A home for the hopeful millennial
Being a millennial should not hinder you from aiming for that dream home.
Buying a home is a step that favors the brave. For many, the idea of purchasing a property requires heaps of money and a lot of risk.
Sometimes, it takes numerous years before we can realize our dream home. For millennials, in particular, the reality of purchasing a house may seem like an unreachable task. More often than not, many of us resort to renting spaces or living with parents instead due to income restraints.
What many of us don’t realize, however, is that buying a home might be difficult, but not entirely impossible at our young age. Sometimes, all it takes is a good attitude and a realistic game plan.
Identify your goals
Before you choose a property, it would be wise to consider your motives in buying a home. Are you aiming to acquire your dream home already, or are you looking to make a sound investment?
According to Chantel Bonneau, a wealth management adviser, many millennials are focused on buying homes for the short term. Consider first your goals and financial standing before investing in real estate.
If the goal is to start living on your own, think like a utilitarian. Consider purchasing a starter home. This property might not be the one that you will grow old in, but it can help lead you to that ultimate dream house.
Similar to any other purchase, completely check your potential home for flaws prior to making a purchase. Ideally, you don’t want to pay for a house that costs a lot to fix.
If you are looking to invest on rentable spaces, consider the location and potential market around the area.
Condominium units in central business districts are often in demand. Homes in suburban or country areas attract tenants especially if they are near schools or vacation spots. Know the neighborhood first because it affects the value of your home.
Explore payment options
Though it might seem a weakness at first, your youth is actually your best advantage in buying real estate. The younger you are, the more years you have theoretically to pay off loans.
Check your credit standing first to determine how much you can expect from the bank. Consider borrowing from other sources, like your parents for example, with much caution. Know the terms of your loans well to avoid incurring unmanageable debt.
As owning a home is a form of investment, save up before you make your purchase. Though it would be best to acquire the full amount needed to buy your desired property, saving at least for the down payment can already allow you to buy.
Many real estate developers today offer rent-to-own schemes which allow you to move in after paying the initial fee.
Generally speaking, the down payment can range anywhere from 10 to 30 percent of the actual cost of the home. The rest of the amount needed can be paid over a spread period through developer in-house financing or bank loans.
Keep in mind that the larger you can shell out for your down payment, the less you would have to pay over the coming years. Take up multiple jobs that can provide you additional income if your current employment is not enough to cover your dreams.
Condominium developers often offer rent-to-own schemes and multiple financing options.
Have a back-up plan
Acquiring a home entails some costs that might surprise the uninformed buyer. Association fees, real estate taxes and maintenance costs have to be factored in with the purchase of a new home.
Also, homes might require the occasional fixes of malfunctioning appliances or run-down furniture. Don’t overlook additional fees by doing your research well.
Prepare yourself for emergency situations in your new home. Consider the pros and cons of getting home insurance. It helps in case of calamities or accidents, but always check the fine print in contracts.
Ensure that you are getting your money’s worth by asking questions and fully understanding the insurance coverage. You wouldn’t want any nasty surprises at a time when you need money the most.
Don’t be afraid
Overall, it takes a lot of guts to invest in a new home, but being a millennial is not a drawback to this dream. If you really wish to start off on your own, give yourself a timeline to achieve your plan.
Sure, it might take some years and a lot of sacrifice to get what you want. If there’s one thing our generation is known for, however, it’s that we’re determined. In the long run, buying a home will allow you to maximize your finances because your expenditures go directly to your investment and not to the hands of landlords.
It’s never too early to start working toward your dream, even if you have to take stepping stones along the way.
(Sources: www.forbes.com; www.smartasset.com; www.houseloanblog.net; Aleksejs Bergmanis from Pexels)
