Are you thinking about investing in multifamily properties but you’re 55 years or older and you think that the time has passed for you to get started? If so, the good news is that it’s never too late to get started with investing in multifamily!
Right now is especially the perfect time to get started with investing in multifamily properties thanks to the continued demand for rental properties across the United States and historically low mortgage interest rates.
More people are living into their 80’s and 90’s than ever before and unlike decades ago, people who reach an advanced age in today’s world can enjoy a level of health and strength that they wouldn’t have been able to enjoy before.
Living to an advanced age means that you’re going to need more income to fund your retirement because Social Security and other forms of investment may not be available in the future.
You should never let age stop you from investing in your first multi-family rental property. In this article, we will share with you several tips that you can use to help you get started with investing in multifamily regardless if you are age 55 or older.
Build An Investment Team By Speaking With People That You Already Know
If you want to invest in your first multifamily property with other people, why not build an investment team with people that you already know?
One of the best things about being an investor who is 55 years old or older is that you have a network of friends, family members, and business associates across a wide variety of Industries who are getting close to retirement and are searching for ways to grow their investment portfolios.
The first thing that you should do when you’re considering getting started with investing in a multifamily property is to tap your network of people that you know and find out which person among your network has investment capital that they’re looking to use to invest in a new project.
What’s great about talking with your business associates, friends, and also family members about investing in multi-family is that even if they don’t personally plan on investing in a multi-family property, they may be able to point you to someone who may be interested in getting started with making their first real estate investment.
Besides establishing investing relationships with the people that you know, you should also be you turning to real estate group’s online for your local area to connect with other like-minded investors who may be interested in getting started with investing in their first multi-family properties.
After assembling a team of investors who are ready to get started with investing in their first multifamily property, you can then start the process of searching for your first multifamily property to invest in.
Utilize Your Existing Capital
After building your multi-family investment property team, the next thing you will need to do is to come up with the capital that you’re going to need to invest in your first rental property and one of the best ways to do this is to “capitalize your existing capital”.
What does this mean? The answer to this question is simple, if you have owned your own home for more than 20 years, you may have equity in that home that you can utilize to invest in a multi-family property.
Besides tapping into the equity in your home for making a multi-family investment, you may also have money set aside and a retirement account that you can use to pay cash for a multi-family property.
Your access to cash is by far your biggest advantage over younger investors because younger investors who are under the age of 30 may have a more difficult time accessing the cash that they need to invest in multi-family properties.
If you and your team of investors are you able to pay cash for a property you, you will be able to negotiate with a clear advantage and avoid having to pay any financing fees, or mortgage insurance, which would come with financing a property.
Consider House Hacking
Let’s say that you were not able to establish a team of investors to invest in a multi-family property with you. No problem! The good news is that you can still invest in a multi-family property if you are willing to consider house hacking.
What exactly is house hacking? It’s one of the most common buzzwords in the real estate community online. This means that you would be willing to live in one of the units of your multi-family rental property after you purchase it.
House hacking is one of the easiest ways to get started with investing in multifamily rental properties and it’s possible that you could buy your first property with as little as 3% down if you purchase that property with an FHA loan.
By default, house hacking makes sense for any real estate investor, especially those multifamily Real Estate Investors who are over the age of 55 because it will effectively eliminate their monthly housing payment while guaranteeing that the tenants who live in the other units of their rental property will effectively pay their housing costs every month.
Stay Focused On Generating Money For Retirement
As a real estate investor who is over the age of 55, you should always be focused on the goal of generating passive income that you can use to fund your retirement.
Passive income is something that you can continue to grow over time especially when you forecast, research and do your “due diligence” before investing in a new multifamily investment property.
Snowball That Additional Income
Last of all, but most important, another thing to do as you grow older and generate income from your multifamily property, is to snowball the additional income that will start coming in from your rental property.
This is an important thing to do because, instead of reinvesting the funds from your multi-family property into purchasing another vehicle, boat, RV or taking that long vacation that you’ve been dreaming about, you can get a far better return on investment when you take the proceeds from your first multi-family rental property and reinvest it into another rental property.
Remember that you’re never too old to start investing in multifamily rental properties, especially rental properties are located out of state. You can get started now regardless of how old you are and begin to generate a passive income that you can use to fund your retirement.