Investing in Real Estate at a Young Age

Contrary to popular belief, real estate is not just for rich folks. Most people think something along the lines of, “We have the rest of our lives to build riches, buy real estate, and invest.” While that is true and everyone should enjoy their lives, most people realize they should’ve started learning how to invest earlier as opposed to later. The beauty of real estate syndications is that anyone can learn the business or find an operator they want to invest with. In this post I want to cover 5 advantages that young people have when it comes to investing in real estate.

1. You’ll have time to establish and maintain relationships as a young investor.

Real estate is a relationship business and regardless if you talk to a developer, lender, syndicator, etc. you’ll continue to hear those people reaffirm an emphasis on relationships. A young person looking to get in the game and learn how to implement the BRRR strategy, become a syndicator, or simply buy rental properties has time to build long-term relationships. More so, those people have time to build a team whose focus is on long-term success. After all, a team is built by strong relationships.

For young people simply looking to invest as opposed to running their own business/operation, the future is just as bright. Young investors have the luxury of having fewer responsibilities and as a result, they can use their time to learn about various syndicators. I’ve stressed in previous blog posts the importance of understanding the strategy of an operator before investing with them and the benefit of having more time allows an investor to not only seek out syndicators that meet their criteria, but to diversify their portfolio with a syndicator over time.

These relationships will be stronger in the long run if you can start establishing them as soon as possible. If you meet someone in your twenties, you won’t only be in your thirties in ten years, but you’ll also have known them for ten years. That is a lot of time to establish a solid bond.

2. Financial Independence 

Before most people ever realize they’re in the rat race, you may escape it (or completely prevent it) if you start investing in your 20s. When you have enough passive income from your investments to meet your monthly expenses, you have financial freedom. That’s time that can be spent in a multitude of ways from starting a business to focusing on some creative endeavor. 

While achieving financial freedom in your thirties sounds great, it’s not all sunshine and rainbows. Quite honestly, starting to invest in your twenties with the goal in mind of achieving financial freedom in your thirties takes an incredible amount of sacrifice. Unless you inherited a great amount of money or managed to maneuver yourself to making a lot of money very early on, chances are you’ll need to work hard, be thrifty, and say no to social events here and there. I stress that you don’t need to be a robot and work all day with only money in mind, but rather think twice before you waste money on things you don’t need. 

3. More Chances and Supportive Individuals

As a youthful investor, you’ll stick out. My team and I are regularly told by older successful real estate syndicators, investors, and developers that they wish they started as early as we are. For context, the oldest person on our team is 23. 

A large age gap can get a young investor a lot of positive attention. Younger people who take initiative and are keen to begin investing in real estate are supported by other real estate investors. Younger people are easier to connect with because many investors identify with individuals who are just starting out. Everyone wants to support a young person, especially one who is devoted to becoming a successful real estate investor. Long story short, use your youth while you still have it because it won’t last forever.

4. More risk can be taken.

Before investing your money or the money of others, you must, of course, get educated. Nonetheless, you have time to learn from your mistakes as a young investor. Regardless if you’re a passive or active investor, problems are unavoidable. If you happen to go down the entrepreneurial path, definitely expect them. Nevertheless, you’ll be far further along in your 30s if you start investing early than if you wait.

If an investor uses the phrase “life is a game,” they don’t necessarily mean cards or sports. It involves carrying out tasks in the proper sequence and at the appropriate time in order to optimize your prospects and the results you produce. When compared to someone who waits until they are forty to pick up a financial education book, someone who starts investing in their twenties will likely live a different life.

Avoid delaying your investment and take on the risk while the stakes are lower. 

5. Time to compound

If you’re in your twenties, it’s likely that you don’t have a spouse or children. As a result, you’ll have fewer obligations and more free time to save up money and invest.

You’ll undoubtedly have other responsibilities that keep you “busy.” There will always be something competing for your attention, whether it’s a job, friends, a significant partner, etc. Regardless of what it may be, it’s in your best interest to prioritize real estate investing and make time for educating yourself. Once you have a family plus your child’s soccer practice, you’ll be glad that passive income won’t have you stressing because you have to take time off work. 

Having those kinds of obligations will make it far more difficult to begin establishing your real estate portfolio than a part-time job, homework, parties, etc. The 24 hours in a day are the same for everyone. Time is the most valuable resource we have, so make sure you use yours properly.

Conclusion

Needless to say, I think you get the point that investing when you’re young has many benefits. Although, regardless of what age you are it’s important to put your money to work. That being said, I’ll leave you with one more thing that a number of successful investors have told our team:

“I wish I had started when I was your age.”

If you have any questions regarding the terms and concepts in this post or previous ones, don’t hesitate to reach out to either me (tedi.nati@jpacq.com) or someone on our team so we can help explain what is causing the confusion. If you’re interested in investing with us at JP Acquisitions, you can contact us via email (contact@jpacq.com), LinkedIn, Instagram, or our investor portal to set up a meeting.

As always, I hope you enjoyed reading this post as much as I have writing it. Best of luck!