Real estate investment tips for young professionals
You want to make money and live a better life, you have heard that real estate is one of the ways to do this but unfortunately, you do not have the seemingly obscene amounts of money that you hear and read about as the way to get started.
You have started to feel less motivated to look at that path and the ‘get rich quick and easy schemes might just have started to look good and you are thinking “But why not? At least I can make the money I need from there and then come to invest in real estate.” DON’T!!
Today I am writing to you, for the first of hopefully many times to come- you can watch out for these ‘letters’ on Tuesdays.
Because everyone who talks about these investments and everything you can readily find, seems to be scripted for those who already have the cash to invest. That’s true but the other truth is that some of you have even much more than all those who seem ready and able to invest in the properties that you think are above your league.
You just can’t quite see it because they have gotten so good at looking rich rather than actually being rich.
In various sessions, I have had to speak to someone in your shoes
- Young, unsure what to do and very impressionable
- Probably still in University or has just graduated and working
- Definitely without the responsibility of taking care of kids or a significant other this is not the time nor the premise for you not to be responsible to your siblings or parents as might be needed – don’t misquote me).
And they all say they want to invest in property so they can become rich. Some even say they look forward to, from the first investment, getting rewards in the millions. Whomever or whatever gave you that impression has misled you.
Investing of any kind is long term. Think of the farmer who plants corn, doesn’t he have to wait at least a few months to see his corn grow and get mature? The same applies to real estate investing and it even takes much more time.
If you want to be able to invest in real estate successfully then you need to understand the foundational set of rules that guide how successful you will be in that journey.
Here are a few tips from me – things I wish I knew and did in my time.
- Earn a stable income as soon as possible: This is the perfect point for some to bring up the saying of “the end justifies the means”. If your means are illegal then you are just looking for an excuse to do illegal things and I won’t be a party to that. But if you are the one who is doing various little odd jobs that keep turning a profit that adds to your bottom line, then so be it. Then again and also – make sure you refine this into a system so that you do not burnout and/or drop the ball on any of them. Getting overworked because you think you are trying to make money is REAL.
- Live below your means: Now is not the time to want to live alone or lavishly because you are now a graduate. Knowing Lagos and Nigeria of today and house hunting, you might get a better deal renting a house than a ‘self-contained or mini flat’ – especially if you are used to having space and an actual kitchen, not a kitchenette or cramped bathrooms. If this is the case then, find a friend who can split the rent with you and agree on the number of years you are living together (barring all circumstances & for the purpose of the shared furniture you might need to buy)
- If you cannot get a friend to share rent with, then get a friend of a friend to stay in the other room(s) so you split the costs. Today this is an opportunity that Airbnb offers you (guests who need a place to stay) but you might not be able or ready to start on that route so just share your flat with someone local for now.
- As soon as you can, get a stable car: If it can take you from point A to B but doesn’t look good, even better. You are initially meant to be looking for practical resources that serve and work not beautiful ones.
The goal is that you want to save as much as possible to have some money open for investments either every month, quarter, half-yearly or annually.
As much as we say that real estate is a viable investment asset, I also do not kid myself or anyone else that it is the only one or the most suited for people with very low cash flow. My strategy for such people (of which you are surely one of the constituents) is that you should invest in other short term deals/offers that will help sustain and grow the daily or monthly savings you make so that at a certain time you can have a bit of a bulk to now invest in assets like real estate.
Considering the escalating price of rents, the question you might be asking me is “How do I live below my means by way of rent?”.
There is an investing model that allows you to long lease an apartment within already built-up areas in the Lagos metropolis. Through this model, you can pay what would or should be 2 years of rent to secure a place for up to 15years. So if you are investing and find that you can pool together about 1.5 to 2m then you can at least look forward to getting your housing needs sorted financially for the next 15years.
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And if you know that you will not need to stay there for that period of time, then you can look forward to renting it out yearly and still make some profit on the investment over time.
As a lower income earner, my first real estate investment tips will be to stay disciplined and consistent in everything that you are doing to earn, multiply and grow your talents, skills and money.
My second real estate investment tips would be that you plan to start consistently growing a portfolio of real estate assets that keep making you money and these long lease apartments might be the way you want to go that starts you on the journey of being a landlord without owning any real estate assets in full.
Now that you have read this to the end, what are your thoughts?
Are these the real estate investment tips that you could use to get started on your investment route?
When I started, no one told me any of these real estate investment tips, I had to discover them by myself and it took time. You don’t need to waste your own time learning it all by yourself – learn from others before you and scale faster.
Till next Tuesday, I remain loyal to your smart income, real estate & portfolio growth.
PS: I look forward to reading all your questions and comments, so please share them via the contact form below