More young people are starting to show an interest in property investment, with a reported year on year rise in the number of applications for buy to let mortgages made by 20 to 29-year-olds since 2015. While this is a good statistic that points things in the right direction when it comes to the future of millennials in property, there’s definitely still room for improvement.
The average property investor age stands at around 42 years old, and although this is lower than the previous 52.3-year-old average, there are lots of reasons why more millennials should consider investing. Property investment comes with so many benefits such as increased wealth and a better ability to meet any financial goals. For ambitious young people, this opens plenty of doors such as having the funds to launch their own business. Aside from these benefits, there are also some ways that being young can actually give you the upper hand in property ventures. If you’re a young adult that’s been contemplating buying an investment property, hopefully these points will steer you in the right direction.
They have fewer commitments
Investing in property is a risky business, but for young people, this risk can be less of an issue. Sure, experiencing any negative outcome of an investment is bad whatever your age. Unlike with older investors, however, who may have families to provide for or other big commitments to think about, young people tend to have more freedom to make and recover from mistakes.
They have time on their side
Another benefit is that the younger you are when you invest, the more time you have to ‘wait out’ the investment. Property investment is often all about timing. If you buy an investment property at the right time, when it’s price is affordable, you could find that you make massive returns on your investment if the property grows in value. This is more likely if the area you purchase the property in has a lot of capital growth potential. In the UK, property opportunities in cities like Liverpool and Manchester such as those from RW Invest tend to see high house price growth along with attractive rental yields. By being smart and researching the market, millennials can often get the upper hand as they have more time for their investment to grow in value before selling it or passing it on to a loved one later in life.
They can relate to young tenants
When it comes to the number of people renting property in the UK, the majority of these tend to be young professional tenants or students. If they plan to rent to these type of tenants, millennial investors are at an advantage as they’re able to get into the mindset of their potential residents more easily. This way, they can pick out the properties that are more likely to appeal to these tenants, such as those in prime locations close to lots of amenities and transport links. If younger investors choose a hands-on investment where they take on landlord responsibilities, these tenants may also feel more comfortable corresponding and dealing with a landlord that’s closer to their age range.