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3 reasons to start investing while you’re young

by xyonent
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First Home Buyer Dreaming House.jpg

Investing in real estate for the first time can seem overwhelming.

Without a disposable income and investment know-how, it may seem unlikely that you can survive in the real estate market, competing with deeper-pocketed investors.

but, Here are three reasons why you should consider investing while you’re young.

1. Compounding effect over time

The biggest advantage young real estate investors have is time.

Not only do younger people have more years to learn about real estate investment strategies and the market, but they also have more time to recover if they make a poor investment decision.

For example, if you buy a rental property when you’re 20 years old and you lose money on that purchase, you have time to learn from your mistake and recover – it’s a learning curve.

2. Economic benefits

Some of the main financial benefits of investing in real estate at a young age include:

  • Maximize your cash flow: One of the goals of real estate investing is to increase your cash flow, or the amount you have left over each month after expenses. Generally, your cash flow will increase over time as rents increase, while your repayments stay roughly the same and your mortgage is paid off as the property’s equity increases.
  • Thanks: The longer you hold an investment, the more valuable it becomes.
  • Diversify your portfolio: Over time, you can build up wealth by purchasing several investment properties.
    The sooner you purchase your first income-generating asset, the sooner you will be able to diversify your portfolio and purchase other investment properties.
  • Negative Gearing and Depreciation: Because owning a rental property can be cheaper than owning a home, many young people are using investment properties as a stepping stone.
    Repayments are subsidised by rent and various tax benefits are available, including depreciation and negative gearing.”

3. Control

Unlike other forms of investment, such as stock trading, real estate investing allows you a high degree of control.

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