Exploring real estate while in your twenties can be an interesting journey. Often a market perceived to be reserved for the middle-aged, financially well off and, or mature, 20-somethings can find it tough to prepare themselves adequately. Brandon Turner for HuffPost, Senior Editor at BiggerPockets.com, gives 20-somethings the top 10 mistakes they are making in regards to real estate:
- Living with mom and dad too long
Staying with mom and dad to avoid doing grown-up stuff like getting a job and paying bills? According to Turner it’s “time to grow up and get a job, start paying your bills and meet the world.” His only exception, those living at home to “save money or get out of debt.”
- Not doing your homework
“Knowing what makes a good deal a good deal, what makes a good location a good location and so on are extremely valuable skills to have.”
- Believing “real estate” is for the old, rich, and boring
Not for just the old and rich, but also for all of those interested in a “killer smart way to use real estate to build serious wealth.”
- Not buying with flexibility in mind
Making the mistake of not realizing that life can change. Maybe in a few years that cheap, “one-bedroom condo” you thought was so awesome for its affordability might not turn out so awesome in a few years if you decide to expand. Or maybe that city isn’t as cool as you believed. Turner warns that 20-somethings take the time to consider these things unless planning “to rent the property out using a property manager.”
- Maximizing your debt based on two incomes
Yes, it can be a beautiful thing when two 20-somethings get together and combine their incomes. Turner warns, however, against the belief that more income means there’s room for more expenses. Buying a larger home and packing it with all the things two incomes can afford is a common mistake, according to Turner. Especially when a baby is introduced into the picture which can lead to a couple being “in a financial crisis, unable to pay their bills, and [spending] the next 40 years trying to escape the cycle of debt they’ve created.”
Be smart. Two incomes can also mean more money towards savings, securing a financially stable future, or clearing debt.
Turner offers “real world strategies for overcoming these concerns.” Please read, “The Top 10 Mistakes 20-Somethings Make Regarding Real Estate” for the complete list and strategies.
- Top Budgeting Resources for 20-Somethings (apartmentguide.com)