It seems like owning their own house is a holy grail for most millennials; a seemingly unattainable dream, yet they have heard tales that such a feat is possible.
However, is the thrill of achievement a good reason to spend most of your hard-earned money on the property?
Owning real estate isn’t the sure-fire investment that it used to be, and there is a good chance it isn’t the great deal most people think it is. Sure, renting might get frustrating at times, but is it really as bad as you think?
#1 The market could crash again
Even though nearly ten years have passed since the last financial crash, the fear of another real estate bubble bursting has never really gone away.
Unfortunately, those fears might be justified.
For years now, economy watchers have fretted over the run up in student loan debt, while more recently the collapse in junk bond prices had analysts drawing parallels to what happened in the subprime mortgage market in 2008.
Other signs of another crash on the horizon include zero or low down payment mortgages, an increase in real estate prices despite the stagnation of incomes, which points to people getting in over their heads.
Some financial institutions have once again begun selling mortgages bundled into securities or funds, which should trigger alarm bells.
#2 It will still never belong to you
Your goal might be to have a place that is completely yours, where you don’t have to ask a landlord for permission to paint the walls a dramatic color.
Unfortunately, it will take years before a house belongs to you; all it takes is one miss mortgage payment and the bank or your lender could take away your house a collateral.
#3 You can’t really afford it
No matter how much your financial situation improves, all it takes is a big expense to have you struggling again. Sometimes the house is the expense that sets you back.
Even if you’ve saved enough for a down payment, this doesn’t mean you have enough money left over to cover any extra costs, such as closing costs, or any potential repairs.
#4 You’re responsible for everything
When you’re renting, your landlord or their management team is responsible for the repairs and any other unexpected costs of owning a house.
Most rented accommodation is now under the management of real estate investment trust companies like Invitation Homes, so tenants can be assured that there is a high standard of care within the neighborhoods, with homes that are modern and well-maintained, and located in desirable neighborhoods.
Would it really be so bad raising a family here?
#5 It’s not future-proof
You might not think about it now, but you will have to retire one day. The only way your home will be a good investment is if the value increases in time for you to cash it in for a quick retirement fund.
This is a huge gamble that might not pay off if you don’t have backup plans in place.
So are you interested in buying a house? What is it that has you concerned with buying a house? Share your thoughts in the comments below.