Do you think you have an adaptive nature and can compromise with your lifestyle, if, by doing that you can achieve what you want in life? If your answer is ‘yes’,
Then Read On…
I am suggesting 3 unorthodox ways of purchasing your first real estate very early in your life and become a member of ever growing small landlord community of North America.
Option 1 – You can buy an exclusive rental property as your first investment and start collecting rent while you keep living in a rental apartment yourself.
This option is for those, who got a high paying job at the start of the career because of the good education or for whatever reason. Because of good income, you would be less comfortable in compromising with your own priority. Hence it’s better to go for the exclusive rental property. You may choose to manage it yourself or employ the service of property management company. There are many options available. A single family home, a townhouse in the fast developing area of the metro, a new condo in any downtown core, multiunit properties and so on.
Option 2 – The 2nd option is to buy a house with the 2nd unit or basement, so either of the units can be rented out while you occupy the other unit. This ll generate another income source for paying the mortgage.
If you tenant live next door or in the basement of your house, it’s a fair compromise. You may have to share some services or may have to attend to their occasional complaints. But if you think about the rent which you get to help you pay the mortgage, it looks like a fair compromise.
Option 3 -You can rent out a portion or room of your first real estate purchase(your primary home) to generate income.
This option is for those who are sharply focused to achieve what they want in life. Bigger compromise and more flexibility are required.
I didn’t get it! Elaborate Please…..
The basic idea of the above 3 proposition is to reap the benefit of long-term real estate investment by purchasing real estate very early in your life. A distinctively aggressive attitude is required to undertake such a project early on. For an example, if you purchase a house at the age of 25 and hold it for 40 years till your retirement, do you think there is a possibility of huge profit? You know there is! If you become landlord very early in your life, you create a possibility to purchase many more rental properties. The difficult part is to make that decision to purchase very early in your life.
For the owner-occupied First-time home buyer investment property, you may be eligible to buy with as little as 10% down Payment
The options mentioned above are the ways to work around the proposition to purchase the first investment property at the early age. The focus should be to buy a real estate as early as possible in your life!
Why an income producing property first rather than the primary home?
Most people would agree that the real estate purchase, if, made and held for a long period of time would give you a handsome gain in terms of appreciation. So sooner you buy real estate in your life, the better chance of gaining more!
Now, what are the challenges in buying your primary residence early in your life?
There are a few major factors which are in your way to your purchase of a primary residence.
- The character of the property – when you purchase it as your home, you tend to be less flexible with the features which you have thought all your life about living in your own place.
- Responsibility – you have to prepare yourself to take responsibility mentally. And also to pay monthly installments of the mortgage plus other associated expenses.
- Eligibility – And then you have to be eligible financially with respect to your income for the mortgage.
- Who would share? – In regards to the above aspects, you may probably think about your common law or your future wife as a sharing, supporting or contributing partner.
So without fulfillment of all the above conditions, you won’t be able to buy your primary residence.
How does the scenario change in case you decide to buy income property?
The change of purpose allows more flexibility and easy compromise. Now it’s not your dream home, it’s a business for you. The responsibility and eligibility criteria of purchasing the income property may remain the same as compared to if you are buying your primary residence. If you are buying it by yourself or as a joint property with your partner, it’s a business now. So lots of variations possible and it would work favourably.
Why it’s suitable for the Millennials or the younger generation?
1. The studies have shown, by characteristics, the millennials(born 1982-2000) are considered to be more open-minded, receptive to new ideas and way of life. They are also more flexible and have a go-getter attitude.
2. They are thought to be more materialistic and mean when it comes to the personal pursuit. Check out this article from Live Science.
The idea I am suggesting here needs all the characteristics the millennials espouse. Not all people do things like this, which is the reason I am calling them an unorthodox way.
As per the Rental Protection Agency, 544 new landlords enters into the Rental Market everyday!
Let me explain.
The new ideas which are opposite to the tradition are not everyone’s cup of tea. The people with open-mind get attracted to such ideas. Lots of courage and go-getter attitude is required to execute those unorthodox ideas. Buying an income producing property first before the primary residence is one such idea.
There is a saying, no success without risk. And it’s always going to be risky when you embrace a new idea and execute it. To purchase a property by yourself involves greater risk. But again you won’t be able to achieve greater success unless you take a bigger risk.
Flexibility and compromise
This is a sweat money proposition. You compromise on many priorities and be flexible to achieve your far-fetched goal of earning big in real estate. As an example, you may keep renting and won’t have your own home for a long haul.
Conclusion: The idea of purchasing real estate early on by making a compromise in own lifestyle sound very appealing when you think about its long-term benefit. One should give a very thoughtful consideration before making the big decision.
Hope you enjoy this article.
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Disclaimer: This blog post is not a substitute for professional advice where the facts and circumstances warrant. If any user requires professional assistance, the user should consult his or her own professional advisors and discuss the facts and circumstances that apply to the user.