In this day and age, it may be difficult to secure financial stability early on in life. People are finding themselves later and later when it comes to having a solid financial foundation, which can inhibit their ability to move on with their lives. If you aren’t fortunate enough to come into a large inheritance or have parents who can help you out, it may seem impossible to get your foot in the door when it comes to real estate investing.
But the truth is, anyone can be a real estate investor – even in their 20s. All it takes is some dedication, a bit of research, and most importantly, a willingness to take some risks. Indeed, some starting capital is always helpful, but it’s certainly not a requirement.
As you educate yourself, keep good credit history, find a mentor or partner, implement creative strategies, and focus on the long-term, you too can be a successful real estate investor in your 20s and get your first rental in 6 months or even less. Here’s how to get started:
Educate Yourself on Real Estate Investing
The most important thing you can do as a 20-something real estate investor is educate yourself. This means you need to get the hang of the lingo, learn about different types of investments, and understand the risks and rewards associated with each. You’ll also want to be up-to-date on market trends and the current state of the economy.
It’s also helpful to have some knowledge about the law-related aspects of real estate investing, such as zoning ordinances and tax laws. You can start by reading books and articles, listening to podcasts, and watching videos on the subject. Once you understand the basics, you can start attending workshops, seminars, and local meetups.
Save Money and Gather Funds
While you don’t need a lot of money to get started in real estate investing, it definitely doesn’t hurt to have some saved up. You’ll need money for a down payment on a property, as well as for any necessary repairs or renovations. You should also have some cash reserves in case you need to make mortgage payments while the property is vacant or if any unexpected expenses come up.
If you don’t have any money saved up, you may need to get creative. You could take on a roommate to split living expenses, get a part-time job, or start a side hustle. You could also consider getting a loan from family or friends, using a home equity line of credit (HELOC), or taking out a personal loan.
Keep a Good Credit Score
Speaking of loans, keeping a good credit score is crucial if you want to be a successful real estate investor. There’s a high chance that you will need to take out a mortgage at some point, and your credit score will play a significant role in determining the interest rate you’ll get.
You can get a free copy of your credit report from each of the three major credit bureaus once per year. Review your report for any errors and take steps to improve your score if necessary. This may include paying your bills on time, maintaining an excellent credit-to-debt ratio, and using various types of credit.
Find a Mentor or Partner
It is not a secret that having a mentor or a partner that will keep you up to date with trends in the industry can help you get to the top much quicker. They will be able to offer advice and guidance and can also help you make connections and access resources that you may not have otherwise.
On top of that, as you start your journey together with your partner, you can share the costs and profits associated with your investments. This will help you reduce your overall risk while still providing you with the opportunity to grow your portfolio.
Implement Creative Strategies
There are many different ways to make money in real estate, so don’t be afraid to get creative. If you don’t have the money for a down payment or the money to buy a property outright, you can always get creative with financing. You could also try buying properties at auction or rent-to-own situations in which you take over someone’s mortgage payments after they fall behind on their mortgages.
Another smart strategy is to look into multifamily real estate investments, such as duplexes and apartment buildings. These types of properties tend not only to produce higher rates of return than single-family homes do but are also less risky because tenants help offset any unexpected expenses that may come up by paying for repairs and other maintenance costs themselves – the passive income from the property essentially pays for itself.
Becoming a real estate investor in your 20s is certainly possible – all it takes is some dedication and creativity. By educating yourself on the basics, saving up money, maintaining a good credit score, finding a mentor or partner, and implementing creative strategies, you too can be a successful real estate investor.
The biggest key to success is to focus on the long-term. Don’t get caught up in the day-to-day fluctuations of the market or the ups and downs of the economy. Instead, focus on building a solid portfolio that will offer you financial security for years to come. Good luck with your investing journey!