Increasing property prices are locking out first home buyers, so it’s no wonder parents may be wondering how they can help get their kids on to the property ladder.
Compared to other assets like stocks or bonds, commercial or residential property is tactile, i.e. bricks and mortar.
Plus, over time, real estate is proven a worthy investment.
Even with the property market booms and busts and economic volatility, real estate in the western world doubles in value every seven to ten years. Plus, when you invest in a rental property, it’s not just the property value you’re interested in. There is the weekly rent.
It’s often described as passive income, and it’s not really passive as either you or your property manager needs to look after the property and its tenants. Plus, the rent needs to pay the mortgage repayments, expenses and provide a profit.
Knowing our primary needs include shelter, housing is always in demand both for ownership and renting.
Starting as a first-time property investor is made easier with real estate firms specialising in various investment opportunities. First, however, you need to know what you’re looking for and that the property aligns with your goals of providing for your family.
When To Start Investing
Earlier is better. However, some people would say it’s never too late to invest in property, particularly if you’re doing it for your children’s gain, not your own.
Don’t rusPlease don’t rush into it.d do research. Instead, join property discussion forums like PropertyTalk, and ask questions to get feedback from seasoned property investors.
Types of Real Property Investments
Even if you choose to use a property manager, investing in an area you know well and ideally is within reach is the perfect starting point for your first rental property. Residential property is easier to get into, and you need less deposit. However, some people prefer commercial property as there is less ongoing interaction with the leaseholders due to longer than standard residential rental agreements.
Rental properties such as apartments and student housing are both attractive first-time investments. The lower price tag means you can get your rental into your portfolio and learn before making your next move.
In buying rentals, ask yourself, what will you regret not buying 20 years from now? This can give you an insight as to how strategic investments can pay off in due time.
A balanced portfolio is the lowest risk strategy, insofar as the type of property goes, so make sure you secure different types of accommodation, including a unit or apartment, a terraced flat, terraced house and also a detached home too.
Location is paramount, so make sure you know the demand for rentals in the areas that have low crime, jobs, schools and great transport to shops and entertainment.
Aside from residential properties, you can also invest in commercial real estate without having to shell out a lot of funds or step onto the property. Instead, you can use online real estate platforms to select prime rental locations. Crowdfunding is also a popular option. It pools your money and other investors to buy buildings, malls, or warehouses, which can pay you dividends yearly.
While you’re saving up for your child’s future by buying rentals or other real estate properties, it’s probably best to wait until they’re old enough to understand and participate in your venture.
Take time to involve them in your investment by explaining concepts such as income, expense, collection and appreciation so they understand how they can earn money. For example, if you’re managing the rentals, you could ask them to help collect or manage tenants.
However, understanding the numbers of how investing in property makes your money (deposit) make money is the focus so they can one day take over the property portfolio and ideally add to it.