More than ever, millennial women are taking a leap of faith and investing in real estate without the help of a partner. Whether they are just out of school, an established professional in their field, or starting fresh after ending a relationship, the interest in financial freedom and empowerment is a tangible buzz in the air. The options truly are endless when it comes to an investment in property, however I am seeing 3 main trends for women breaking into the real estate market. As a licensed real estate professional, I am here to share the trends that I've seen when working with my clients - along with some of their pros and cons - in order to help you make the best choice in your purchasing decisions.
The income property opportunity is something I am seeing a lot of women aim towards. Typically speaking, I am seeing women purchase a 2-unit home (usually a bungalow) in order to live in the top level, and rent out the bottom.
PROS - this gives you the ability to scale back (or pay faster) on your mortgage payments -if you choose your tenant wisely, you have the safety consideration of someone being close by -this can be a long term investment for retirement- keep the house and rent both levels when you are ready to move on, and sell it down the road when the mortgage is paid.
-2 unit homes are particularly in demand at the moment. Catch the market at the right time, and you may stand to make a decent profit if you choose to sell.
CONS -you are responsible for the maintenance and upkeep of your tenants unit, and you do not necessarily have the ability to put off the problem until you’re ready to pay. -you need to strongly consider who your tenant is. Your safety and happiness should be #1 priority, and the wrong tenant makes for a big headache.
-In New Brunswick, choosing to keep the property after you move out will result in you paying approximately double the taxes on it annually, so the margin for profit can be low in a 2-unit.
A she-shack is a home that is cute, but very small in square footage. Perfect for Pinterest inspo. I am seeing more and more women breaking into the real estate market and purchasing a home that is small in stature with a light price tag (think 150k and under).
PROS -Price point. Owning your own home comes with hidden costs, and purchasing something small but updated will leave you the extra wiggle room for the items that come up. Maintenance, heating, surprise repairs, etc.
-Less square footage = less to furnish and clean. Buying a smaller home allows you to make it your own cozy space faster, and let’s be honest, less cleaning is just better.
-A lower price point typically means a lower margin for profit when you sell. This means that when it comes time to move forward, you shouldn’t expect to pad your pockets.
-Less square footage also limits your buyer pool when it comes time to sell. Small homes cater to a small market, so if the right buyer isn’t looking when you decide to hit the market, your house may sit on the market longer than you hope for.
-Lack of storage. Smaller homes typically lack in the storage department, and you will surprise yourself with the amount of STUFF you have. Time to Marie Kondo your life.
HGTV has made us obsessed with the idea of flipping houses. You can see yourself now, looking cute in a helmet and goggles while you laugh and knock down walls with the sledge hammer. Adorably picking out wallpaper to match your beige couches. Laughing as you accidentally get paint on your arm painting the ugly walls. While flipping can be a profitable and fun endeavour, I gotta get real with you.
PROS -if you do it right, the margin for profit can be good and a great way to get some extra cash and build that financial portfolio! -you will be able to learn so much about hard work, and self-reliance through this process. You made a commitment and now you get to see it through
-There is a huge sense of pride associated with a successful flip. This is your creation, and now it’s making you money. That’s pretty friggin' cool!
CONS -done wrong, and you may be in the hole more than you expected. You need to be very savvy about renovation costs, the current real estate market, decor trends, and what the general public wants in a home in order to complete a successful flip. Get it wrong, and you may be out more money than you bargained for.
Tip for Flips: engage with the correct professionals and know your numbers before you jump the gun on gut instinct alone. Flips and renos gone bad are a contributor to bank foreclosures - don’t put yourself in that position.
These are the 3 main trends I am seeing with women breaking into the real estate market, sometimes it’s just one, and sometimes it’s a combination of a couple strategies! While there is no “right way” for everyone, one thing I am sure of is that engaging with the right professionals before you start the process is the best way to make the right choices and keep you sane while you go through this journey.
My advice? chase after your dreams aggressively, and believe in yourself fiercely. Xo