Loveland – Millennials don’t seem as interested in home ownership as past generations. Perhaps it’s their large amount of student debt, the desire to pick up and move at any time or the fear of commitment. Homeownership may not seem appealing, but here’s why it should be a priority for millennials.
The path to financial freedom
Student debt may seem a bit overwhelming. Millennials may not think that they can afford to buy a home given their high debt. What they don’t realize is that a home could be their quickest path to reducing or eliminating that debt. Here’s how.
In an inclining market, home ownership allows you to quickly build equity. That equity could be used to pay off student loan or other higher interest debt. Real estate always increases in value over time (as shown through historical statistics), but real estate in an inclining market does so in a much shorter amount of time. Millennials can capitalize on this opportunity.
Additionally, rent is essentially a wasted expense. There is no investment or potential return. When you own a home, part of each mortgage payment goes to paying down the principal balance. In essence, you are putting money back into your own pocket.
Keeping more of your income
There’s nothing more frustrating than seeing how much of your income goes to taxes, especially when you could use that money for many other things (such as paying down student loans). Owning a home may allow you to keep more of your income. Through different home ownership tax breaks, the amount of taxable income (and therefore taxes due) is lower if you can itemize deductions. Speak to an accountant to learn more.
Alternatives that fit your lifestyle
Millennials tend to focus on enjoying and experiencing life, so maintaining a home isn’t exactly desirable. Fortunately, there are alternatives. Condominiums, for example, typically include exterior maintenance as part of their condo fees. Additionally, buying newer or renovated properties can reduce needed repairs.
Something to be proud of
Lastly, owning a home can be an extremely rewarding experience. You are no longer stuck with white walls and limited décor. With home ownership, you have the freedom to paint and decorate as you wish, making your home a reflection of your personality and something to be proud of.
By Suzanne Plewes, RE/MAX Allliance in Loveland. Suzanne Plewes is a broker associate at RE/MAX Alliance. Write to 750 W. Eisenhower Blvd., Loveland, CO 80537, call 970.290.0373 or e-mail email@example.com.