Millennials have a penchant of dreaming big. They are often inclined towards the luxury the life has to offer. From fast cars to luxury living home in Bangalore and other metropolitan cities, they tend to work hard in order to achieve all this. This often leads them to be more conscious of the investment decisions they make — millennials are no longer ignorant about properly investment.
However, according to statistics, a substantial number of millennials still consider cash as their preferred investment over stocks and property.
And that’s the reason why millennials still need to know a thing or two about property investment. Otherwise, the aversion of property investment in some of the millennials is somewhat troubling. It seldom allows them to buy their dream luxury living home in Bangalore and other fast-moving cities in the country.
That’s why today we are compiling a list of the most important things millennials need to know about property investment.
1. Always Follow The 1 Percent Rule
Before you get further confused, here’s the gist of this rule: the 1 percent rule of property investment says that if you can rent the property for at least 1 percent of the acquisition cost, then the purchase or investment is going to be worth it.
That said, please note the emphasis put on ‘acquisition.’ There is a vast difference between the acquisition cost and the sale price of the house.
While the sale price only talks about the cost of the house, the acquisition price means the final cost which includes everything from the paperwork work cost and right down to the renovation and repair cost of the house.
2. Peruse Through the Potential Risks Carefully
When it comes to investing in real estate, you won’t ever be able to thrive with a myopic stance. We know how it usually goes — young people often get carried away by lengthy billboard ads how they can live a carefree life after retirement if they invest in a certain real estate project. While there is nothing false in this statement, people do gain such benefits from real estate, but this stance is still somewhat skewed.
Before you invest your hard-earned money in real estate, it’s important to consult a professional realty agent who will help you with selecting an appropriate option. Especially for millennials, it is important to take professional help to alleviate possible risks.
3. Assess Your Personal Financial Situation
If you jump in the property investment arena without heeding attention to your personal financial situation, then you are simply heading for a disaster. If you don’t choose your steps carefully, then it might even get neck-deep in debt.
Make sure to calculate if odds are against you and whether you stand to make a profit against the investment you are likely to put in. While you are at it, don’t forget about the 1 percent that we discussed at the beginning of the article.