Millennials should Trade In the Rent and Pick Up the Investment!
Millennials make up a big part of the city’s population and workforce. Every year, more and more graduates are thrusting themselves into every aspect of adult life except for home ownership, and understandably so. For millennials, purchasing a home is a daunting endeavor. There’s so much that goes into it that most don’t know where to start. A large majority believe they simply can’t afford it or that there’s no point to it when they don’t have a family in need of their own space.
Most people of this age group choose renting over buying because of the insecurity and instability that is sometimes felt in the job market and in their lives. There’s no problem with that at all. We are part of an age group that doesn’t want to be shackled to one place. We also prefer to rent closer to the main stopping points in the city because location means everything. The problem with this idea is that there is no foresight into developing any type of financial worth, and plans to build a strong portfolio fall by the wayside.
Renting can be summed up as literally throwing money into a pit and never seeing it again. With rents shooting through the roof around the country, millennials have seen their paychecks get gobbled up in addition to their hefty college loan payments.
Living at home with mom and dad has its perks…
Another millennial reality: moving back home with mom and dad. According to a study done by Zillow, about 21.2% of millennials live at home with their parents. The rise is attributed to a sluggish job market and rising rents as we already covered. This particular situation works in their favor every time. There is essentially a rent-free period (unless your parents want contribution every month) where a large portion of income can be put away for a down payment on a home.
You might not be in the city or living with your parents forever, but that’s exactly why you need to start looking at purchasing a home as an investment rather than just a place to stay.
The truth is we are not going down the traditional path in almost every way. Millennials are statistically not getting married young, not starting a family young. So why would we buy a home with extra bedrooms and bathrooms that won’t be used?
The hypothetical question above is one of the mental hurdles that must be cleared in order to make way for long-term financial plans. Despite not having a family to occupy the home with you, why do you need to be the one to occupy it? Real estate is something that increases in value and gains equity. It’s something that isn’t going to go anywhere and a mortgage payment (with a fixed APR of course) will never change! Can you say the same about your rent that is most likely increasing at the end of your lease?
Houston is still cheap enough…
Purchasing a home in Houston is already an advantage due to the fact that the city has some of the lowest average home prices in the country. It’s more affordable all around, and since property values tend to increase steadily over time, it’s a good idea to try and purchase a property when the monetary responsibilities we have still aren’t as demanding as they would being married or having children.
At a time when things seem the most uncertain, there exists opportunities to build something durable. Wealth through investing is the answer. It’s very smart to start early and begin creating more cash-flow strategies than to continuously throw money into a rent pit, or watch as everything skyrockets in price and you didn’t catch a slice of the pie while there was some. As much as real estate can last a long time, the city is susceptible to the rest of the nation’s tendencies. That can mean cheaper opportunities disappear and there is no longer an alternative. Houston is the ideal city to take advantage of in terms of real estate. An early start is the best start.