Is It Wise to Begin Investing In Real Estate At a Young Age?
Often when someone is considering investing in a rental property, the idea of additional income and equity building come rushing to mind. The idea that someone else can cover your mortgage, there by allowing you to focus on other things while still building wealth is a very appealing thought. However, this is not necessarily how investing in real estate will go – at least not at the beginning. This is one of the reasons that starting your investment journey while still young is a wonderful idea. This will allow you to build up experience and purchase properties at a more realistic pace before the hectic life of a full-time career, family, church..etc….begin to take up your time.
When you find an investor that is making a large return on one or all of their rental properties you can bet that it did not happen over night. They have put in a lot of time and effort learning their market, learning about real estate and learning about rental properties. As I stated before, the older you get, the less time you have with more job commitments, more family commitments and more hobbies you discover. This means that you have less time to learn about real estate, the different neighborhoods and markets and how to make money in this business.
Here are a few tips on getting great deals on a rental property:
-Use websites like Auction.com and Homesearch.com to find properties that are being sold via short sale, foreclosure or auction.
-RESEARCH! Take some time and do some serious research into the neighborhoods that you are looking at purchasing in.
-Don’t depend solely on a real estate agent to find you good deals. Many agents are not investors and won’t know what you are looking for.
-Go out of your way to join a real estate investing club in your area to meet other investors and learn what they are buying and how.
What Risks Are Involved in Investing at a Young Age?
Regardless of what age you are, there is definitely some risks and work involved with owning rental properties. One of, if not the biggest mistake that novice investors make is purchasing for appreciation with negative cash flow. While it is great if your property appreciates, positive cash flow should be a non-negotiable. When you have positive cash flow you have disposable income that you are able to use to make upgrades on properties that you own, purchase more properties, or spend on something fun and entertaining. If you have negative cash flow, there is a great chance things will end badly for the investor.
No matter how old you are, it is important that you go into real estate investing with your eyes wide open and as informed as possible. Make sure that you are not risking your financial future by purchasing a property and that you have made a budget for both the best and the worst case scenarios so that you should problems arise, you are prepared.