For 31% of Americans, the preferred method of long-term investment is real estate, according to a nationwide Bankrate survey. The generation that’s most interested in real estate is Millennials, with 36% of surveyed Millennials naming real estate as their top choice for a long-term investment. Many of them face adversity on that path. Apartment List’s report states that 63% of Millennials looking to buy a home don’t have enough savings for a down payment, and the pandemic hasn’t nudged the market in their favor—quite the contrary.
Still, investing in real estate is as sensible a move as it’s ever been. “It’s a well-established fact that real estate can be a solid long-term investment,” says Elevation Realty Networks Dylan Suitor. “That’s not the only way to invest into real estate, of course; there are short-term options, too.”
Realistic Investment Plans
An important sign that real estate investing is becoming an option is when wishful thinking gives way to building realistic investment plans. Every investor should have an entry and exit strategy for every property. To get there, however, they need to decide what kind of investment they’re willing to make, depending on the goals they have.
Do they have some money they want to turn around relatively quickly and don’t mind doing some work? Flipping a house or two might be great. “Individuals or families looking for long-term investments, and even ways to earn a passive income and grow their generational wealth, might instead look into apartment buildings,” says Dylan Suitor.
Buying a whole building on their own can be an almost impossible task, and a realistic investment plan should have a big chunk of it devoted to financing. If, on the other hand, financing is a problem, there are different ways to start investing with smaller sums; crowdfunding or REITs can be good options.
Financial Stability and Buyers’ Market
Every investment carries with itself some risk, and every investor has to be aware of their ability to tolerate risks. However, investing in a way like a gambler would bet their last dime is irresponsible. Investors should have their finances in order at the very least before they start thinking about investing. Ideally, the investment will be only one part of their portfolio.
Having a good market on one’s side isn’t just a boon, it’s a bona fide sign that the times are good to get into it. Even in times when the market on the national or state level might seem like it’s a seller’s market—that was one of the effects of the pandemic—there might be local markets or niches that are more favorable to the buyer.
Finding a good realtor might not be a good sign to start investing but finding someone who would be willing to go the extra mile and maybe even become a mentor is an opportunity that doesn’t come too often. “It’s always easier to go into it with someone you trust and share a vision with,” explains Dylan Suitor. “If it just so happens that the person in question is an experienced investor, it’s like a sign to at least give investing in real estate a good thought.”
