Pickleball. Candy Crush. Parting your hair in the middle. Skinny jeans. Living in Florida. People may dismiss all these things as being for the Olds, but we could all destress a little by occasionally activating a striped candy and wiping out a row of virtual sweets.
Perceptions about the age-appropriateness of something shouldn’t prevent you from partaking if it benefits you. That also means setting aside preconceived notions about who should invest in real estate. It’s not just a young person’s game. Don’t let age deter you from investing in real estate. The sooner you start, the sooner you can take advantage of the many benefits of owning investment properties. Let’s examine the advantages of buying investment real estate while you are still young.
Earn Supplemental Income
When you are starting out, your income might be on the lower side. Having a monthly rent check deposited into your account can go a long way towards easing the stress on your finances that comes with entry-level pay. Your rental cash flow will make the biggest difference while your other income is relatively low. It can help you live the c-suite life, even if you are still planted in a cube farm for now.
Earn Supplemental Income
Investment properties are a long-term wealth-generation endeavor. It stands to reason that the younger you are, the longer your ‘long-term’ can be. Starting in your twenties means you have a 40-year horizon before the traditional retirement age. During those four decades, the rents you can charge on your properties will increase, thanks to inflation.
Your equity will also grow as you gradually pay off your mortgage. In addition to ever-increasing cash flow and growing equity, the value of your property will also rise over time. That means if you choose to liquidate it to fund your retirement, you will have an excellent little piggy bank to break open.
Smooth out Rough Patches
Over time, property values increase. That’s why your grandparents were able to purchase a home for $3000, and you can’t even get a decent used car for that much. But occasionally, there are bumps on the road to real estate riches.
When you start investing young, those bumps get smaller and smaller relative to the growth you can expect to see. Think of it like zooming out on a photo. What looked like a massive zit at magnification isn’t even noticeable from far away. That’s because, relative to the overall photo, it takes up fewer pixels.
Your age has the same effect on your real estate portfolio; a moderate market correction has essentially no meaning when your timescale is thirty or more years. The younger you start, the more of that blurring zoom you have available.
Preserve Your Free Time
When you are younger, you are likely pushing hard at your career. You want to establish yourself and make great impressions on bosses and clients. That leaves little time for side hustles. Real estate investment is a largely passive endeavor, especially if you use a property manager. You don’t have to pull your focus away from establishing yourself professionally. That means maintaining your free time for hobbies, and relationships, studying for the bar exam, or playing silly games on your phone.
If you want to spend even less time on your real estate investments, consider working with a real estate investment company. They will do most of the work to find quality investment properties, so you don’t have to spend your time locating great deals.
Hone Your Skills
While anyone can and should consider investing in real estate, some skills make owning investment properties even easier and more successful. The younger you start, the sooner you can begin honing those skills. Unlike a closet full of skinny jeans, that’s something you can feel great about.
Invest Before Other Priorities Arise
When you are young, you have fewer competing priorities, making it the perfect time to spend some of your hard-earned money on setting yourself up for your future. You don’t yet have diapers to buy, 529 accounts to fund, or bills for your budding all-star’s pitching coach.
In many cases, even buying an investment property before buying your own home may make sense. By beginning your real estate investing when you are younger, you purchase your first properties before these competing expenses get in the way. You also make real estate investment a habit, which means you are more likely to find ways to continue as life tries to get in the way. And as a bonus, you will have that rental cash flow to help offset the costs of diapers and tuition.
When it comes to real estate investing, the sooner you start, the longer you have to see the benefits of owning real estate. So what are you waiting for? You’re going to absolutely crush it!
