A Simple Property Investment Strategy for Gen Y
Being new to property investment may appear daunting however it’s an ideal time to consider and employ an effective real estate investment strategy. The ever resilient property market is seeing young professionals in their early twenties venture into investing, one property at a time. Many ‘Gen Y’s’ are conscious of the importance of financial stability and understand how effective real estate investment can be. Investing early in life provides a solid foundation, allowing them to reap the rewards later in life. This simple, yet successful strategy is called, “Buy and Hold.” Here are some points you should consider when contemplating your own strategy.
These areas are usually close to business centres and lifestyle districts. Look for residential areas close to business centres or those easily accessible by public transportation. Real estate properties located further afield may cost less, however there is a higher element of risk due to the potential lack of rental demand, rental income and capital growth. We suggest seeking expert advice to assess these locations independently.
Opting to assess upscale properties that stretch your budget too far, is a quick way to heighten stress and dampen your resolve to invest altogether. While these may have a higher earning potential, your income requirements and lifestyle needs to be taken into account. Lower-value real estate can still earn solid income returns, depending on the location and smaller properties are often more enticing to single professionals searching for a rental. Also keep in mind that lower maintenance properties are more sustainable, requiring less time and maintenance costs. This positively impacts any potential financial strain.
When evaluating property prices, it’s important to evaluate the vicinity’s approximate rental rates. Look at rentals that are available now, as well as historical rental rates to understand how they have trended, compared with property prices. Once armed with this information, you have the advantage of immediately calculating your earnings if the property is kept and priced as is. Furthermore, it serves as a base for understanding the property’s earning potential should you consider improving it. For those new to investing, make a safe choice by acquiring a property with a neutral to positive cash flow.
Allot a certain amount of time between acquiring your first property and your second. Investing in one property is a big step and it’s important not to rush into the second purchase until you’re financially ready. It allows you to focus your money and effort until the property is steadily earning. Plus the experience will provide you with familiarity on how the process works, maintenance requirements and the associated costs. During this time you can focus on accumulating earnings for the next piece of real estate. The financial strain of purchasing a second property is then cushioned.
It’s more than likely that you have a lot of questions about real estate if you’re new to it. This is also the case for people who’ve invested in multiple properties. Don’t be shy about consulting with property professionals, it’s their job to help. Buyer’s agents should be a key consideration. They assist buyers with researching, selecting and purchasing properties that meet their goals. They take the pain out of investing while doing all the work for you and securing you an outcome.
Property investing doesn’t have to involve long and complicated strategies. If you’re simply looking for a relatively passive, additional financial stream, there are many options available, sufficient in helping you attain your objectives.