Young adults are often advised to start investing and saving for retirement early. This is good advice because the earlier you do start investing the more time your investments have to grow and work for you. Most investment advice for young adults is aimed at traditional options like stocks and bonds; however, real estate is actually a great investment choice as well. These are a few reasons why real estate is a smart investment for young adults.
Risk is something that every investor needs to consider. Younger investors have the luxury of taking greater risks than older investors though because they have more time until retirement. While it is never a good idea to invest more than you can afford to lose, younger investors have the option of investing in properties that will pay off further in the future.
Rental real estate provides an opportunity for an investment that provides ongoing monthly cash flow. Depending on the property, a real estate investor may earn hundreds of dollars per month in profit for each rental unit. Contrast this with the stock market where your dividends may buy you a few cups of coffee or a cheap dinner.
Rental real estate not only provides monthly cash flow, but it also appreciates in value over time. Over the course of decades, a carefully chosen investment property may increase in value several times over.
Investing in real estate as a young adult also provides an opportunity to achieve financial security and even to enjoy an early retirement. Investing in the right properties early allows a young investor to enjoy assets that are continually increasing in value while also providing monthly cash flow. This combination of returns can easily contribute to financial stability later in life.