Millennials and Generation Z are fast becoming the biggest groups applying to be first-time home buyers, creating exciting new opportunities for investing — but just as there are some amazing financial benefits for young buyers, there can also be some significant risks.
How can novice real estate buyers navigate these pros and cons?
More often than not, younger people who don’t know much about the process of buying a property, which leaves them exposed to being misled and even defrauded.
“It’s a highly competitive market for buying homes, and if you’re just starting and thinking about getting your first property, having the right help can make the difference between moving into your dream home or losing out or being trapped in a bad investment with punishing mortgage rates,” says Ariyan Miller, the Millennial Mindsetter.
Ariyan’s company offers real estate consultations, agent services, and loan origination help, and she’s sharing top advantages and potential perils that young buyers might experience. Based off her experience, Ariyan shared these insights on the obstacles and opportunities young real estate buyers are facing when looking at homes in today’s market.
As with anything worthwhile in life, obstacles are always in the way between you and your dream life. With the current market conditions, this principle rings true. However, even with the costs of houses going up, we can’t overlook the benefits of getting into the market now.
Young Real Estate Buyers Can Enjoy Unbeatable Benefits
Great investment: Despite the concern about fluctuating property prices, buying a home is usually considered to be a great investment. As a young person, you’ll be taking a fantastic step forward in ensuring your future financial stability by buying, rather than renting, a home. If you’re making your mind to purchase then you might consider Homes For Sale In Bardstown, KY.
Total privacy: One common complaint renters have is that their landlords can suddenly show up and either let themselves in the property or demand to be let in so that they can perform random inspections or work. This completely wipes out your privacy, but if you owned your own home you wouldn’t have to worry about this.
Property appreciation: If you’re willing to keep your home for the long run, its value should grow significantly over the coming decades as the price appreciates. And you could then sell it and buy another home, or rent out the property to earn more income – it’s a real money maker.
Paying yourself: Some young buyers make the brave decision to purchase a home after realizing that the amount of money they pay on rent each month is equivalent to what they would owe with a mortgage. Instead of giving hundreds of thousands of dollars away to a landlord each month, spend that money on a mortgage and invest in your future. When you rent, you’re just helping your landlord pay their bills and mortgage interest, and you earn absolutely no equity in their property no matter how long you live there. It’s much better to switch over to owning your own home so that the same money can be spent to pay down your mortgage.
Making money: You can even become the landlord with your new property, depending on your financial situation. After living in your own home for several years, you might be in a position to buy a second property, which would free up your existing home to rent it out. This means you can earn additional income from the monthly rent that you would receive, which can further help to pay down your mortgage and even open up the potential of buying a third home.
Tax advantages: Nobody likes paying taxes, and the good news about owning a home is that you can claim mortgage interest and other property expenses as deductibles on your annual tax filing, which in turn might reduce the amount of tax you owe and maybe even produce a refund. For example, obtaining a Tax Depreciation Schedule Brisbane for newer properties can give you yearly tax deductions for up to 40 years.
Long-term stability: So long as you keep meeting your monthly mortgage payments, owning a property is a great way to ensure housing stability for you and your family. By contrast, some landlords have been known to suddenly list their property for sale, and if you’re renting you’d have to move out quickly. Owning a home ensures you won’t have to worry about such instability.
Low-interest rates: Mortgages come with interest which is the extra that you pay your lender on top of the baseline value of the loan, and current interest rates are incredibly low, which makes mortgages more affordable, particularly for first-time young buyers on limited budgets.
Pride of ownership: There’s nothing comparable to the pride you’ll feel at being able to say you are a homeowner, and you’ll take great care of your property. It’s difficult to say the same when you’re renting, because you’re essentially borrowing someone’s property for a set amount of time and have no ownership stake in it.
Complete freedom: Landlords often impose all manner of restrictions on their tenants, such as banning parties, limiting what kind of pets you can have, and even preventing you from redecorating rooms. When you own a property, you have complete freedom! You can paint a room any color you like, you can have friends over for entertaining whenever you want, and you can live without having to comply with any restrictions from a landlord.
Don’t hesitate to reach out to Ariyan Miller, the Millennial Mindsetter, if you have any questions on how to jumpstart your buying journey and are ready to take advantage of today’s market.