If you’re young and you’re looking to purchase a new home to live in, maybe you should consider turning your first home into an investment property. While most people wait until after they’ve bought their first or second home to begin investing in real estate, you could start much sooner than you think. We’ll explain why jumping into the real estate investing game might be a good idea.
Many people, especially in the wake of the mortgage crisis, have found themselves wondering: “Is buying a house a good investment?” One way to ease your worries about whether buying a house will pay off is by renting out the first home you buy. By turning your home into an investment property, you can leverage your less-than-perfect credit, less-than-perfect lifestyle and limited responsibilities into an investment. All it takes is a little bit of smarts and real estate shrewdness.
The idea of making your first home an investment goes against the general notions of personal finance. In fact it goes against how most people approach post-college life. The typical financial timeline for your average American adult might look like this:
- First Job
- First rental
- Second/third rental
- Starter Home
- Second Home
There’s nothing wrong with following that timeline, since it can give you plenty of time to build credit, save money and enjoy being young. But if you’re a 22-year-old college graduate with a solid job (good for you), waiting until you’re well into your 30s or 40s to start investing might not be wise.
Here are five reasons why you should entertain the idea of investing in real estate while you’re still young.
1. You’re Young
2. Real Estate Is Cheap
3. You’ll have Another Source of Income
4. FHA Loans
5. Changing Demographics