The real estate industry is a hard industry to get involved with; there’s lots of information, rules, and confining regulations. It can difficult for anyone to start investing in real estate, no matter their age. For Millennials investing in real estate there are a lot of considerations, but the payoff can be very rewarding. The details you face with real estate investing may prove overwhelming. With this guide you will have a better grasp on what it takes for a young person to get started with Washington DC real estate investing.
Being young has its benefits and drawbacks. Young people are able to experience the ups and downs of life with little to no consequences. However, this does not mean they will never have consequences. Between student loans and unsecured credit card debt, investing in real estate at a young age can be difficult. Here are a few things to consider before taking the next step into real estate investing:
- Little to No Money– Debt, student loans, and other living expenses make it difficult financially to make down payments and pay for closing costs. Having a great job, saving well, and having plenty of disposable income, can be a healthy start, but this is not always the case for every young person out there. Many are stuck living paycheck to paycheck, something to be considered before investing in real estate.
- Little Experience – For most Millennial real estate investors, information about the real estate industry may not be readily available. People within the real estate business, much like other industries, are consistently learning and developing their skills.
- Distractions– Traveling and experiencing the world first hand are great hobbies and activities, but these can be bigger distractions than most Millennials realize. Investing in real estate needs to be taken seriously and is often an anchor to the free spirited lifestyle many Millennials have come to enjoy.
- Poor Credit– Being young does have its downsides and one of them is having poor, injured or zero credit histories. Credit gives Millennials the ability to convince a bank they are a good lending risk. However, developing trust takes time, which is a commodity Millennials may be lacking.
- No Like-minded Social Groups– Millennials may share some characteristics such as low or no credit, lack of funds, no experience, etc. with each other. Millennials interested in investing in real estate often benefit by having a friend or group of friends to rely upon for moral or financial support.
If you are a Millennial interested in Washington DC real estate investment, you may be wondering, “How can I invest in real estate if the deck is stacked against me?” Although it may be true that younger generations are at a disadvantage, there are plenty of advantages millennials have that other generations don’t have. Here are a few things to consider as generational strengths:
- Your Generations is Motivated– Self- motivation as well as team motivation are one of the many strengths both you and other youth aged people have. You understand the importance of information sharing and teamwork. It is important for others to experience events firsthand rather than read about them via the internet.
- Technology– Your generation has a firm grip on technology. You are able to capitalize on and advance your understanding of the newest and latest innovations when it comes to technology. With the advent of social media, connecting to peers and potential business owners and clients has been much easier for your generation. With this strength and past teachings in the real estate industry, you too can become successful.
- Time is Not a Problem- Since you are considering investing in real estate at an early age you have the benefit of having plenty of time. This will give you the ability to experience and develop certain business models. Your new real estate investment continues to grow with you and as you develop a better understanding of the market and your place within it.
Obviously, your first real estate investment is going to depend entirely on your understanding of the Washington DC real estate market. For most young real estate investors, your first investment should always be well researched with the guidance of a trusted Washington DC or Northern Virginia realtor. There are plenty of great supplements out there in books, podcasts and blog posts but they cannot replace a working knowledge of the local market. However, Millennials seem to have two distinct plans of action when it comes to real estate investing.
- Live-In Flip: A great way to get yourself into the real estate market is by house flipping. Simply purchasing your first home with intentions to sell it can be complicated. If you are considering house flipping, be prepared to renovate the entire house or most of it. The best way to sell a home is by developing its appearance and location appeal. The aspect of live-in flipping stems from the realtor also dwelling in the house. Living within a potential home for sale helps can help eliminate certain costs. By reconstructing the home before putting it up for sale, you as the realtor are getting the most for your money.
- Buy Small Multifamily– Small multi-family complexes are essentially duplexes or quadplexes. Purchasing a small multifamily residence gives the realtor the option of renting part or all of the listed properties. Although this may not be entirely traditional real estate investing, it certainly has the same form of appeal. Being able to invest into a larger property, divide it up into units, and then rent them out to four separate parties who are interested, helps to maximize your investment. Make four times as much for a fraction of the cost!
For Millennials, real estate investing may prove to be as lucrative as it is challenging. Overcoming the hardships that come with investing in real estate at an early age is just the beginning of a long successful road.
Contact Gene Mock, Associate Broker, Premier Team @ 703-342-8100 or email him email@example.com to find out the best way to begin your journey into real estate investing. He will make sure you understand all aspects of buying and selling real estate now.