Property prices are on the move while income isn’t growing at a similar pace. This brings up several concerns. First, today’s generation of young adults aren’t able to buy property at the same rates as past generations. Most first-time property buyers are older than they used to be, and people in their twenties own less property than before. As such, you might be thinking that it’s not possible to take your first step on the property ladder before you turn 30, but that’s not the case. Read on to learn more.
Smart planning is always worth the effort. When thinking about the best age to start investing in real estate, sooner is almost always better than later. Once you get started, you’ll be better prepared going forward to make the second (and eventually third) step up in the world of real estate.
With some willpower, patience, and savings, you can take your first step on the property ladder and the tips below can help.
1. Know Your Reasons for Investing
One of the most important things you have to know before you start investing in real estate is why, exactly, you want to invest in it. If you’re part of the generation that is enjoying or struggling with high job mobility across the board, then you might not feel inclined to put down roots, but there are still plenty of good reasons to buy property, still.
The investment potential of the property is still strong, but to make the best of it, you have to know what, exactly, you’re investing in and what your plans are, for it. This can include buying a rental property so you can enjoy the value of the asset itself, while also bringing in a revenue stream. You can split ownership of a property, buying a share in the one you want to get your foot in the market early. Or, you might be considering the prospect of investing in a property for longer to maximize its value and to flip it. The strategy for each approach is different, so know what you want, ahead of time.
2. Get Your Budget in Order
For most people, the biggest barrier between them and getting on the property ladder is the sheer cost associated with it and, as such, taking the time to save up the downpayment you need is vital. However, you also have to make sure that you have accounted for all of the costs you’re likely to encounter besides that and have a home-buying budget at the ready so that you’re able to deal with costs in an expected and reliable way. Nowadays, it takes roughly four years of savings to put together the money needed to start the home-buying purchase.
Aside from creating a budget, be active in your savings plan, don’t neglect them. For instance, you can consider automating transfers from your current account to a savings account created specifically to gather the money you need for your home.
3. Find the Right Loan
Unless you’re somehow able to bootstrap together all of the money that you require to buy a house outright, or you can get some help from family or other contacts, you’re likely to need a loan for your home, like most other first-time owners. However, if you’re not well versed in the market, then you might not know what’s on offer as well as some.
Working with a mortgage broker can help you get access to a whole host of information and knowledge on loans that might otherwise take a much longer time to put together. You can get a good idea of what loans are available to you, and what terms they offer, as well as advice on which of them might be best suited to your individual needs.
4. Operate with Some Market Knowledge
Getting the best deal on the right property, and finding opportunities for real growth based on your investment requires a close eye on the market. While it is possible to get informed and to develop an understanding of the market, through property blogs and publications, you can also work with those who have developed that knowledge firsthand.
Investing in property without the help of a professional expert in the field can be a very risky game. By choosing the top realtor, you can get a much better eye over the trends and moves in different neighborhoods, helping you get the ball rolling when the right opportunity pops up. Realtors do more than facilitate a sale or buying process, they should be one of your most valuable advisors.
Optional Step: See If You Can Get Some Help with the Money Side
If there is financial assistance available from the state that you’re able to apply for, then you should take advantage of it, by all means. More first-time property owners are seeing what money help is available in their area, which can make purchasing much easier.
This can include things like particular savings accounts that see the state contribute towards it if you’re able to hit certain savings goals. Take a look at the different home-buying options across the country and closer to you to see what you might be able to make use of.
5. Be Ready for Unexpected Costs
There’s enough expense to go around when buying a property already, even besides the cost of buying the home itself. You are going to have to account for realtor fees, legal fees, the costs of moving, and more besides that. As mentioned, it’s always a good idea to plan out a full breakdown of the costs before you commit.
That said, you should ensure that your budget also has a little extra to account for the extra surprise costs that can come with buying a home. This can include things like mortgage insurance, your first hit of property tax, and any maintenance that the home may need.
Getting your foot on the property ladder is not the easiest thing in the world, by any means, but it certainly is doable. With the right patience, an active goal of saving to meet the costs, and the tips above, you can make a successful investment out of your first purchase.