Why Buying A Home Is A Smart Investment For Millennials

Why Buying A Home Is A Smart Investment For Millennials

The benefits of buying a home are plentiful, as it’s one of the most important financial decisions you’ll make in your life. And while it’s not always easy, especially in a volatile market, it’s certainly worth it in the long run. Buying a home can be a solid investment providing safety, security, and possibly even rental revenue down the road. 

A wealth management financial advisor in San Ramon and Newark advises millennials and investors of all ages and incomes to consider homeownership as a method to build wealth, which supports financial health, allowing you to live life on your own terms

There are many reasons why buying a home is smart for millennials—this article will inform you of just a few of them:

  • Homeownership is an investment
  • Owning a home builds wealth through equity over time
  • Homeownership creates financial health and stability
  • Owning a home allows you to live life on your own terms
  • Homeownership offers helpful tax breaks

Buying a home is an investment.

Buying a home is not just about the cost of keeping a roof over your head; it’s also about building equity in your home. As you pay down the mortgage and add to its value with each monthly payment, you’re building equity that will eventually be yours to keep. You’ll also be investing in your future and your family’s future, which is something to treasure.

As you pay your mortgage each month, you’re building equity in your livable investment. If and when you sell the house, that equity is yours to keep as profit or use for other investments. If you used an FHA loan to buy your first home and qualify for a 3% down payment, for example, then starting with $5,000 out-of-pocket can net you tens of thousands of dollars more than if you had simply put that money into the stock market instead. 

Over time, this means more opportunities, freedom, and less financial stress, which is priceless!

How does homeownership build wealth?

Aside from building equity over time, you may decide to rent your home down the road, which is the same no matter where you live. The value of your home will fluctuate depending on where it’s located and what condition it’s in. By buying a home instead of renting an apartment or condo, millennials can invest in their future by getting into real estate early so that they can build up equity when property values are increasing. 

The more money you put into an investment like this (by paying down your mortgage), the more valuable property becomes!

Homeownership can lower your monthly housing costs.

Homeownership can lower your monthly housing costs by reducing your monthly payments, insurance, maintenance, utility, and property taxes. You may be able to get a lower mortgage rate than you would with a rental payment, in addition to paying less in interest on the home loan itself – which is tax deductible.

How does owning a home help you take advantage of tax breaks?

The government gives homeowners tax deductions for mortgage interest, property taxes, and improvements. You can also get tax breaks for energy-efficient appliances, solar energy systems, and other home improvements that may lower your monthly utility bills. Your local government offers property tax reductions if you make certain improvements to your home, such as adding insulation or installing a new heat pump.

Work with an affordable financial advisor in the Bay Area to get more insight on how to go about pricing out homes within your budget to take the next steps.

Renting isn’t always as affordable as it seems – you may end up paying more in the long run.

If you’re a millennial, the idea of buying a home might seem like an incredibly daunting prospect. But the truth is that for many people, buying a home can be cheaper than renting one.

One reason is that rent prices tend to increase over time in most cities, while home prices only go up slowly or not at all (in some areas). In other words, if you rent today and then buy later in life, your monthly mortgage payment will likely be lower than your monthly rent payment.

Another reason why buying might cost less than renting is that landlords usually don’t pay for maintenance and repairs on their properties—you do! If something breaks down in your apartment or condo building (like heating), then you’ll need to spend money fixing it—and if it’s an older building without central air conditioning or heating systems throughout its hallways, that costs even more money. If there are problems with plumbing or electrical wiring inside an old building like this one, they could also cause fires, leading to serious problems if not handled properly.

Homeownership leads to financial health.

It’s also about having the right mindset, habits, tools, resources, and support system in place to ensure you are on track to achieve your goals. Lucky for you, it’s now possible to work with Humanity Wealth Advisors, an affordable financial advisory firm in San Ramon and Newark, in order to get subscription-based financial planning. 

Unlike other firms that have a minimum asset requirement, we do not and can provide on-demand financial advice for millennials or anyone who needs it. Sign up here for $50 a month!

Homeownership allows you to live your life on your own terms in the long term.

Homeownership is great because you can make changes to the home as you see fit, including renting out rooms or space, making improvements to the property, and selling your home for a profit at any time. You also have control over how much money you spend on repairs and maintenance while still being able to enjoy what’s most important: living in a place that feels like home.

You may not be able to do all of these things with an apartment or condo. If you rent out rooms or space in an apartment or condo building, then strict rules might limit what kinds of changes can be made, how often they’re allowed, or what pets are allowed—which can prevent renters from feeling truly comfortable.

Owning a home can lead to living in a nicer, safer area.

Owning a home is also an investment in your family’s future. While renting will always be more affordable than buying, if you’re looking to live in a certain area or neighborhood, it can help to have a home as opposed to paying rent month after month and having no equity in the property.

Buying real estate can give you access to better schools, safer neighborhoods, better shopping options, and more. In addition, having your own place allows you to start a family without worrying about long-term leases or other restrictions that would prevent growing roots together as a unit.

Your home can be an investment and provide income through renting out rooms or space.

Renting out a room or space can be a great way to make money and help pay for your mortgage, student loans, and retirement.

  • If you have an extra bedroom at home, consider renting it out as an affordable alternative to living in an apartment with roommates.
  • If your home has extra rooms that are empty or underutilized, consider subletting them through Airbnb or another similar site.
  • Maybe you will decide to buy a second home down the road and rent your first home out completely. 

It’s important to note that selling your home is not always the best option; there are other ways you can make use of your property while saving money toward long-term goals like buying another house in the future or paying down student debt while still being able to live comfortably at home. A financial planner in Newark and San Ramon can help you explore the options available to make the best financial decisions.

Home values have been increasing steadily over the past few years, so you’re likely to see a good return on your investment if you sell in the future.

One of the best reasons to buy a home is that the value of homes has been increasing steadily over the past few years. Maybe you have noticed the pandemic-related housing market disruptions. Because the housing market is a tricky thing to understand if you’re just stepping into that arena, work with a professional at Humanity Wealth Advisors who can help ensure a good return on your investment. 

Remember, all the financial help is here when you need it through subscription-based financial planning!

In Summary

As you can see, buying a home is an investment that can help you build wealth and financial security over time. It also gives you more control over your housing costs so that you can live your life on your terms in the long term. The best part about it? 

You don’t have to know everything about investing before starting. As long as you research different mortgage loan options and work with a trustworthy professional who knows how important it is for young people like yourself to invest wisely, who knows what the future has in store. 

Reach out to Humanity Wealth to hire a financial ally who always has your best interest at heart!

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

More about the author: Harry Sherdil

As a fiduciary financial advisor at an independent firm, Harry strives to offer the same resources, tools, and research as bigger firms while serving new and existing clients' best interests.