If you are a millennial who has just started to think of investing and growing your wealth, then one of the first niches you are likely to think about is real estate. This is understandable given that real estate has often been regarded as one of the safest assets to bet your money on. Below, we look at three tips that can help you with improving your real estate investment decisions.
Avoid Maxing Credit
As far as possible, millennials should try to never maximize the credit available for buying a home. So, if a bank agrees to lend you $100,000 as mortgage, then you should only look for homes valued at $80,000 or less and take the mortgage accordingly. By doing so, you can reduce the monthly mortgage expenses and lighten your burden, ensuring that you are not stressed out every month trying to keep up with the mortgage payments. And the potential money saved can be invested in a mutual fund or retirement fund to secure your life. At the same time, you will also be in a position to take additional credit whenever required. For example, suppose that you can only take $100,000 in loans as per your salary. Now, if the bank sanctions a $100,000 mortgage and you take the loan in full, then you may not be in a position to take additional loans in the future given your income limitations. In contrast, if you lower your expectations and choose to go with just $75,000, then you can be assured that you can take an additional $25,000 loan from other sources whenever a need arises, like a medical emergency or something.
Get the Right Agent
Make sure that you find a good real estate agent to help you identify profitable real estate investment opportunities. Ideally, they must have long years of experience, and a good relationship with their clients. Any agent with a long list of disgruntled and unhappy clients is someone you should stay 10 feet away from. Never get into deals with such people no matter how profitable it might seem since the chances are high that you might end up on the losing side. So, do a thorough research on the agents and only choose someone who you feel is trustworthy.
Learn Market Analysis
You should also try to learn as much as possible about analyzing real estate markets. Learn about how to appraise the value of a home, how to judge the potential growth value of a home, how to spot homes that are underpriced, and so on. Acquiring such knowledge will help you immensely in picking the best home deals. And if you are incapable of doing the right market analysis, then not only will you be unable to invest in profitable real estate opportunities, but can also be ripped off by sellers who might sell you the homes at exorbitant prices.
In addition to the above, this real estate investing guide for millennials should also help you with managing your investments better.