Many young people are in a tough financial situation. If you’re a Millennial, you should consider taking advantage of real estate to bolster your financial future.
Why are Millennials Important to Real Estate?
Millennials are increasingly important to the success of the real estate industry. Good news: the future of real estate looks bright with Millennials leading the way! While there’s much talk about Millennials “killing” off industries, it’s safe to say that real estate won’t be one of those.
The latest Pew report shows that there are now more millennials than baby boomers—75.4 million millennials as compared to 74.9 million boomers, making millennials the largest generation living in America today. As the generation grows older, more of them are graduating college, starting their careers, and beginning to make the decisions that will shape their financial future.
Out of these 75.4 million millennials, around 55% of them are interested in investing in real estate! You heard that right—more than half. This figure is based on a recent Real Estate Investing Report, which asked Americans about their investment preferences. According to the same survey, most Americans did not know what type of investment actually performed the best, but they were consistently interested in real estate.
The same report seems to show that Millennials are distrustful of the stock market, and they’ve turned their attention toward real estate instead. This is probably because they were young during the worst stock market crash since the Great Depression and it made a strong impression on their generation. Regardless of the reasoning behind it, this distrust of Wall Street is clearly inspiring more young people to invest in real estate instead.
There are other reasons why real estate might be more appealing to young people. Real estate is more tangible than stocks. You can physically see where your money is going as opposed to stocks, which can be difficult to quantify.
Plus, many young people are inspired by HGTV shows like “Flip or Flop.” These TV shows feature Millennial-aged couples making significant money by simply improving older, rundown homes.
According to a recent Forbes article, Millennials are justified in their interest in the real estate industry.
“Real estate may flourish with millennials leading the charge. While older generations may be more interested in downsizing, millennials are having children and growing in their careers. Buying a home is the next logical step. With positive returns potentially on the horizon, millennials are on the right track. The data says real estate has the capacity to be the best investment, and millennials are on board.”
It’s a bright future for real estate, indeed. Now, seasoned real estate investors need to help pave the way by providing their knowledge and support.
How Millennials Can Get Started Investing in Real Estate
Are you a millennial looking to make your first investment? Here are some of our tips for getting started:
Save Up— This is the biggest hurdle for many young people. It can, and should, begin long before you even make the leap into real estate. If you just graduated from college, you’re probably paying off your student loans and paying rent. Nevertheless, it’s a good idea live as simply as possible and save up a portion of your paycheck toward your future real estate goals. The earlier you start, the better! Real estate often requires a sizable chunk of money to get started. While you will probably end up lending, it is very helpful to show consistent proof of saving when you’re looking for a lender.
Establish a credit score— If you don’t have a good credit score, you’ll have trouble getting started in real estate. Many young people don’t have any credit at all. Work on building up a good credit score. Focus on paying off your loans. This will give you an advantage when it comes time to take out a loan on your first property.
Study— While you’re working on saving up money and establishing your credit score, you can spend your free time learning about the business. Read books, search the Internet, talk to people who have been there and done it. If you learned any studying skills in college, put them to good use! If you’re going to be successful, you’re going to have to have real estate knowledge and a smart plan in place ahead of time.
Enlist the Help of Technology— One of the biggest things that keeps people out of real estate investing is a perception of difficulty. The Real Estate Investor Forum is only one of many, many resources that use the power of technology to make it easier for you to invest in real estate! There are so many other helpful videos, blogs, online courses, and softwares that are designed to assist you.
Enlist the Help of Experienced Investors— Skim through any article about getting into real estate, and they will all probably have a variation of this advice. That’s because it’s so important! You might feel the need to do it all on your own, but if you can find an experienced real estate investor to mentor and guide you through the process, you’ll be much better off. Bonus if the person has been investing in your local area for a long time. They’ll have specific market knowledge that can only be gained through years of hands-on experience.
Buy Your First Investment— When you’ve completed the above steps, it’s time to make the leap and just do it. Your first investment probably won’t be anything fancy. It probably won’t be in your dream neighborhood. But you can live there and save on rent money while you work towards your next venture. When it’s time to move on, you can start bringing in the money by renting out your first home—and voila! You’re a real estate investor.