A Millennial's Need to Know: Why Invest in Real Estate Today?

It is a well known fact that real estate is one of the best investments you can get. Be it a house and lot or a condominium, it self-appreciates in value over time. 

As a millennial, I am aware that we are mostly in the working class now. And while money has been a bit tight despite the world's current situation, I feel that the real estate market today is the best time for us to invest in properties. Now, how can we take advantage of that while in the pandemic? 

Most properties are standing currently at very low prices, and there are a lot of easy ways to pay them via a broker or a bank. So there is really no stopping you from getting that next great investment! Here's a guide on why's and how's of investing in a new house or condo.

Why get a real estate property?

There is a lot of earning potential with properties. From what I have learned in life, if you are to get a property, it is a great investment if it can afford to pay for its own loans. Even better if it can help you get more money on the side. 

If you get a property that is close to schools or offices and other necessities, you can rent it out and in the long run, the property can literally pay for itself when it comes to its mortgages.When rented out, the steady source of income coming from a for-rent suburban home or urban condo unit is a profitable option for any prospective investor. A pretty sustainable mode of passive income right?

In the long run, you can even do a buy and sell approach, especially when it comes to condos. Developers usually sell their units at a discounted price during the pre-selling stage. This much lower introductory price is usually around 30 percent cheaper than a completely finished unit. Once finished, it can be flipped and sold as ready-for-occupancy units that are readily available for homebuyers. 

Sell them at full value or a bit over, and you have gained back at least 40-50 percent of what you originally bought it for.

Why get a broker or go to the bank for the mortgage?

What is a mortgage in the first place? A mortgage is a long-term commitment to a loan. When getting a mortgage to buy that property you are interested in, the guarantee/collateral is the house you use the loan for. If the loan is not repaid per the written agreement, the house is claimed by your lender as their own. This is when banks and similar lending entities foreclose properties.

You can go to the bank when getting a property, to see your options for paying for the property you would want to get. You can also opt for hiring a broker to get a mortgage and see the fees.  It does cost extra. But there are a lot of benefits, especially if you hire a trusted broker and if you’re unsure of the best type of mortgage to fit your situation. They can be helpful and insightful to ensure you get the best possible deal with the lowest amount of interest rates.

An alternative if you really don’t want to pay broker fees, is to use a mortgage calculator. 

These are a great tool to use and see if you are on the right track with the current bank you would want to do business with. There are also mortgage calculators that can estimate your qualifications based on your income.

Buying a new home or property is a big step, and when you're just testing the waters, it can be a daunting process. But if you do your research, listen to sound advice from professionals and double check calculations, you’ll make sure you get a deal that works for your circumstances. Before you know it, you could be having a great property that pays for itself. And once the monthly mortgage amortizations are done, all that passive income is yours for your retirement fund!