Choosing to invest in real estate is an act that requires a certain level of maturity. This is why it is rather advisable to invest after 40 years, once the professional, financial and personal situations are well established.
However, as you would see in this article, there is ultimately no real preferential age before embarking on real estate investment. The will and determination of each individual, whether 24 years old, 38 years old or 62 years old, constitute the main driving forces in order to carry out all operations specific to real estate investments.
Choose to invest in real estate before age 40
A young adult who would like to invest in real estate will most likely have to apply for a loan from a bank. This will be able to grant it if the potential future investor has stable and regular income, has no bank overdraft and already enjoys solid savings. In the event that the cash flow proves to be insufficient in the eyes of a bank, a young investor can ask relatives to stand surety for the loan .This allows you to partner with a member of your family or a friend with adequate financial resources in order to strengthen your savings.
Concretely, a young adult is recommended to take out rather long-term loans (20 years for example) in order to allow him to gradually reduce the cost of monthly repayment installments and to self-finance his investment. By doing so, a person will quickly improve their positive cash flow (cash flow). Cash flow is a financial expression meaning that a person can measure their finances and profits, in terms of investment, over a period of time.
As young investors are often without real experience, they are advised to favor investments in goods with low stakes (minimum work required, rapid possibility of resale, etc.) in order to best limit the risk of indebtedness. However, we should not dispute the fact that some young investors below 40 years can be financially buoyant enough to finance his real estate investment. If all the lights are on, we must therefore not delay seizing investment opportunities.
With the experience of life, an adult in his 40s can seriously consider purchasing a primary residence. With a healthy cash flow, you can calmly take out a mortgage, especially since the rates currently charged by the banks are relatively low.
Recommendations and Advice for Young Investors
It is recommended to invest in a property located close to all amenities within a specific territory, if you plan, for example, to resell your property, in order to achieve real capital gain.
It is advisable to wait at least three years before any resale, so that your investment and the notary fees are fully covered.
It should be noted that for landlords, buying a property for which work is to be planned amounts to obtaining profitable solutions. This can indeed result in the creation of a land deficit; if you make an investment in a property in need of renovation, you can deduct the amount of your work from that of the rents that you will receive after its rental, and thus lower the amount of your income subject to tax.
Between 40 and 50, the pivotal decade
Generally, this is an age group that allows any investor to be quite flexible in their choices. If you have a good income, you may be interested in rental investment. This type of operation aims to benefit from an attractive profitability while ensuring a good wealth for retirement. It is a normally reassuring and tangible investment which can, on certain occasions, also be synonymous with a tax reduction.
Moreover, taking out long-term loans at this age means seeing the repayment deadlines end at about the same time as retirement begins. Thus, the rents you will receive will compensate to a certain degree for the drop in your income and will above all constitute a sustainable resource. Note that the closer you get to retirement, the more complicated it will become to obtain a good loan.
Investments after 50 years
Today with the extension of the lifespan, a fifty-something can absolutely take into consideration the realization of investments in real estate. If it is rather recommended to opt for short or medium term loans, as the important thing is above all to have comfortable income that can justify a loan request from a bank.
However, even if your retirement is likely to be low, and you are interested and passionate about investing, you should know that more and more banks tend to offer loan formulas adapted to older investors.
In summary, the best time to invest in real estate is now. The earlier you begin, the earlier you get the dividends from your investment. For expert advice on how to begin your journey on real estate investment, contact our expert consultants and get all the help and support you need.