Millennials are facing a unique property investment horizon compared to their predecessors. We speak to a Generation Y property educator to find out what these challenges are, and how they can best be overcome.
Ayda Shabanz is a young property investor and has seen how other young investors have gotten their investment journey on the wrong foot.
Speaking to Smart Property Investment, she shares three major issues Millennial investors are facing in the market, and how they can tackle them:
Everyone faces their fare share of debt in their lives, but Millennials have been faced with new technologies that make accruing debt all the easier.
“A lot of young people have credit cards, they never got taught about how to manage them,” Ms Shabanz said.
“One of the biggest things is the bad debts that they have and understanding how to reduce them, eliminate them and manage them, because those debts are probably one of the reasons they can’t save, and … it might reduce their ability to obtain a loan to invest in property.”
Ms Shabanz recommended investors need to change their mindset away from being able to immediately getting what they want and focus on saving.
“So that’s one of the things that Gen Ys are facing, to try and shift their thinking from that whole, 'Get anything I need, now' through credit cards, easypay [and] Afterpay,” she said.
The second major issue Ms Shabanz identifies as a major issue for Millennials is the desire to live in areas with attractive lifestyles located in unaffordable areas.
“The suburbs that most people live, they want to live where there’s the cafes, the things to do, closer to the city or CBD,” she said.
This is possible, but Ms Shabanz recommended for Millennial investors to consider rentvesting, by renting where they want to live and investing where they can see the best returns.
“Whether you’re continuing to buy property or not, it’s about where can you afford to buy that’s still going to produce a good return for you,” she said.
Growing up with technology, Millennial investors know how to use it to their advantage, but this can result in information overload, the third issue Ms Shabanz sees in Millennial investors.
“Back in the day when I started, you would ask an expert, and then you would listen to the expert and do what that person told you,” she said.
“Now, people have access to so much information, you’re Googling, you’re getting thousands of different responses.
“People are just getting too much information that’s confusing them and they’re not able to make a decision.”
By taking a step back from the technology that surrounds them, investors will be able to help clear the air from all these responses and find a moment of investment clarity.