Start Investing in Real Estate — 6 Tips for Millennials

In all likelihood, millennials will soon age into becoming the largest group of homeowners — but for many looking to start investing in real estate, the homeownership process can feel daunting. The good news is there are plenty of ways to get started, and not all of them require buying a property.

Whether you’re looking to start investing in real estate or want to make it a full-time job, here are some tips millennials can use to get started.

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If You Can Afford to Buy a Property, Do it Sooner
Although you shouldn’t jump the gun on a buying decision, if your plan is to invest in physical real estate properties, the sooner you start, the better your chance of earning higher returns on your investment.

Why? Well, when you invest at a younger age, you have more time to grow your wealth, reinvest it and build equity over a longer period of time. So, if you’re ready to get started, the best time to start investing in real estate is now.

Figure Out Why You Want to Invest
If you don’t set goals and understand the reasons you’d like to start investing in real estate, you may find it harder to stick with your plans. For example, many millennials are straddled with debt — from student loans to credit cards — and their biggest goal is to become debt-free. If that resonates with you and is a primary driver behind your motivation to invest in real estate, keep that in mind as you begin the process.

Write down your reasons, repeat them out loud and tell colleagues, friends and family — whatever you need to do to hold yourself accountable. Be sure to revisit your reasoning and always keep it in the back of your mind before pursuing new real estate investment opportunities to make sure they’re aligned with your goals.

Research Different Real Estate Options
Most millennials want a meaningful life and aren’t content spending their time — at work or otherwise — on projects that don’t matter to them. The good news is millennials can utilize this passion when they start investing in real estate.

There are many ways to get started, from passive investing to actively managing properties. And each type offers a way for millennials to find more purpose in their lives, while also building their wealth.

For example, if you’re not interested in buying properties, you might instead invest in real estate companies or properties that prioritize environmental, social, and corporate governance (ESG) values. You can also talk to a financial planner or real estate investor to learn more about companies you can feel good investing in.

If you want to make a difference in your community, investing in properties and offering affordable rental homes or other spaces may be a good way to give back, while also helping you earn additional income.

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Don’t Stress About Raising Capital
Millennials may also be overwhelmed by the prospect of securing financing for a real estate investment property, particularly since less than half of millennials owned a home of their own in 2020. The process can feel overwhelming and down payments can seem impossible to pull together.

Luckily, there are first-time home-buying programs, government-backed mortgage options, and other state and local credits millennials can take advantage of to make borrowing money for their first property easier. If you need additional funds for a real estate project, you might also consider peer-to-peer lending as a financing option, as well as turning to family, friends, and others in your network to invest alongside you.

Leverage Technology
When it comes to the digital world, millennials reign supreme. This age group grew up with the internet and developed alongside it. And thanks to technology, investing is even easier — whether you’re searching for properties, applying for homes or rental units, or investing in real estate investment trusts (REITs), crowdfunding projects, or other real estate funds.

Figure out how you want to start investing in real estate and let technology help streamline the process. There’s even artificial intelligence available to help scour investments to look for the best opportunities.

And don’t forget to use social media platforms to get connected with real estate investors and other experts in your area. Having a network of advisors you can lean on is crucial.

Find an Experienced Agent
Millennials are very much self-starters who may consider skipping a real estate agent altogether. But trusted realtors and brokers can help you find deals you might not otherwise be aware of — and can serve as a valuable resource on your investing journey