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Most parents would love to give their children a head start in life by helping them make a sound investment in the property market. But even if you can’t help them financially, you can give them good advice and equip them to make wise decisions as they journey out to find their own financial feet and delve into the world of property investments.

Here are five valuable lessons to teach your children about property investments.

  1.        The sooner you save the quicker you can make an investment

Most young adults who are earning their first salaries are tempted to spend their money on luxuries such as clothes, hobbies and entertainment, leaving little room in their budget for savings. This may be fun at first, but many of them will regret this decision later on. Remind your children of the importance of creating goals and saving to achieve them. If one of their goals is to buy an investment property, help them research the costs involved in such a venture, and how much and how long they will have to save to be able to afford it.

  1.        Patience is a valuable investment virtue

We live in a world where we seek instant gratification and success, but in order to make a wise property investment, your child may have to wait to get their finances in order or for the right opportunity to present itself. Teach your children to not seek quick financial rewards, but to make wise decisions by saving enough for a comfortable investment, waiting for gaps in the market, and giving their new investments adequate time to show growth.

  1.        Always plan and research

Most successful and profitable property investments are usually made after careful planning and research. Encourage your children not to make emotional or hasty investments, but rather to read up on property investments, to get to know the market, and do thorough research that will enable them to make informed and sensible decisions.

  1.        Buy what you can afford

The world of property investment is a vast one, with many different types of properties and opportunities to invest in. It may look attractive to buy the best and biggest, but the consequences can be harsh if you can’t afford it. One of your children’s investment strategies should be to shop within their means. Teach them the value in starting off small (or as big as they can comfortably afford) and working towards bigger goals once they reap the rewards of their first investment.

  1.        Work with people who can guide you

As parents you may be able to provide some guidance and assistance to help your children get started in property investments, but if you’re not a professional it’s also wise to step back and let an expert guide them when necessary. Teach your children to surround themselves with people who can provide insight, mentorship, advice, and even share the financial obligations as part of an investment team.

The world of property investment can be daunting to inexperienced buyers, but it doesn’t have to be. 

Main image source: Shutterstock

  • Great tips.
    We are on such low income that we can’t afford to buy even one property ourselves. However we never buy things we can’t afford and are never ever in debt.

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  • a NOTHER GREAT IDEA. I have lots of these at home.

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  • Great ideas to keep in mind, thanks.

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  • These are great tips. I also think we model good behaviour for our son and always explaining we prefer not to be in debt, but buy things (large items) with our savings etc. We’ve paid off 2 mortgages through hard work and good management and I think that has taught him what is possible.

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  • Great tips – my daughter ended up owning 7 houses and has never looked back. It can be a great extra source of income if you do it correctly, and I think it can still be done in this day and age if you strive hard to attain it.

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  • Always stick to a budget and do not over extend.


    • Also; thanks for sharing these lessons, always good to be reminded.

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  • These are good points… But I’d also say budget for some fun while you’re young.

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  • What i am finding is that young people seem to think that their first home is supposed to be their dream home. They want it all perfect and pretty and I find that amazing. Our first home was a dump that we gutted and slowly renovated to sell and use as a stepping stone.

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  • We need to remember that first time investment in property you aren’t going to live in first can have disadvantages. Interest rates are higher. If you aren’t living it you are also paying Land Tax which can be thousands of dollars.
    If you later buy a home to live in, I don’t think you will quality for the ordinary home interest rates as you already have one. IF it is still in place you won’t qualify for the first home savings Govt. grant either. (I can’t remember the exact name of it or whether or not it is/was Aust. wide)

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  • we have already set up two accounts for our girls, one is their school banking accounts and one is one that they cannot touch until they are old enough that we contribute to, this is the one we are using to save to contribute to their own house deposit.

    We are making sure that they will be set up and in a better position that us for that big first home purchase

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  • Your advice is sound, I would also suggest not to put all their eggs in one basket. Once they have there bricks and morter, may I suggest a share portfolio as well. The right shares can offer good returns and if you need money in a hurry, you can cash them in and get your money in 3 days, where with houses it can take quiet a while to sell. I would not recommend selling good quality shares, exept in an emergency, as with houses they need time to mature and get the return. Again, seek advice and do your own research. This will give your children a more balanced investment portfolio and an other investment stradagy.

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  • I think this is a great article for anyone wanting to get into property.

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  • Very solid good advice and worth discussing with kids. thanks

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  • These are great tips for adults as well!!

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  • Very important points you made in your article! Thanks!!

    Reply

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