Real estate is one of those topics that can scare off a lot of people for several reasons. First off, it’s expensive. Second, it can be risky. You’re essentially putting thousands of dollars towards something that can be very valuable, but that’s not always guaranteed. If you’re wondering what is the best age to start considering investing in real estate, we can’t give you an exact number. However, if investing is something you want to do in the foreseeable future, we can help you decide when the right time is.
You aren’t in a lot of debt
First comes first. Before investing in something as expensive and as risky as real estate, you’ll want to assess how much debt you’re in. Whether you have student loans, an expensive car payment, credit card debt, or even a mortgage, you’ll want to pay those off as much as possible before investing in real estate. Many real estate investment strategies will involve taking out mortgages, which will put you in more debt.
Naturally, younger adults in the country, mostly those who went to college, will have more debt than older, more established people. However, if you’re younger and in debt, you can make smart financial choices now so that down the road, you can also invest in real estate.
You are financially stable and have good credit
Before you go ahead and take financial risks like investing in real estate, take a step back and evaluate where you are financially. Do you have a good credit score? Are you financially sound? When you invest, you’re putting money on the line. Before you make any big financial moves such as this, make sure you have savings, a low debt-to-income ratio, and a steady enough income where that if something were to fall through, you would be okay.
If you’re at an age right now where you’re not as well-off financially as you’d like to be, start making choices that will benefit your financial wellness down the road. Create budgets, save up, and pay off debt. In just a few years, you’ll feel more comfortable investing in real estate.
You have the time to put in the work
Real estate investing isn’t a “buy a house and you’re done” sort of deal. You’re going to have to put time and energy into the investment after you purchase the home or property. If you decide to fix the house up and resell it, you’re obviously going to need to either hire a crew to fix the house up for you or do it on your own. Not planning on going the “fixer-upper” route? Renting the house out, which is another alternative, also takes work. As a landlord, you’ll have a list of responsibilities.
The time and energy that you spend in investing doesn’t go to waste, though. Taking the time to take care of the property you purchased is only going to work out better for you in the long run. Don’t have the extra time right now? Reassess down the road when you do.
Like we mentioned before, we don’t have an exact number when it comes to the best age to invest in real estate. However, we do know that it’s based on your financial wellness, how much debt you have, and how much time you have to put towards your investment. We hope you found this post helpful and will continue to stop back to Budget and Invest for similar posts.