Jonathan Scott of Property Brothers reveals that there's no secret formula to successful real estate investing; advising on how to determine if you're prepared to make a purchase.

At a recent CNBC Your Money event, Jonathan and Drew Scott, the Property Brothers, still believe in the potential for wealth growth through real estate investing, but emphasized the importance of considering certain market factors.

Jonathan stated that he believes in homeownership as a wise investment.

Jonathan advised that individuals should only invest in property according to their own timeline, rather than being influenced by the desire to keep up with others or make a quick purchase.

"If you wait a few years and get your finances in order, you can save up a little before making a decision on buying a property."

Recent homebuyers often experience buyer's remorse, with 82% of those who bought homes in 2023 or 2024 having at least one regret, according to a survey by real estate company Clever. The most common reason for regret among these homebuyers is choosing a home that requires excessive maintenance, while nearly a quarter said they paid too much or accepted an interest rate that was too high.

What to consider before buying a home

It's wise to accept that you may not be able to time the market perfectly when buying a home, as finding a home in your price range and securing the best mortgage rate will depend on both your financial situation and the broader economy.

Jonathan stated that investing in real estate and purchasing a home is not a complex task. He emphasized that many individuals believe there is a secret formula to achieve success, but in reality, it boils down to budgeting.

The cost of a 20% down payment on a U.S. home, according to Federal Reserve data, is approximately $80,000, which is not an easy expense to cut back on.

If you want to save that much money, you may need to make significant changes to your lifestyle, such as sharing an apartment or finding a part-time job. Additionally, it's crucial to have a good credit score before applying for a mortgage.

Before beginning your search, ensure that your expectations align with your financial constraints. You may need to adjust your preferences for location, size, or amenities in order to stay within your budget.

Entering a difficult market

The Scott brothers concur that entering the real estate market at present is a challenging task.

Goldman Sachs and Fannie Mae predict that home prices will increase by around 3% to 5% in the upcoming year, while mortgage rates are expected to continue dropping. However, despite the return of almost normal year-over-year inflation growth, the prices of essentials like rent and groceries remain significantly higher than several years ago, making it challenging for first-time homebuyers to save.

Jonathan advised finding creative ways to enter the market, such as buying a home with friends or family members other than a spouse.

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