You’ve made the decision; you’ve decided to start a real estate career. You’re going to start building the foundation of your financial future, and gently (or not-so-gently) transition away from employee life, and steer toward an entrepreneurial career.
But doubt creeps in. If you’re in your 20s, you figure you must be too young to start a real estate career. Or, if you’re (somewhat) closer to retirement age, you figure you’ve missed your chance to become an investor.
Starting a real estate investing career can be a sound, financial decision — at any age — as long as you’re armed with enough knowledge to make a sensible and practical plan for your investing future. Here’s a quick guide to help you make an informed decision about your quest to start a real estate career, no matter how many candles happen to be on your birthday cake.
The Inside Scoop On How To Start A Real Estate Career
Real Estate Investing In Your 20s
There’s no substitute for getting an early start. That said,there maybe no better way to get an early, financial start than getting started in real estate in your 20s. That’s because of simple math; smart financial decisions early on can pay off over years with even a modest return on investment. That’s because you have the time, and patience, to slowly build assets and watch them appreciate.
But many challenges facing would-be real estate investors are exacerbated for someone in their 20s. Securing credit (always an obstacle to real estate investors) is even more problematic for younger demographics. Limited work experience, not much savings and an incomplete credit history all make it more difficult for those in their 20s.
There can also be the hindrance of a limited professional network with which to leverage; while you’ve been hitting the books in class, your would-be competitors have been hitting the pavement to find wholesaling and rehabbing deals.
Any number of different types of real estate investing deals — rentals, wholesaling, or rehabbing — can make a great addition to a twenty-something real estate investor’s portfolio. Of those mentioned, wholesaling — in which you secure a purchase contract on a property but then assign that contract to another investor — seems ideally suited for an investor in their 20s.
With a limited capital requirement, and plenty of opportunities to put that extra time and energy to good use, wholesaling (or any other form of investing) can be a great building block for a long, successful real estate investing career.
Real Estate Investing In Your 30s And 40s
This is a time in your life when, typically, you’re at the height of your earning power, and breadth of your professional network, but you also have more responsibility, more anxieties and far more bills.
Despite the amount of money they may earn, many thirty- and forty-year olds are not making progress on their financial goals. As detailed by Wall Street Daily, in a Gallup poll, most people between the ages of 30 and 49 are not saving adequately for retirement.
Instead, they feel sandwiched between “taking care of their children (including college expenses) and caring for an elderly parent.” Add in an expensive home, cars, the occasional vacation — and mounting debt — and many folks in their 30s and 40s don’t have a good financial plan beyond the unpredictable — and often insufficient — 401K retirement account.
But it’s the advantages of being in your 30s and 40s — the ability to secure credit, the professional influence, a work experience that can reduce the small-business learning curve — that makes starting a real estate career at this time an often perfect choice.
This all depends on what your exact financial goals are. If you want to add cash to the coffers, then wholesaling and the acquisition of rental properties is often a good way to go. Another great option can be rehabbing, in which you find an undervalued (and usually distressed) property, refurbish it and resell it for profit. As an investor in your 30s and 40s, you are uniquely positioned to take advantage of this powerful venture.
Though your 30s and 40s can make you feel like you’re being pulled in 200 directions (all at once), it’s important to remember you do have options. In minding due diligence, and appreciating the assets you do have, you can turn this period of your life into the basis of an effective foundation for your financial future.
Real Estate Investing in your 50s (and Beyond)
The risks you were willing take in your 20s, 30s (even 40s) don’t sound quite aspalatable by the time you start thinking about retirement. While starting a real estate investing career in your 50s and beyond can still be a fiscally-sound idea — and any number of real estate investing strategies can be effective — one great strategystands above the rest: buy and hold passive income.
Though not as aggressive as areal estate investing strategylike wholesaling or rehabbing, rental property assets are a great way to earnpassive income. If for nothing else, rental properties are great at two things: allowing you to build your retirement, and take care of any shortfalls your current income may create.
This is because many of the issues that hamper younger investors — the securing of credit, accumulation of savings, a developed professional network — are assets most investors in their 50s and beyond possess.
There’s also extensive work (and life) experience that can give you much-needed business acumen whentussling in the real estate investing trenches. Investors, with some life experience under their belt, tend to be good at evaluating the viabilityof real estate deals.
It’s worth noting, however, there is still risk, and you must guard your “nest egg” properly. However,in the right circ*mstances, and armed with enough industry experience, real estate investing at this age can be a fantastic financial strategy.
Getting Started In Real Estate (Wherever You Are In Life)
The key to starting a real estate career — no matter how high that birthday number gets to — is to assess where you are financially, and plot the best course for where you want to go. We’ve made broad, sweeping assumptions in the course of this article, for the sake of convenience (each person’s financial — and life — situation is unique), but don’t hesitate to use this information as a barometer of sorts. Only you can know which investments suit you best. Just know this: real estate is a viable investment strategy for anyone looking to build wealth, regardless of age.
Each period in one’s life brings with it advantages and disadvantages. When you have a desire to start a real estate career it’s important to realize what positives you bring to the table — minimize negatives as best you can — and make a plan to create the future you’ve always dreamed of.
