Did you know that most millionaires made their money through real estate investing?
There is a common misconception that only retirees and wealthy individuals are property investors. Thus, many young aspiring business people don’t consider real estate investing until they reach their 30’s or 40’s. However, becoming a real estate investor while in your early 20’s could possibly be the best decision you can make to get ahead and become a successful real estate investor!
Real estate investing might seem confusing at first, but if you know how to get started at a young age, it’ll open up many doors and opportunities such as financial security and early retirement. In this guide, we explain why it’s a smart idea to buy your first investment property while in your 20’s and how smart property investors search for and find the best rental properties for successful real estate investing.
Why Start Real Estate Investing in Your 20’s?
Benefit From Cash Flow
Besides being a safe investment environment, the real estate business is considered one of the best ways to make money and build wealth over the medium and long-term. The best reason why 20-somethings should start real estate investing is the immediate return they’ll receive. Moreover, there are many strategies for beginner property investors to make money.
For example, you can buy an investment property and rent it out. Doing so gives you a reliable and steady source of rental income each month on top of your regular salary. Other ways to make money in real estate investing are through flipping houses, real estate wholesaling, investing your money in a real estate investment trust, and more.
Related: Why Positive Cash Flow Is a Must with Income Properties
Whichever way you decide to start real estate investing, you’ll receive cash flow (money you make every month after all expenses are paid). While some would invest for appreciation, smart property investors invest for cash flow. Young property investors can use cash flow to pay down student loans, save for retirement, or use as down payment for another rental property. Therefore, the sooner you buy your first rental property, the sooner you can take advantage of cash flow.
Appreciation Takes Time
While real estate investing offers a lot of benefits, you can’t become a successful real estate investor and own multiple rental properties within a few years. As mentioned, some property investors invest for appreciation, which is not a bad approach. Appreciation is the increase of the investment property’s value over time. This means a real estate investor can sell his/her rental property in the future for a higher price than the initial investment, making a profit.
Related: Real Estate Investing for Positive Cash Flow vs. Appreciation
This is another way to make money in real estate investing. However, it takes time to actually see your profits. Real estate experts believe that in order to benefit from appreciation, property investors must hold their investment properties for at least 10 years in order for it to gain value. The longer you hold a rental property, the better return on investment you can expect to receive. Thus, if you’re thinking real estate investing for appreciation is the way to go, then it’s best to find and buy a rental property in your twenties so you can make money now, sell it in the future and enjoy your profits!
Did you know Mashvisor helps property investors find the best investment properties in any city and neighborhood across the US? To start looking for and analyzing the best rental properties in your city and neighborhood of choice, click here.
It Doesn’t Require a Large Initial Investment
One thing that concerns beginner property investors is financing the purchase of investment properties. As a beginner real estate investor in your early 20’s, you may not have a large amount of money that you use for real estate investing. However, you’d be happy to hear that you can buy an investment property with little or even no money down.
The most common way to achieve this is through a traditional mortgage. A real estate investor can also borrow from private money and hard money lenders, start real estate investing with a partner, crowdfunding, and owner financing. These methods of financing an investment property are among the best for beginner property investors. Make sure you understand what each method requires and choose which one to go for depending on your financial abilities and goals as a real estate investor.
Related: Investment Property Financing: Your Options as a Beginner Real Estate Investor
Real Estate Investing Tools to Help You Get Started
Thanks to today’s technologies, property investors now have access to tools for a more profitable real estate investing experience, the best of which is right at the tip of your fingers! At Mashvisor, we understand the difficulties a real estate investor has to face to find the right rental property and we offer the solution. Property investors using our platform find the best rental properties in 15 minutes with the help of these tools:
#1 Investment Property Finder
This search tool is heavily customizable to allow you to search for investment properties based on specific criteria and using different filters. For example, you filter your search results to find rental properties (both traditional and Airbnb) with a certain price range, in a certain neighborhood, or with a certain cash on cash return. This will help you easily compare different rental properties in the same location to determine which one yields the highest return on investment.
This real estate investing tool comes with a heat map function that allows property investors to find rental properties much faster using visual cues. For example, you can set the heat map to indicate the areas with the highest traditional rental income, and the heat map will highlight areas as hot or cold for this feature. This will make it easier to compare different locations and see which one has more profitability for real estate investing.
Related: How to Find Investment Properties Using a Property Finder Tool
#2 Investment Property Calculator
This is another versatile tool that allows property investors to calculate the different values related to an investment property. The main values that Mashvisor’s investment property calculator estimates are the cash on cash return, cap rate, rental income, and Airbnb occupancy rate. These values are important in real estate investing to analyze investment properties, determine the optimal rental strategy (traditional vs. Airbnb), and decide whether or not it’s a smart decision to invest.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
To Sum Up
Real estate investing is a journey that takes time and ambition to make it work – the earlier you start, the earlier you’ll make money and have a successful career as a real estate investor. Many successful property investors today started out while in their 20’s, so why not follow their footsteps and start enjoying the benefits of owning a rental property? Be smart and sign up with Mashvisor to use the best tools to search for and find your first investment property in just 15 minutes!
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
Are you in your twenties and considering real estate investing? Let us know in the comments why you think this is a good investment or not– we’d love to know!