It’s no secret that investing in real estate is a great way to generate passive income and increase your wealth. Today, I want to share four strategies so that you can start investing in real estate, particularly if you are in your 20s and 30s.
1. House hacking. This is a great opportunity because most people’s first investment in real estate is their own primary residence. The basic concept of house hacking is that you buy a property and leverage some part of the property to create rental income to offset your housing costs. For example, you could buy a 2-bedroom condo and rent out a room. You could also buy a duplex and live in one side while renting out the other. That way, you get to experience being a landlord and property management while offsetting your housing costs.
2. Short-term rentals. You can purchase a property in hot tourist areas or vacation spots. Charging a premium during peak seasons will allow you to offset the cost of the down season. You can also use Airbnb to get your property in front of potential visitors. Just make sure you check for any zoning restrictions on Airbnb in your area.
3. Real estate investment trusts. If being a landlord is not your style, consider investing in an REIT. Real estate investment trusts are basically like mutual funds; a group of people pools their money in order to buy real estate assets together. This way, you can be a stakeholder and invest in the real estate market without the full responsibility of owning one asset yourself. If you are interested in REITs, I recommend that you check in with a financial advisor first.
4. Financial reserves. Do you have financial reserves so that you can go a month without rent? Do you have enough money to maintain the property? If the washing machine, refrigerator, or air conditioner goes out, you need to be able to make those repairs. You need reserves to maintain the property in order to get a good return on your investment.
These tips and strategies will help you find investment opportunities in your 20s, 30s, and beyond. Just give me a call or send me an email if you have any questions. I would be happy to help you!