Real Estate Investing: A Smart Strategy for Millennials

Are you at an age where ideas like equity, assets, financial stability, and diversification are suddenly coming into focus? There’s a good chance you’re a Millennial. 

And it makes sense that those “adulting” concepts are buzzing around. You’re at a point in life that necessitates a future-forward vision. 

For many Millennials, real estate investing is already a part of that vision. Data shows that in 2021, 61% of 30-44-year-olds in the US owned homes compared to only 29% of 18-29-year-olds.  

If you’re a first time home buyer ready to take the plunge into real estate investing, this is an exciting time. It can also be challenging. Economic hurdles, market fluctuations, and the pressure of making the right financial moves can make it stressful. But fear not – the benefits are handsome. 

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Understanding Real Estate Investing 

Something many Millennials don’t know – real estate is a diverse investment strategy offering a wide range of opportunities. It can be so much more than buying a home to settle down in. It all depends on your present situation and long-term goals. 

Establishing a sturdy financial foundation is a big concern for Millennials. They’re also thinking about moving into the family home of their dreams. Becoming a first time home buyer by investing in real estate is a logical first step. 

However, there’s a lot to understand. There are different approaches to real estate investing and all can lead to financial security. Common strategies include: 

  • Flipping homes
  • Becoming a landlord and renting a home
  • Investing in commercial real estate 
  • Real estate investment trusts (REITs) 

Before diving into an investment strategy, it’s important to know the challenges involved. For example, securing financing is essential, regardless of the level of investment you’ve decided on. You’ll also need to consider market volatility and how it affects property values in your area. 

It’s also important to realize and address misconceptions. For example, many Millennials think getting into house flipping results in instant wealth or that property ownership is a mandatory part of real estate investing. If you’re worried about your lack of experience, work with a local real estate agent and mortgage broker and use their knowledge to your advantage. 

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Benefits of Real Estate Investment for Millennials 

In 2021, Millennials were responsible for 43% of all home purchases in the US. There’s a reason. Real estate investing offers both short and long-term benefits.

Building equity is a major advantage to homeownership. Doing so increases the profit you’ll make if you sell your home down the road. Equity also boosts your net worth. 

If you’re a first time home buyer, putting a healthy down payment on property will jumpstart your equity. Making renovations and upgrades also increases your equity and helps lead to the appreciation of your investment. 

You can also harness long-term benefits through rental property. Starting small with one home and purchasing others when you’re ready can set yourself up for lifetime rental income. This type of real estate investing comes with tax benefits through the deduction of property taxes, mortgage interest, and home depreciation. 

Finally, real estate offers you a way to diversify your portfolio. By investing in property and real estate investment trusts (REITs), you lower your overall portfolio risk and increase your worth.

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The Role of Mortgage Brokers

As a first time home buyer starting your real estate investing journey, you’ll need a few things. First, it’s important to have an idea of the type of home you want and its location. Second, you need an experienced mortgage broker you can trust. 

Mortgage brokers help secure loans that best suit a homebuyer’s needs. They understand the local real estate market and have a deep understanding of the complex process of buying a home. A diligent mortgage broker can do a lot to alleviate stress for a first time home buyer. 

Services a mortgage broker provides include: 

  • Helping you navigate your potential buying capacity based on your financial situation
  • Deciphering legalities connected to the home buying process
  • Advising you on the best mortgage loan 
  • Assisting with application paperwork 
  • Securing the best possible mortgage rate for your loan
  • Helping you understand the terms of your loan

Choosing the best mortgage for your situation is a critical decision. It’s important to work with someone with plenty of experience in your area. They should also provide a variety of loan solutions and other resources like closing cost assistance. 

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Timing – A Crucial Factor in Real Estate Investing

Whether you’re a first time home buyer or own property and want to sell, timing is everything. Real estate markets are always in flux, which means you need to time your investment strategy to ensure a favorable financial outcome. 

Let’s drill down into some of the moving parts of a well-timed investment:

  • Interest rates fluctuate, and buying when they’re low can reduce mortgage costs. 
  • Selling when demand is high and supply is low can help you get a good price for your home.
  • Investing in real estate in areas experiencing positive development and growth will lead to higher property values. 
  • Researching seasonal real estate market shifts in your area will inform your decision to buy or sell. 
  • Making investments when your financial situation is favorable will result in a secure future. 

Millennials working to set themselves up for long-term financial success should focus on their return on investment (ROI). Timing is a crucial element in this type of strategic decision-making, and experienced mortgage brokers can offer game-changing insights that will lead to profitable outcomes. 

If timing your real estate investment for success feels overwhelming, leaning on the expertise of a mortgage broker is your best bet. For example, our team can efficiently synchronize each stage of the process, ensuring a hassle-free home-buying experience. 

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The First Steps of Successful Real Estate Investing

If you’re a Millennial with the financial stability to start investing, there are plenty of opportunities on the horizon. It can be a stressful and even frightening decision, but the long-term benefits are worth it. 

Making your first investment requires jumping into the deep end, but there are smart ways to prepare: 

  • Consider your long-term goals before creating a strategy. Do you want to rent property or build home appreciation?
  • Evaluate your financial status (credit score, savings, etc.) and decide what you can afford. 
  • Research the real estate market in your region and choose the best location and time to buy. 
  • Perform extensive research on every property you consider. 
  • Work with a local real estate agent to get valuable insights that will inform your decision. 
  • Secure financing with an experienced mortgage broker who can get you the most attractive rates possible. 

Due diligence is the best path to successful real estate investing. If you’re a first time home buyer, you’ll enjoy long-term stability through appreciation and the comfort of living in a home you love. If you plan on renting or flipping homes, you can expect ongoing profits as a result of smart planning and hard work. 

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Start Your Journey as a First Time Home Buyer 

As a Millennial, you’re the perfect age to get into the exciting world of real estate. You’re old enough to have built a solid financial bedrock and young enough to take your future in whichever direction you choose. 

If you’re a first time home buyer, the Moreira Team will ensure a smooth transition into homeownership. We’ll secure a mortgage rate and help decide which loan is right for you. 

Get a quote today!