Owning your own home can be an effective way of shoring up your financial security and stability while investing for your future. \u201cReal estate is usually a long-term investment that tends to gain in value over time, so for young people, owning their own home can be a way of achieving financial security and their future plans,\u201d Muttik said.<\/p>\n
Investor Jaak Roosaare adds that one of the most common ways of making money from real estate is to rent out an existing home. \u201cMy first exposure to property was quite traditional, I suppose, in that it came when my better half inherited a one-bedroom apartment in Tartu, where we ourselves lived for a long time,\u201d he explained. \u201cLater, when we moved to Tallinn, we started making money by renting it out.\u201d<\/p>\n
However, real estate as a field can pique young people\u2019s interest well before they buy their first home. \u201cI encourage parents to start explaining the different aspects involved in property to their kids from an early age,\u201d Muttik revealed. \u201cFor instance, I\u2019ve told my own kids that building a house starts with purchasing land to build it on and then designing the house itself. Obtaining the finances you need is important as well, for construction or development and purchasing alike. In addition to a general understanding of how property works, this sort of knowledge could get youngsters thinking that maybe one of these stages is something they\u2019d be interested in and want to succeed in when they grow up.\u201d Roosaare adds that he sometimes takes his children with him to the company\u2019s building sites, and that he explains the nature of the rental market to them so that they have a better understanding of how real estate can earn people money.<\/p>\n
The first house Muttik built in order to sell was completed when he was just 24 years old. \u201cBefore that, I tried making money by doing construction work on the side while I was still at school, but I soon realised I\u2019d rather be an entrepreneur,\u201d he said. \u201cThat led me to set up my own company, which was involved in roads and private homes.\u201d Roosaare took his first steps in the world of real estate when he was 28. \u201cSome friends and I renovated an apartment in P\u00f5hja-Tallinn with a view to renting it out,\u201d he explained. \u201cIt was a big success.\u201d<\/p>\n
Both men note that another option when it comes to investing in the property sector is to acquire shares in real estate companies. \u201cYoung people don\u2019t have the money to start their own property development businesses straight off the bat, but for a small amount of money anyone can own such a company, or part of it anyway, through shares,\u201d Muttik said. \u201cAnd everything you analyse when deciding which company to invest in will provide a good overview of the sector as a whole, giving you a better understanding of the background to real estate when making bigger investments in the future.\u201d<\/p>\n
Preparation is the basis of all things<\/strong><\/p>\n But there are a number of aspects young people should take into account before diving head-first into the real estate sector. The first thing they should do is assess their financial situation and confidence regarding the future.<\/p>\n \u201cBuying a property involves a variety of costs, including the deposit, your loan repayments, insurance, upkeep and repairs, and taxes,\u201d Muttik noted. \u201cSo it\u2019s important to make sure you\u2019ll be able to cover those costs so as to avoid your investment becoming immediately unprofitable.\u201d He also says young people should look at prices and the market conditions and consider the importance of location. \u201cA good location can have a huge impact on the value of a property and its future returns,\u201d he said.<\/p>\n Roosaare adds that if a property is being acquired for immediate rental, then it is important to think about the target group. Would they rather short-term renters or long-term tenants? Would they prefer families, or do they have no particular preference? \u201cThis will give them an idea of whether, for example, they should choose a home on the outskirts of the city with lots of green space around it,\u201d he advised.<\/p>\n Muttik concludes by saying that real estate can be an important way for young people to build up their financial security and invest in their future. \u201cBut it\u2019s a decision you should weigh up really carefully, taking into account your financial situation, lifestyle and goals,\u201d he cautioned. \u201cOwning property can be one way to gain financial security and achieve your future plans, but it requires a lot of preparation and informed decisions. Owning a home is an expense, but it\u2019s also an investment in your quality of life and sense of security, and not one that should be underestimated. At times it can be more important than some financial figures on an Excel sheet.\u201d Roosaare adds that property can provide more than just the usual returns. \u201cIt can also offer \u2018lifestyle dividends\u2019, especially at the higher end of short-term rental market,\u201d he said.<\/p>\n