The real estate market is a bit more difficult to invest in than it used to be. While a few decades ago, it was reasonable to expect someone with a minimum wage job and a family to support to buy a house and pay a mortgage, house prices are now a lot more prohibitive.

This is especially true for younger investors who don’t have a few decades of experience and savings to back them up. But this doesn’t mean it’s impossible to purchase real estate.

Do Your Research and Be Prepared

One trick is to find properties in a market that isn’t too competitive yet. Look for areas where house prices are starting to improve so you can grab a property and either sell or rent it when it’s in more demand. 

As well as studying prices, look into areas where there are more jobs or population increases, as housing will become more in demand. Doing your research and paying attention to the market is one of the best ways to be more successful when you enter the market.

You also need to know your budget. You can get a pre-approved mortgage in place or even a quote for a mortgage you’re likely to be accepted for. This allows you to move quickly without biting off more than you can chew. Real estate is one of the few investments that you can and should take out a loan for, but this doesn’t mean you should stretch your budget.

Improving a Home

Unfortunately, these costs also apply to properties that need a lot of work done. Some people able to get a project house, either from an inheritance or through buying a cheaper property. But in order to profit from this, you need to make it habitable.

If you want to be a landlord, a house has to meet basic living standards for tenants to move in and be willing to pay rent. Even if you want to sell it again, it’s much harder to find a buyer unless you improve the home.

However, 69% of Gen Zers don’t think they’ll ever afford a home improvement project because of how much costs can go up. You can reduce the cost of this by taking on some of the tasks yourself, but this takes time, tools, and skill.

A better option for many first time buyers is to find a property that doesn’t need massive amounts of work beyond some decoration changes or basic improvements. This will be a more expensive purchase, but it’s more reasonable to improve and then either flip or rent.

Fractional Investments

But what if you really don’t have a lot of cash or a way to get a mortgage? You can still invest in property without making a big investment. Fractional real estate investments allow people to partially own a property along with other people.

As you can imagine, this has its pros and cons. You do have less control over the property and you will earn less, but the cost is much easier to swallow and you can start your portfolio.