Lately, we have noticed a trend regarding investment property in the Perth market. We are seeing people under the age of 25 who are already asking us how they can get involved in securing their financial futures. Some of them have been as young as 18 years of age. We are always excited for anyone who decides to start early, but they do have a few special challenges that older investors don’t.
I started my investing at age 21 and it meant I had more hurdles to jump over. The sooner you can start the real learning you only get from taking action, the better off you will be in the future.
Here are some tips for young investors to help you get started.
Is Property the Right Investment Vehicle for You?
At 18-22, you will be going through a lot of life changes. While you may think they are predictable, many are not. If you decide to move out of your parents’ home, that will cost money. If you are a student, you will be working only part time with a modest income. You may start or stop school or work at any time.
You may decide that you want to get away from it all for a year or so. These are also the busiest years of your life socially, as you and your friends will have many different life events happening. Property investment requires that you maintain a certain level of discipline and focus. If you cannot reasonably expect that out of yourself yet, you may want to explore other investments, such as shares or managed funds.
Buy with Your Head, Not Your Heart
Younger investors have a tendency to “fall in love” with properties based on appearance or because they would like to live there themselves. Unfortunately for many, that is not how property investing works. Property investing has to be done by the numbers.
Most lenders want to see a minimum of a year’s worth of consistent savings before they will trust you to repay your loan. Pay special attention to first-home saver accounts, which are eligible for government contributions that are determined by how much you contribute.
Friends and Parents
We saved the best tip for last. For many young would-be investors, teaming up with friends or parents can be the difference between securing funding and being denied entry to the market.
If you want to know more about investing, call Investors Edge: 1300 472 427.