Over the last few years, there has been a tremendous uptick in investment interest from younger and younger people. We’ve just witnessed the massive hype surrounding GameStop and other meme stocks in the USA that highlighted just how passionate young retail investors can be when they sniff an opportunity. You wouldn’t have seen that 20 years ago, it seemed to be an older person’s game.
But the internet and a number of FinTech disruptions have been slowly breaking down that stereotype and making it easier and easier for young people to start investing seriously. For the most part – stocks, bonds, and cryptocurrencies have been democratized – meaning that if you are in your 20s you can have a full investment portfolio without much fuss.
But what about real estate?
Real estate remains one of those industries with tremendous potential and a proven track record over the long term, but it’s traditionally been the playground of the rich – because of the amount of capital you required to play any meaningful role in property deals. It wasn’t something that someone in their 20s could even get near.
But this is changing and changing fast.
There are two key disruptions that have turned this asset class around and made it a viable opportunity for people in their 20s, even with limited buying power:
- REITS. Around the world we’ve seen professional property companies listing REITs (Real Estate Investment Trusts) which pool a number of property investments into one financial instrument and then allow individual investors to buy shares in that company. Someone in their 20s can go to their local stock exchange and purchase equity in those trusts and get exposure to the real estate performance of those portfolios. You only have indirect exposure of course, and you don’t have any say in what properties form that portfolio, but it was the first step towards democratizing these investment opportunities.
- Crowdfunding. The more exciting one is that of crowdfunding, where someone in their 20s can contribute a small amount of capital which is pooled with a large number of other investors to reach a critical mass that can then invest directly in property. Platforms like Stake are doing this at a significant scale and making it incredibly easy for individual investors to pick certain properties that they believe in and making direct investments into those places, without breaking the bank. For those in their 20s, these sorts of platforms offer tremendous control and flexibility while not requiring huge capital investments to get started.
These two innovations are likely the first of many as we see real estate investing become something that someone in their 20s can add to their investment portfolio. The world is shifting fast and the internet is making possible vast collaborations that are going to change the way we think about real estate in general. If you’re in your 20s right now, you should be seriously considering getting involved – the opportunities are too good to miss. Get started with Stake or one of their contemporaries and get started with real estate investing today. Your future self will thank you.