Between climate change, the rising cost of living, and dwindling job security, it would seem that today’s millennials have plenty to worry about before buying a house becomes a viable option, but some industry professionals disagree. With house prices on a general upward swing, real estate is still a solid investment towards a future of financial freedom, especially if you know where to buy in. By following a few simple rules, market-savvy millennials can cement their place in the property market with plenty of time to spare.
Jump In
The most important thing to know is that youth and inexperience won’t stop you from setting up the beginnings of a glowing property portfolio, unless you let them. In fact, investing at a young age is one of the best things you can do for your financial future. With time on your side, you’ll have a great opportunity to build long-term wealth through the magic of compound interest, but the process will be much easier if you take the time to…
Educate Yourself
When you’re new to the world of investing, everything from the jargon to the processes probably seems wildly unfamiliar, so it’s important to do your research. The knowledge base you form today will give you the confidence you need to enter the market, and the know-how to steer clear of disingenuous property promoters. It could even form the basis of your approach to property investment for years to come. Whether you speak to your lender, ask questions of prominent property gurus (example), or soak up all the information you can get from books and online sources, every action is a step towards a brighter future.
Evaluate Your Financial Strategy
Prior to purchasing property for the first time, most young buyers will require a hefty bank loan, which makes a steady strategy paramount to repayment success. Two of your most important decisions will be the terms of your loan, and your lender. Whether you’re planning on taking out a long-term loan with a lower interest rate, or just paying it off as fast as you can, give careful consideration to the home loan offers available from different lenders, particularly those which have proven popular amongst other buyers. Take ING Direct as an example – Lendi revealed that the lowest interest rate for ING Direct was 3.59% with an average term of 25 years, a reasonably low rate for the term, but shopping around is still the best way to secure the best loan agreement for you.
Determine Your Investment Strategy
From the perspective of a fresh-faced wannabe investor, it might seem like the property market is a place for the fortunate, but there’s more to it than luck and money. Many successful investors achieve their success as a result of strong plans and strategy, and it starts with something as simple as choosing a property in the right location, but the next step is up to you. It is worth trying out property auctions for example (see here). Once you’re in the game, your next moves might involve buying more properties and renting them out to tenants, renovating your new place to add value, or simply sitting on your purchase until the value increases enough to sell. There are many ways to turn property investment into extra pocket money, as long as you start with a plan.
Enlist the Help of a Financial Advisor You Trust
If your financial strategy isn’t as watertight as you might like, enlisting an advisor (this article explains the benefits) could be the turning point you’re after. A trustworthy financial advisor is an invaluable resource when you’re preparing to invest in property, and an objective guide to help you weigh up your options. Finding someone who knows the market you’re looking at can streamline the entire process and save you invaluable time, but even more critical is their knowledge of your age demographic, goals, and timeline.
Identify Strong Real Estate Markets
A thriving real estate market is about more than sale prices or the number of houses listed on the market at any one time – it has more to do with the residents of the area. A diverse population, strong job growth, and low vacancy rates are the trifecta when it comes to spotting a great market, so do some research on the area you’re considering and, where possible, pay a visit in person. Even things like the external appearance of surrounding houses and facilities can tell you a lot about the neighborhood.
The truth is that there will always be peaks and troughs in the world of investment, whether you’re buying property, shares, or any other commodity. Yet, even after all of the trials and tribulations that go along with entering the property market, it remains one of the most worthwhile long-term investments you could make, and even more so if you’re able to start young. The bottom line is that the wealth you stand to build through your investments could help you create the kind of financial stability which tops many a millennial wish list, and you can’t put a price on that.