There is no argument that today’s millennials are highly educated and tech savvy. Their “carpe diem” philosophy is great for taking risks and enjoying life, but does it help with long-term financial decisions?
The vast majority of South Florida millennials rent vs. buy. With astronomical rent prices and no financial gains, it might be wise to consider purchasing a home in the near future. Below are 5 reasons why putting money into a home, rather than the latest iPhone, might be advantageous for today’s millennials.
1. Mortgage payments are the same (if not less) than rising rent prices
The average rent in the Downtown Fort Lauderdale area is $1900/month (apartment around 750 square feet, with 1 bedroom/ bathroom). What does that equate to in the home buying world? Depending on your down payment, you can most likely purchase something around $300,000. This price range could give you 3 bedrooms, 2 bathrooms and double the square footage.
2. Options, options and more options
One of the many benefits of purchasing the home is options. Now that you can obtain a larger living space, you can have a roommate(s) to share expenses. It is mutually beneficial. It is more affordable for them and allows you to add equity on someone else’s dime. Got a new job offer and need to move? Renting your property could be an option. This allows you to hold onto your assets and maybe even make a little extra every month from rental income.
3. There are many financial benefits
Some financial benefits include tax deductions and appreciation. Homeowners are able to deduct mortgage insurance and property taxes when filing each year. Owning a home is an investment. With the South Florida real estate market continuing to rise (with foreseeable stop ahead), a person can make a quick return on their investment.
4. You don’t need to have 20% down
For qualifying mortgagees, you can put as low as 3.5% down when purchasing a home through an FHA loan. This is sometimes is equivalent to first, last and security deposit when renting. It would be wise to contact a licensed Florida mortgage lender for a complimentary pre-approval before signing a lease. This will open your eyes to options.
5. Don’t pay for someone else’s property
In a nutshell, renting only benefits the landlord. Each month, you are paying for someone else’s mortgage. In addition to building a stranger’s equity, you will be spending your hard earned dollars making someone else’s place nice. Wouldn’t you rather hang that new 65-inch TV on the wall YOU own?
If you are thinking about taking the home buying leap, reach out to a licensed real estate professional. There are not additional costs for buyers to use a real estate agent. Let the experts guide you.
For a FREE step-by-step guide to buying a home, download the Complete Guide To Buying Your First Home CLICK HERE