Why Should You Invest in Property In Your 20s

You look at your watch. It’s 8:47AM. It takes precisely 24 minutes to get to work, and you’re going to be late. You grab your keys, hop in the car, and step on accelerator to get onto the highway. Halfway there, you come to realise that you have just one lonely minute before you’ve sealed your fate: arriving 11 whole minutes after you were supposed to.

Now, defeat is rearing its ugly head. And at that very moment, you find yourself wishing you had more time. Sounds familiar? Well, it should. Whether it’s in this exact scenario or one that is figuratively comparable.

We all need to be somewhere, and more often than not, we feel that we’re behind schedule.

Ten minutes late for work…

5 years late in purchasing our first home…

Ten years late in the career...

RM100,000 behind in retirement savings…

More time to pay off mortgage (i.e. lower monthly repayment)
It seems unfathomable to buy a home in your 20s, with your current job (and potential entry-level salary) but it can be done. It requires dedication, careful planning, and a great mortgage provider. Buying your first home before your thirtieth birthday means you've got a whole lot of time to pay off the mortgage, for one thing, so you shouldn't stress about your finances, as the monthly repayment is lower compared to those who take out a housing loan in their late 40s.

Lock in (low) property price
Buying in your 20s is a great way to set yourself up for a successful financial future. It means that you'll have financial security later in life, and that you won't be paying higher prices for the property you want when the markets rise even more.

Compounding growth
Investing in property provides a safe way for this and the earlier you start the longer you have for this wealth to accumulate. This is called compounding growth and by investing in property in your early 20s, the greater your wealth will be later down the track.

When it comes to investing in property, the best thing you can do is utilise a buy and hold strategy and only sell when you have to such as selling one property to pay down the debts on others to free up more equity. Ideally you want to hold onto a property for as long as possible, but at the minimum this should be for 10 years or more, as this is typically the time it takes for a property to double in value, depending on its location.

Less Risk
Buying a property in your 20s is the best time to buy. You are open to more risk as you may not yet have a family to support and this gives you more time in the property market to see your property grow in value. As the property cycle takes approximately 10 years to complete, you could see your properties go through three cycles and dramatically increase in value.

Early Retirement
Furthermore, getting into the property market as early as possible opens the door to an early retirement. Why work until you’re 65 if you don’t have to? Owning five or more investment properties not only provides you with more security, but it will put you closer to an earlier retirement.

Retiring younger allows you more time to do all the things that you actually want to achieve, whilst you’re still fit and healthy and able to enjoy life to the full; whether that’s travelling the world, dining in fine restaurants or buying the home of your dreams.

Today, we are living in a world of convenience and luxuries are everywhere. Brand new TVs, phones, luxury holidays, cruises and cars – we all want to spoil ourselves with some of the good life. However, if we want to realistically afford all of this without living on a credit card, then investing in property provides you with not only security, but the ability to grow your wealth and even live off a passive income at the same time.

Buying your first property can be a daunting and stressful experience, especially as a young investor in your early 20s. There’s lots to research, whilst coming up with a deposit can be particularly difficult. However, it is not impossible if you have the right mindset and you can reap the rewards if you buy at the right time in the right place.

Disclaimer: Information provided in this article is general in nature and does not take into consideration your personal financial situation. It is for educational purposes only and does not constitute personal financial advice. Remember, the value of any investment can go down as well as up. Before acting on any information to make investments or acquire or dispose of financial products, you should consider seeking independent financial advice that is tailored to your needs.