Money Tip of the Week: 2 tips for investing in real estate from a millennial millionaire
Todd Baldwin knows a thing or two about investing in real estate. From converting his basement into a rentable apartment to buying homes to rent out on Airbnb, he’s used real estate deals to boost his income on the way to a net worth of more than $4 million.
Here are Baldwin’s top two pieces of advice for building wealth through real estate.
Get your finances in order before buying. For Baldwin, that means stashing away cash by cutting your living expenses. To this end, consider roughing it for a bit when you’re young, says Baldwin. “You can get roommates when you’re 22; you won’t want them when you’re 42.”
While you’re piling up the extra cash, work on polishing your credit score, he says. Putting everyday purchases on a credit card and immediately paying it off can help.
When you’re ready to buy, be picky. Baldwin has never lost money on a real estate deal, and credits this success to his selectivity in choosing investments. He won’t buy a property unless it meets five criteria:
1. A bedroom-to-bathroom ratio of 2-to-1 or less
2. Enough parking spots for the expected number of tenants
3. A location going through a transition, such as an uptick in new businesses opening or a new grocery store going in nearby
4. No homeowners association fees
5. Close proximity to public transportation