6 Strategies For Investing In Real Estate Before Turning 21
It’s a common perception that you need to be older, perhaps well into your 30s or even 40s, to start investing in real estate. However, with the right strategies and approach, you can begin much earlier – even before you turn 21. Here are six ways to get started with real estate investment in Australia.
Education
You’re never too young to learn about real estate. This journey begins with educating yourself on the basics. Start by understanding the Australian real estate market, the types of properties available, real estate laws, and the economic factors that influence property values. Read books, attend seminars, or even consider enrolling in real estate courses. Platforms like Coursera, Udemy, or local universities offer courses that can provide a firm foundation.
Saving and Budgeting
Getting into real estate requires capital. Begin by saving a portion of your income, whether it’s from a part-time job, allowance, or other sources. Create a budget and stick to it, ensuring that you save consistently. Also, consider opening a high-yield savings account or investment account to grow your savings over time.
Building Credit
Having a good credit score is essential for securing loans and mortgages. To build your credit history, consider getting a credit card, but be mindful of your spending. Use it for necessary expenses and always pay off the balance on time. You could also consider becoming an authorised user on a parent’s card to benefit from their good credit history.
Real Estate Investment Trusts (REITs)
If you don’t have enough capital to buy property outright, consider investing in Real Estate Investment Trusts (REITs). These are companies that own income-generating real estate and allow investors to buy shares. This gives you exposure to the real estate market without the need to manage property yourself.
Crowdfunding
Real estate crowdfunding platforms allow you to invest in properties with a small amount of money. You pool funds with other investors to buy a property, and earn returns proportionate to your investment. Crowdfunding can be a great way to get started with property investment without needing a substantial upfront cost.
Wholesaling
Wholesaling involves signing a contract to buy a property, then selling that contract to another buyer before the sale is complete.
This involves a process where the wholesaler secures a contract from a property’s seller and then transfers that contract to an investor.
The initial step in this strategy includes identifying and securing a contract on an undervalued property. Typically, wholesalers search for properties in distress, which are often priced lower than their market value.
This doesn’t require a large capital, but does require a deep understanding of the market to identify underpriced properties. It’s a more advanced strategy, but with the right knowledge and network, it can be a viable way to get into real estate.
Conclusion
Real estate investment isn’t restricted to older adults with a wealth of capital. Even as a young person not yet 21, you can start building a successful real estate portfolio with the right approach and strategies.
Start by educating yourself, saving, building credit, and exploring alternatives to direct property ownership like REITs, crowdfunding, and wholesaling.
Remember, it’s about laying a strong foundation and making informed decisions, not rushing to buy the first property you see. With perseverance and smart strategies, you can turn real estate investment into a fruitful venture.