I’m 20 years old, what is the best real estate strategy?

Question

I’m 20 years old, have around £8k saved and earn around £23k from an apprenticeship I’m currently on. I’m from the UK so maybe the exact rules of real estate in the USA don’t apply in the uk but I wanted some advice from the experts and I think this is the best place to get it. My strategy to make money from real estate is this: buy a house with high value potential in a nice area that is run down and in need of repairs, invest money repairing the house and then rent out the house for extra income, take the equity from the house by financing the house and then using that money to buy another house and repeat the process.

what I want to know is, how realistic is this, and is this the best strategy to make money from real estate. By the time I’ve finished my apprenticeship I’ll be 22 years old and on a good salary and I can do overtime to increase my income, I should have around £20k saved by then which would be enough for a deposit on a house. I know most of you all here are Americans which means some of the laws are different but if you could help me and give me some advice I would appreciate it.

Michael Thach · Answer

The core strategy and methods used is like a BRRRR. It's possible to copy them in any country. The problems I see

- UK is tighter with refinance loans, so getting loans close to your home value is very though- solution to this is buy, renovate and sell... increase your cash amount first. BRRRR sounds good but is slow, when you need to wait 3-5 years for it to appreciate so high, that you are allowed to refinance and get the amount back which you put it. Remember banks won't give you a loan right after you rent out your property after renovation. They want to see the tenant in there for at least 2 years.

- Not sure if 20k pound is enough for down payment and renovation, this seems tight. Is hard to buy in a nice area, even run down properties will not be cheap - but no problem go and find properties which match your budget

There is no right or wrong in real estate investing, there are more ways which will get you bigger cash amounts, then there are ways which gets you passive income, then there are ways to reduce your taxes and then there are ways to let it appreciate and tap into like a piggy bank when you need. So there are so many ways to invest and each investor need to ask themselves what they want.

Your described a slow but high ROI investment way. If you plan to do real estate as a side hustle and preparation for retirement then this play is fine. If you want to do real estate fulltime then you need to change the strategy.

I’m 20 years old, what is the best real estate strategy?

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