I bought my first home at 24, but I hear from so many fellow millennials that tell me they’re never going to buy one of their own. The excuses I hear range from it’s simply too expensive to buy a home, it’s completely unattainable, my student loan debt is too much, and it’s dumb to tie yourself down like that.
Well, buying a home is a key way you can get ahead financially, and here’s why.
Zillow recently published a report that outlines exactly how long it would take you to rent to make it worth buying a home instead. In most parts of America, it would only take you 2 years and 1 month of paying rent before it would make more sense financially for you to buy a home outright instead.
And before you start to protest and say you live in a major city that’s completely unaffordable, keep reading.
If you live in the Manhattan area, it only takes 2 years and 5 months. Los Angeles? 4 years and 7 months. San Fran? 4 years and 9 months. Chicago? 2 years and 2 months. This really puts things into perspective, doesn’t it?
The bottom line is, if you’re not spending money on rent and instead put your money towards a home, this is a major investment. Your money is working smarter for you now. Another interesting statistic I want to point out to you here is that people who own their own homes are worth forty times more than people who rent their homes.
But What About Debt?
If you’re in a lot of credit card debt, this is the only debt you should be really concerned about paying down before trying to invest in a home.
If you have accumulated a lot of student loan debt, don’t even worry. Welcome to most of millennial America right now.
Speaking of right now, flexible mortgage options are out there, in addition to some shockingly low down payments (we’re talking as low as under 5%). Do your research and you’ll definitely find something that can fit your finances!
What Kind Of A Home Should I Look For?
Let’s talk about what kind of a first time home you should be looking for. Your first home probably won’t be your dream home, and that’s ok. You want to buy with an exit strategy, so take into consideration how many years you might want to live there before moving on. Or maybe you will have enough money at that point to keep your starter home and rent it as you buy another one.
Pick a home that can potentially increase in value, that is in a great school district, or a desirable area to be in. All those things add up to being able to easily sell your starter home when you’re ready to move on.
Don’t pick a dump, or a home that needs a TON of work. Contrary to popular belief, this can be an enormous money pit. I love HGTV as much as the next girl, but do it yourself home improvements are far from looking as easy as they make it on TV. A home that requires minor cosmetic changes such as outdated appliances and cabinetry, or ugly paint colors and flooring are more stable choices than homes that have clearly not been taken care of at all or require major overhauls like replacing entire kitchens and bathrooms.
Make sure you get pre-approved for mortgage, so you can understand your budget better. Whatever the amount you get approved for is, make sure you don’t go for the full amount. You don’t want to be struggling to make your payments and barely scraping by, because not only is this not worth the stress, it completely defeats the purpose of buying a home to get ahead financially.
Bre is a female millennial go getter residing in New York. One part entrepreneur, one part geek, she obtained her degree in Textile/Surface Design from The Fashion Institute of Technology.
She has held some exciting roles in both fashion as a designer working for brands like Victoria’s Secret and Henri Bendel, as well as in ad tech working for publishers like Ziff Davis.
Today she operates her own luxury label and is also the Chief Chick at Chipchick.com which reaches millions of women each month.
Bre is passionate about keeping women informed of the latest technology trends and products to improve their lifestyle and believes in providing real, useful information and advice to her readers.