There’s a trend among 20-somethings and those in their early thirties to purchase a property as an investment.
Sometimes they go for a cheaper unit in a less desirable area and either rent themselves in an area they want to live or stay at home with their folks to minimise expenses. So, what do you do if you’re young and considering property investment? Here are some tips for you who dream of owning your home/s before hitting middle age.
1. Don’t Shy Away From Parental Assistance
You may want to live out of home once you’re of age, but you should take advantage of parental assistance when you can. Try living rent-free with your parents or splitting expenses in a shared house. That way, you can save the money you’ll need for the deposit and miscellaneous expenses.
Also, don’t be afraid to ask your parents for financial assistance if you want to invest in a property.
2. Save But Don’t Forget To Have Fun
Like with other investment, you’ll need to save money if you want to enter the property market. But that doesn’t mean that you’ll have to deprive your fleeting youth the enjoyment it needs. Try to put away half of your tax returns and bonuses, then the use the rest for travel and other investments which will enrich your life.
Develop great savings habits — like putting aside from any income, even casual jobs — to appeal to the lenders because they’ll be looking for proof of consistent savings over time.
3. Balance Your Wants And Needs
Pull back on the luxuries and prioritise the things you need over the things you just want. A couple of temporary sacrifices will ensure you’re financially prepared to purchase your investment property. Such sacrifices include altering your living arrangements, cutting back on your expenses (eating out, entertainment and luxury items as such), and taking a second job during your free time.
4. Manage Your Expectations
Investing is about numbers so one of the first things you need to do is to manage your expectations on how you think an investment property is to look and feel. At a young age, it can be harder to distinguish between properties you want to live in and ones that stack up well as an investment. Don’t rule out properties that are rough around the edges or those in neighbourhoods that aren’t as popular.
5. Invest In Yourself
If you’re looking to invest in property, it’s best to invest in yourself first. Read, ask questions and then read some more. Mistakes in property investment can be quite expensive and take a couple of years to recover from. Remember that investing without knowledge is not investing — it’s gambling.