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While We’re Young: Investing in Your 20’s and 30’s
While We’re Young: Investing in Your 20’s and 30’s
August 26, 2019
The vast majority of real estate investors are over the age of 45. Why? Does one simply become enlightened as to how to navigate the real estate market as they get older? Of course not! Simply put, most young people, those in their 20’s and 30’s feel ill equipped; believing they need more life experience before diving into the world of real estate investment. But investing earlier in life is not only possible, but may be very beneficial.
Here we will examine common reasons why young people wait to invest and how to overcome them.
“I’m too busy”. True, life is full of things to do. Work, play, time spent with friends and family , the list goes on. But guess what… It doesn’t get any better as you get older. In fact, many of those advanced in years even say it becomes more difficult manage time as you age! So if you’re waiting to invest until you have more free time, that day may never come.
” I can’t afford it”. Money is important in investing in real estate. Some have made claims that anyone can invest in real estate with no cash, credit, or problems – the fact is it does take money. But, that money doesn’t have to come from you. For example, you might be able to purchase a property through a hard money lender. Hard money lenders are non-bank individuals or companies that finance the acquisition and materials for repair based on the value of the property, rather than the value of your wallet. This financial backing plus a little elbow grease and you’re in business! If you’re willing to perform the majority of work and labor yourself, you can improve the property, and then subsequently refinance with no money out of your own pocket.
“I have bad credit”. If you’ve made mistakes regarding credit, or you just don’t have any, investing is not impossible. It simply takes another set of tools to make it happen.
First, you need to immediately begin fixing your credit. Research the topic, make a plan and stick to it! If you do this, you can repair your credit fairly easily. In the meantime, you can try rehabbing or wholesaling properties. Plus, hard money lenders don’t care that much about your credit. If you find a great deal with plenty of potential, you can find the funding. While you’re repairing your credit; NETWORK. It doesn’t take good credit to make offers, find motivated sellers, or contact other investors to share deals with. Wholesaling properties is an excellent way to learn the business, meet other investors, and earn good money – all without any credit involved.
“I don’t know enough”. That can be fixed! The first step is to invest in your education. One big advantage young investors have over the older generations is your ability to learn. As you age, your desire to pick up a book and learn or take a class on a subject decreases. You are not that far out of high school or college, so use those skills to learn how to invest. If you really want to invest in real estate, you’ll have to learn about it eventually. So why not do it sooner than later? Do it while you have the desire and your brain is more elastic, able to absorb new information.
“What if I lose everything?”. Investing, by nature, involves risk. However, the risk can be minimized and financial gain maximized by investing with careful criteria and sound judgment. No one wants to lose when it comes to investing. Who, though, is at the greater disadvantage when it comes to risk? Someone who is looking to retire in five years or forty years? Clearly, the younger you start, the more time you have to make mistakes and recover. We’re by no means suggesting that you make risky choices. However, don’t let fear of losing stop you from winning big.
“I’m kind of all over the place” Young people, by nature, are much more unstable in our lives. We change occupations, get married, have kids, move across town or across the country. However, this is used more an excuse than a legitimate reason. If you’re planning on moving to another state in six months, it doesn’t make a lot of sense to purchase a home. But you can still learn a lot by wholesaling a deal or two during this time to another investor, picking up on skills that will follow you wherever you move. The houses may change style, laws differ, and your income fluctuate – but the fundamentals of real estate are the same where ever you live.
If you’re interested in investing while you’re young, contact us! We’ve managed to do it and we’d love to help you achieve your investment goal. Smart Choice makes it easy to invest. We work hard so you don’t have to!
Elise Van Vuuren
Elise is Marketing Director of Smart Choice Real Estate Solutions. A Colorado native, she lives in Denver with her husband and their rescue dog, Scout.