and pay for their children’s education before making investments. This path is so popular for a reason: It works. However, it is not the only path that leads to a fruitful and successful life.
If you stop to think about it, it doesn’t make much sense for a young college graduate with a good job to wait until he or she is 40 years old to start making responsible investments. During that time, your investments could grow in value substantially, and if done right, invesating could lead to an early retirement. Of course, you should be prepared to make some lifestyle changes and accept a larger degree of responsibility.
Five reasons why it is a good idea to buy investment property early in life:
1. You can take advantage of your youth.
While being young has some disadvantages in the world of general investing, you can turn your age into a benefit. You have time to experiment and learn how to buy an investment property, and you can correct any mistakes you make along the way without worrying that it is too late. In addition, instead of simply throwing your money out the window, having fun and living an adventurous life, you can be setting yourself up to be living an amazing life shortly down the road. When you are young, you can also save money in ways you can’t when you get older and have other family and work-related responsibilities.
2. Real estate is an inexpensive investment.
While homes and other structures are some of the most expensive items you can buy, they are relatively cheap when compared to other investments. Home prices are on the rise, but it is possible to find bargains in nearly all real estate markets. Distressed sales, or foreclosure sales, occur all the time. Banks and lenders want to get rid of these properties as quickly as possible to clear them off the table. Banks are not in the property management business, and they are willing to go below market value just to pass these assets on to others. In addition, distressed sales often lower the values of other homes in the neighbourhood, so you do not always have to buy at a foreclosure auction to take advantage of the situation. In addition, most real estate experts agree that the market is ready for a rebound, and jumping in now will pay off later.
3. You can take advantage of federal and state grants.
Grants and special loans with low down payments are often available to first-home buyers. Some of these are offered through the federal government while others are specific to your state. When buying new or substantially renovated homes, the grants can be much larger than the standard ones.
4. You can supplement your income.
Why settle for your regular paycheck when you can be making money in your spare time through rental income. In many markets, rent prices are growing faster than selling prices for homes. Restrictions on loan applications and local demand can raise your rental rates higher than your monthly mortgage, which allows you to pocket the difference.
5. Real estate is projected to be high in demand for the foreseeable future.
Young buyers and an influx of immigrants is expected to increase the demand for housing, and when real estate options are limited, values skyrocket. By entering the market now, you will be in a favourable position to make substantial profits down the road.