You’re a twenty something and are pondering the wisdom in investing in real estate. Friends tell you it’s nuts. Your parents probably think it’s a good idea. Really, though, can a twenty something invest in real estate? Is it even possible?
It is possible!
Of course it is. Let’s look at why. First, while you may not have much of a credit record, it’s less likely to be bad. If you’ve kept up on student loans, paid your credit cards on time or off and paid your other bills on time, you’re doing that adulting thing well. Well enough that you would be considered a decent risk for a mortgage.
The main problem you may come up against is lack of a down payment, or one that is big enough. Saving when you first get out on your own can be hard to do, especially when you are renting. You did put a security deposit on your rental. While counting on getting all of that back isn’t a great idea, it is something that can help. Even if you can put aside a small percentage of each paycheck it will build quickly. What can you cut out? $6 lattes? Eating out as frequently? How about getting out of that gym membership you never use? You can find ways to cut back and save money. In the long run it will be a bigger benefit.
Again, though, there are ways to work around it. If you are getting married use your wedding money towards the down payment. Ask your parents to chip in or partner with you. Work with your bank or Realtor to find creative ways to finance the purchase.
Once you have the home, a great way to make it work is to live in part of the home and rent out the other bedrooms. Your roommates can be the source of your mortgage payments. If you live with your parents rent all of the property to pay the mortgage and other expenses.
Remember that where there is a will, there is a way. Investing in real estate in your twenties is a great idea and a way to build wealth for yourself and your future.