When is a good time to start investing? According to Lisa Montgomery, the Chief Executive of Resi Home Loans, the sooner young working people buy their first property the better. As long as young investors can afford to hold on to the property for at least the medium term, Ms. Montgomery recommends making a purchase.
It seems lots of Generation Y investors are taking Ms. Montgomery’s advice even if they cannot afford to buy a property where they want to live. An emerging trend is to rent a home close to a city’s CBD, while purchasing an investment property a bit further out of the city where prices are not as steep. Margaret Lomas, Chairwoman of Property Investment Professionals of Australia, explains that more young investors are choosing to rent while building their portfolio very successfully.
Purchasing a property while an investor is in their 20s is an excellent decision as the property has more time to appreciate in value and will provide the investor with equity to use as collateral to buy other assets. Although property values are cyclic, on average residential property values grow by about 11.5% each year. Property is an excellent long term investment, so the sooner it is purchased, the better.
Encourage young investors to get into the market to see what they may achieve over the life of a property!
What’s your opinion on this?