Young professionals and graduates today have different priorities to that of 10 to 20 years ago. In the past it was the norm to settle down in your 20s and get on the property ladder. Today, things are very different. Many people in their 20s prefer to rent because of the freedom and flexibility it provides and are not looking to settle down until later in life. But there are those that are still living with their parents or renting shared accommodation that are gagging to buy their first home. With property prices over 30% below 2008 prices, now may just be the right time to take advantage of the market.
Be An ‘Early Bird Property Investor’
Timing your entry and exit of a property market is a key element in becoming a successful investor. The diagram below shows how the property market works.
The eagle eyed property investor is always looking to buy either at the end of a recession, the bottom, or the recovery stage, whilst looking to realise profits either by selling or via the re-lease of equity during the expansion and peak stages. In the simplest terms, it is always better to buy low and sell high.
One of the most important aspects when investing in property is to know your market. Do take the time to research, research and research again. Read as much as you can and visit your desired location as often as possible. A good place to start is on the internet. In addition, read magazines, books and visit exhibitions. Talk with people who have done it before – nothing beats firsthand knowledge.
Building a Deposit
It sometimes can be very difficult for young adults to get on the property market, usually because of lack of a deposit or poor credit history – usually caused by those dreaded student loans. However, with a little creativity there are a few things that can be done to get started.
Buying property with a friend is becoming increasingly popular as sharing mortgage payments, bills and other expenses can make the difference between getting onto the property ladder or not. With regard to family and property, some say that buying property with family can be a better idea – if you buy property with your brother, sister, father or mother you can always appoint a family member as mediator in case of a dispute but you can end up with family ‘baggage’ getting in the way.
Parents can also help their child with a deposit for their first home by accessing equity tied up in your own home – or maybe in other ways.
For those without a large deposit, shared ownership is still a realistic route that offers a helping hand onto the housing ladder.
To be successful in property you will need to have a first class team. Typically, you will partner with a reputable agent, who is knowledgeable in the area you are looking to invest. An excellent property agent will be able to understand your requirements and source properties that match your goal and objectives.
Your team will also include a reputable solicitor – who will help you to invest safely and securely. Your top team may also include a mortgage broker.
The Time To Buy Property is Now
We are now in a buyer’s market and the time to take advantage is now. Sellers are now happy to accept sensible offers and interest rates are at an all time low, so mortgage repayments are more affordable than ever before.
Investing in property can seem quite daunting to the new investor. In reality if you do your research and build a strong team, you will quickly build up confidence to take the first step. From our experience once you have taken the plunge, many first time investors go on to build property portfolios worth millions of pounds. Property investing has proven over and over again to be one of the most effective vehicles one can use to achieve financial security.
Words by Loxley McKenzie from Colordarcy Investment