Can I invest in real estate while young and in the military, and if so, how can I manage my investment while deployed?
I am 17 years old and enlisted in the military and would like to invest in real estate while deployed. How can I get started doing this, and how can I manage my investment while deployed?
First, thank you for your service! The answer is yes, you can investment in real estate, but you need a plan. Investing in real estate can be very exciting, but it comes with a lot of risk. I have some ideas that could help you get organized and implement a strategy to help you with your goals. Let’s start off with understanding the type of real estate investor you would like to be. There are many different types and levels of real estate investors, so which one do you feel the most comfortable with. Find some books on different strategies to read while on deployment. Next, find real estate clubs wherever you are stationed or visiting. Many real estate clubs have clinics that will teach and help you along the way, these connections could prove to be important. This means partnering with people you can trust that could help you as you are learning.
Show me the money! Other important considerations. Buying real estate generally requires capital, how will you gain access to capital to secure a real estate deal? While on deployment, who will watch and care for the needs of the real estate property? Also, consider saving your money by having a personal savings account and a retirement account, with TSP. Lending institutions and investors partnering with you like to see liquid assets. These are a few small steps for you to consider and keep in mind to take your time, be prepared and execute once you’re ready.
Hi! Way to go on thinking about the best ways to build wealth. Not many 17-year-olds think like you. Planning your strategy and learning more about real estate will help you achieve your financial goals. One of our other advisors made the point that you can invest in real-estate-based ETFs and REITs, but I think you are asking about buying actual properties that you rent out. If you are interested in financial instruments for real estate you can open a self-directed brokerage account at places like Etrade, Scottrade, Tradestation or other similar place that will let you buy and sell ETFs and publicly traded REITs. That path will get you started in one aspect of the real estate market. If you are interested in that route, you can learn more about investing at www.investor.gov or FINRA’s site: https://www.finrafoundation.org/investor-education-library.
However, I think you want to actually buy properties. You’ve asked several questions about this path. First, yes, you certainly can start young as a real estate investor. As my colleagues have written, you’ll need to accumulate some money that you can use for a down payment for a property, and you’ll need to have built up your credit score to be eligible to borrow money. That may take some time and delay your foray into real estate a bit, but it won’t stop you forever. Your regular military paycheck will help in applying for loans. Also, once you have your first property and rent it out, you’ll have rental income coming in which will augment your paycheck and hopefully get you to a place where you can buy a second property and on and on. Check out this Investopedia guide on being a landlord.
Finally, you ask about managing your investment while deployed. For the first type of investment (a brokerage account), I think that in today’s military, you can periodically have internet access, so you can check your brokerage account that way and buy or sell as needed. If you are a landlord with rented-out properties, you’ll need to pay a property management company or a friend to manage the property when you are away: to make repairs, collect rent if it’s not automatically deposited or later, keep an eye on the place, deal with re-renting if the renters move out.
I think your interest in real estate is commendable and that it’s definitely doable. Study, read about, watch videos, and talk to people to learn as much as you can about this path. Best wishes to you!!!
Thank you for your service! A great way to invest in real estate without the headache of property management is a fund that contains REITs (Real Estate Investment Trusts). These funds invest your money into real estate projects and you can simply enjoy the returns. No renters or maintenance hassle! This can be managed for you in an ETF portfolio to diversify risk.
Thanks for your service, your courage and your question.
Unfortunately you are 17 so you are not allowed to enter into a legal contract to purchase real estate. After you turn 18 you will be able to.
Managing real estate from a far can be a challenge. However, management companies can help you with the day to day management. However, they will not be able to help you with the purchase or other issues that arise.
I would probably educate myself as much as possible at this stage on real estate investing and save a ton of money. Then as you get older and may have a better idea of where you will live and be stationed a few years down the road you will be more ready to take the plunge.
Richard E. Reyes, CFP, The Financial Quarterback (TM)