hot topic
HOT TOPIC � by Rebecca Michelle
Plunging into real estate as a millennial
We are “ the generation ” that ’ s shaping the future .
Millennials , also known as Generation Y , are the demographic cohort following Generation X . They the 20-somethings that came of age with less money and fewer opportunities , re-inventing what having the means really means . They are our next generation and they ’ re popping up from everywhere across Malaysia .
The truth is , the housing market in Malaysia right now is in a conundrum . Many people are asking if the property prices will go down . Well , the economy is in fact inflating and there is no right time to buy or not to buy . You should buy within your means , when you can .
The property market is indeed quieter now compared to that of in 2010 - 2012 . But it means that now would be a good time to pick up good offers on property investments .
For quite some time now , the baby boomer generation has been the dominant population group . While they are now interested in downsizing , millennials are having children and growing in their careers . Thus , buying a house would be the next logical step . With positive returns potentially on the horizon , millennials are on the right track .
Khalil Adis , founder of Khalil Adis Consultancy Pte Ltd and Director of REI Mediaction Sdn Bhd , observed that there are still strong demands for affordable properties but due to the lack of affordable homes , developers would have to be creative and think of innovative concepts to continue attracting buyers in a lull market .
Unlike previous generations , most millennials today come out of college with huge student loan debt . The spectre of heavy student loan debt has severely impacted millennials ’ ability to buy a home . And unfortunately , this problem is compounded by more stringent mortgage qualification standards , and higher down payments .
Some millennials are unfortunate enough that they are trapped in an ‘ economic purgatory ’, a period where they are unable to secure jobs that use their potential while being chronically underemployed or overeducated . In other cases , though , millennials are simply trying to save money and be less spendthrift with big purchases that they don ’ t see as essential for a full , happy life .
However , developers are responding to the unaffordability cries by coming out with attractive offers for many first home-buyers / avid investors . “ Some developers are offering zero to minimal cash down payment to lure home buyers , so you should take advantage of the available opportunities . But before you jump onto the bandwagon , you must thoroughly do your research first ”, Khalil added .
Millennials today are most probably your archetypal 20-year-olds . Many of us have labelled them , studied them , written about them and simply tried to understand them . But at the end of the day , there is one thing every brand needs to recognise when it comes to this generation ; money and means don ’ t always go hand in hand .
Tips for Millennials Who Want to Invest in Real Estate
There are various ways that millennials can start investing in real estate and many young people are taking different routes depending on their career , financial history , credit scoring , etc . Here are some ways
1 . Work on your credit score Investing in real estate is not something you can start doing overnight . There are some steps that you should take before you buy your first property such as having a good credit score . Fortunately , when it comes to hard money loans , your credit score isn ’ t as important as it may be if you were applying for a traditional loan . Hard money lenders generally look at the value of the property and not at the borrower ’ s finances or credit . However , paying off all your loans and having a solid credit score will give you an advantage .
2 . Save There are plenty of ways to get financing for your real estate investment , but having proof of consistent saving will help when finding a lender . Successful investors would normally start saving a certain amount from their salary that stays tucked away until they are ready to make their first purchase . This can be difficult if you have a student loan , but if you focus on paying off high-interest debts first , pay more than the minimum balance due ( if possible ) and manage your spending well , you will be able to pay off your loans quicker .
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