One of the most unique and inexplicably happy events of life is having a baby. This little bundle of joy keeps everyone on their toes, creating madness around the house and your lives, but somehow, it all seems worth it.
As a parent you likely already have a retirement fund under your belt, but have you considered alternative and traditional ways you can invest your extra cash to protect your children’s future? In fact, it’s easier than ever to invest in Real Estate with technology and options for obtaining mortgage loans even if you’re not a citizen of that country.
Investing in property is largely seen as a safe way to build wealth, but it is a long term strategy. The younger you start, the more effective it is, thanks to leverage (borrowing from a bank) and the power of compounding (time). For example, if you acquire a property for $500K at age 20 and it grows by a conservative 5% per annum, it will pretty much double by the time you are 35 to $1 million. How many people have $500K of equity at this young age? And by age 50, it will be worth 4 times what you paid for it, at $2 million. If capital growth is 7%, then the property will double in value every 10 years, thus accelerating your portfolio dramatically.
Should I invest in my own home country, the United States, U.K., Australia, or emerging markets? All the investment opportunities available can be overwhelming. We understand. So, to help you filter out the noise and make informed decisions, Global Mortgage Group has mortgage options parents should consider as great places to invest in Real Estate for your, and your children’s future:
Commercial Real Estate
We often think of real estate investing in terms of home ownership or maybe “house flipping,” but there are lucrative opportunities too in the commercial side of the industry that are no longer exclusive to ultra-wealthy investors. Online real estate platforms make it possible to invest in commercial real estate without ever stepping foot inside a property or country it is being sold in. Of course there needs to be a “trust” issue with investing in an asset, however, through online reviews, personal recommendations and proper research these risks can be mitigated.
A recent survey asked global participants to choose how they would invest $10,000, and real estate was the second most popular choice among millennials, Generation X, and baby boomers. Nearly 23 percent of those surveyed said they would pool their $10,000 with money from other investors to purchase Real Estate.
When you’re first starting out, a smart strategy is to focus on one type of investment, whether it be apartments, offices, retail, land, etc. A popular type of commercial real estate is student housing units — the very places you might be paying rent to when you send your kids off to college. Student housing in many University locations throughout the U.S. can be extremely lucrative investments.
Residential Real Estate
As a global citizen, if I wanted to invest in Singapore, Hong Kong, Seoul, Bangkok, Shanghai or any of the major global cities such as New York, San Francisco, London or Sydney, the barrier to entry would be my purchasing power and the ability or inability to obtain leverage from a bank or private lender. However, as an example, in smaller cities around the United States there are millions of Real Estate options for investors that never imagined they could own Real Estate, let alone be a Global Real Estate Investor.
Global Mortgage Group’s only focus is on sourcing the best options for non-citizens or Expats looking to obtain a mortgage loan to purchase or refinance Real Estate on a global scale.
"As many of your children will attend school in the U.S., Australia or the U.K., obtaining a mortgage loan to purchase residential (or refinance) property in the U.S., U.K. or Australia just became that much easier."GMG Partners
Our partnership with institutions and private lending partners has made us the premier “go-to” source for real estate investors. Residential homes are the easiest to qualify for and a great way to build your portfolio.
The difficulty is the starting point, as young people rarely have enough for a large down payment for a first property. The good news is, most of our U.S. and Australia mortgage loans only require a minimum down payment of 30%. Note, that is 30% of a property with a purchase price far less than you could buy in Hong Kong as an example.
The opportunity is amazing to build and grow a viable Real Estate portfolio without a huge capital expense. If well researched, and with the right advice, a property can be cash flow neutral or positive in the current market. If held over time and as rates will likely increase globally changing the current economic model from a buyers to a renters market, it should remain quite manageable.
If you acquire several properties over time, manage properly and leverage smartly, imagine the amount of equity you can build up by the time your children are an adult or, when you’re ready to retire!
For more information on mortgage loans in the U.S., Australia, U.K. or elsewhere please email Global Mortgage Group at [email protected]