Start investing in real estate now and retire early! If you’re in your 20s or 30s and think you’re still too young to invest your money, I recommend you rethink this. Financial planners and experts around the country advise not to wait until after retirement and, instead, encourage people to start investing while they’re still young. If you think about it, owning an investment property comes with a lot of perks and advantages, so why wait to enjoy them? Keep reading to learn why you should seriously consider investing in real estate today and not wait until after retirement.
Why You Shouldn’t Wait to Start Investing in Real Estate
1) The Real Estate Business Is Constantly Changing
Yes, real estate is known to be a safe investment strategy and a great way to start making money. That, however, doesn’t make it a static business. You shouldn’t say to yourself “OK, the housing market is doing great this year, so it’ll for sure still be a good investment strategy 10 – 20 years from now.” This is not how investing in real estate works.
This quote is the best advice we can give beginner property investors. While you’re still young, you have plenty of time to plan out your investments and learn the business. You can make more calculated investment decisions to evaluate your current financial standing, get organized, set your goals, and manage your future business. In addition, if you make a mistake, you’ll have the time to fix it and get back on track without worrying about losing too much from your profit.
Related: The 17 Worst Real Estate Investing Mistakes and How to Avoid Them
On the other hand, if you wait too long to buy your first investment property, you might wake up one day and discover that the housing market is not as strong as it used to be or that you’ve missed out on your investment opportunity. Moreover, investing in real estate is learning by doing, so it’s better to give yourself plenty of time to learn all the details of the business.
2) You Don’t Need a Lot of Money to Start
One misconception that a lot of beginner property investors believe is that you need a LOT of money to buy a rental property. Therefore, because they’re tight on cash, they decide to leave investing in real estate for after retirement when they have enough money saved up for buying a property fully in cash. If this is the main reason that’s stopping you from starting a real estate business today, we’ve got some good news for you. A real estate investor has the ability to invest with little (or even no) money!
Some of the financing options available for property investors include real estate partnerships, owner occupancy mortgage, hard money/private money loans, and others. As you can see, cash is not the only option there is for buying an investment property. To educate yourself more on this topic, read “Real Estate Investing for Beginners: Investing with Little or No Money.”
3) Real Estate Appreciation Takes Time
As mentioned earlier, investing in real estate offers a lot of benefits, one of which is making money over the long-term. With a rental property, a real estate investor will make rental income and profit from cash flow AND appreciation. Investment properties are imperishable assets, ever increasing in value. But, one thing aspiring property investors need to remember is that it takes time for appreciation to take effect.
Real estate investing experts believe in order for your rental property to double in value, you’ll need to hold it for a minimum of 10 years. This goes hand-in-hand with the above quote: buy real estate today, and wait to benefit from appreciation! Of course, the longer you hold a rental property, the better return on investment you can expect to receive – this is called the buy-and-hold investment strategy.
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How to Start Investing in Real Estate
Now that you know why it’s best to start real estate investing while still young instead of waiting until after retirement, here are some of the best tips to help you actually get started:
1) Develop Your Real Estate Business Plan
If you want to be a successful real estate investor, you must treat your investment as a business. And, just like any other business and industry, you’ll need to have a plan. Your real estate investing plan will show you the steps of getting started, what needs to be done, what resources are required, what to expect, and will keep you focused along your career as a real estate investor. Thus, take the time to think hard about your investment goals, strategy, financial and marketing plans, etc. Write them down and update the document as your real estate investment portfolio grows and new information comes in.
2) Start Saving Up
This next tip is a no-brainer. The sooner you start to save money, the sooner you can start investing in real estate. It’s not necessary to save up the entire price of a rental property – but you do need to save up for your first down payment. It’s typical for lenders to require from property investors a 20% down payment for financing investment properties. So, you might want to start setting aside a percentage of your income for real estate investing plans. Plus, a healthy saving history will look good to lenders.
Also, you may need to start building up your credit. So, get yourself a secure card, only buy what you can afford, and pay your bills on time. If you have any debt, pay it off before investing in real estate. The more debt paid off, the better your debt-to-income ratio is, which will result in a higher credit score. In addition, don’t add more debt before buying an investment property and keep both your credit and debt history clean.
Related: 9 Habits to Adopt Today to Have the Money to Buy an Investment Property by Next Year
3) Take Advantage of Today’s Technology
Technology has changed almost all aspects of life – including the real estate business. Today, a real estate investor can get access to multiple online tools designed with the purpose to help you excel in the industry. Some of these investment tools are right here, only one click away! Mashvisor helps property investors find, compare, and analyze the best investment properties in the city of their choice using 3 main tools: the property finder, investment property calculator, and the heat map. To learn more about our product, click here.
With our investment tools, you can turn your property search from 3 months to 15 minutes and start investing in real estate! To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
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