Real estate one of the more promising long-term investments. One reason is the real estate market is generally less susceptible to the volatile ups and downs of high-risk stocks or emerging strategies like cryptocurrency.
That said, it can be a little intimidating to jump into owning land, becoming a landlord or flipping houses, especially if you are part of a generation saddled with student debt and a shaky economy.
By looking at the challenges you need to overcome and the investment options at your disposal, there's lots of opportunity to build your investment portfolio.
If you're in your 30s, interested in real estate investing in your 30s and aren't quite sure how to begin, this article is for you.
There's a lot going on for people in their 20s, but people in their 30s are experiencing a lot of change too. Some of the challenges to overcome in your 30s include:
You likely spent at least some time in your 20s attending college. In your 30s, all the money you borrowed to pay for that expense is due. Reducing your debt load is a good and important thing to be doing, but it takes time.
Many people in their 30s choose to get married and start a family. These are wonderful things, but also come at a cost. Weddings can be expensive, medical bills can add up and the cost of raising kids isn't going down either. Putting aside extra money for investment purposes on top of these normal expenses can be a challenge.
For some people, it can take until their 30s (or later) to develop good habits and awareness around tracking income and expenses. Most financial planners suggest building an emergency fund to cover unexpected expenses or a loss of income. These things take time to develop, too.
People in their 30s should get started on estate planning, signing off on life insurance and the like. All of these are good and necessary things and are definitely recommended before venturing into the real estate investment world. So before you get started, make sure you have these things covered first.
Once you have these bases covered, there are several ways to get into real estate investing. Some ways are easier than others, but let's explore a few options.
By the time you are 30, you might have saved up enough money to buy your own home. One of the easiest ways to get involved in real estate investing is to find a roommate or renter.
Whether you're sharing your entire home with a roommate, renting out your basement or even just a bedroom, this is easy money that can offset your mortgage expense. An extra perk here is that you don't need to hire a property manager because you're already on site.
Another way to get involved in real estate investing is through flipping properties. You've probably seen how it's done on HGTV, but be assured, it's NOT as easy as it looks!
Flipping properties requires a good understanding of the housing market so you can find a property that might be undervalued. Flipping also requires handyman skills or access to a contractor who can do a good job for a reasonable price.
If you're pursuing this path, time is a precious commodity, as you'll be making mortgage payments while you're renovating. Try and get it done quickly.
Depending on where you live, short-term rental properties can be a great investment opportunity. Tourists and vacationers are often on the hunt for weekend getaway accommodations. Making $500 a weekend on condo rentals is a great way to go. With this route toward real estate investing, Airbnb or Vrbo can be your investing partner by finding the tenants and handling the booking.
Finally, real estate investment trusts (REITs) are a solid option for young investors just getting started without a huge nest eg. REITs offer the benefit of investing in property without the weight and management responsibilities of private ownership.
Whether it's a collection of residential properties, commercial warehouses, apartment complexes or even large data centers, buying into a REIT gives you access to returns you might not see as an individual investor.
Interested in learning more? Check out our article REIT Investment Strategies: A Guide For The Everyday Investor .
In the end, there are a few obstacles and precautions to take when it comes to real estate investing in your 30s. On the flip side though, there are some great ways to make it happen if you're willing to start slow and build up some equity.
The longer you own an investment property, the better investment it becomes. If you can take care of eliminating debt and prepare yourself for a worst case scenario, definitely try and get in the game early and watch your money work for you.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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