While purchasing a home may seem in the distant future for those just getting out of college or starting their first job, it may be closer than you think. Or, should be sooner than you think. It turns out; there may be several benefits to investing in real estate at a young age. Let’s take a look at some of the reasons your first home should be an investment property:
Young & Free
Being young means fewer responsibilities, fewer people to worry about, and more of doing what you want when you want to do it. All of these are great until you start thinking about your future and all the plans you have. Why not get started early? Start saving money and building credit – both of which are easier when you have fewer responsibilities and obligations. While you won’t be purchasing a property right away, thinking about these things while you are young will guide you down the path to becoming a homeowner sooner than you think.
Real Estate is Relatively Cheap
While home prices are on the rise, buying a home is still cheaper than renting – at least in the long run. And, there are bargains! If you are looking for a home as an investment property, give distressed sales a try. Distressed sales are homes that have foreclosed, and the bank is selling at a reduced rate to get rid of them. These homes are typically a steal, and make for a great investment property – as all the property can do is increase in value, considering you got it for less than market value. But, before buying, determine how much house you can afford. Find out just how much you can afford here.
You know what’s great about an investment property? Once you purchase the property and secure tenants, it makes for a great second income. This second income can be used to pay credit card debt, loan payments, etc.
For those who think they can’t become a homeowner because they can’t afford the industry standard down payment of 20 percent, think again…because there is another option. FHA loans give people who don’t have high credit or much money saved up a way to become homeowners. FHA loans may allow you to purchase an investment property with a much lower down payment – usually around 3.5% of the purchase price. However, there is a stipulation, FHA loans require that you make the property you buy your primary residence. If you’re thinking about buying the property as an investment, there may be a way around this caveat – purchase a property with up to three or four rental units and name one your primary residence. Have questions? Contact TALK Property Management for more information.
Demographics in America are changing – that’s no secret or surprise. According to the Research Institute for Housing America, immigrant homeownership is expected to account for 36 percent of housing growth over the next decade. Why is this? Immigrants are showing strong desires to become homeowners. Be proactive and purchase a home to capitalize on this expected housing growth. Don’t wait and miss out on the opportunity to watch your investment property skyrocket in value.
Buying an investment property when you’re young could be one of the best decisions of your life. It could mean reaching your financial goals sooner than you expected.
Do you have any questions about investing in the Austin area? Give TALK Property Management a call anytime; we would be happy to provide guidance.