Are Millennials really buying homes? Or more importantly, are Millennials interested in buying homes?
Well, with current trends in the real estate industry it is quite amazing to witness that youngsters today have an inclination towards owning their own homes rather than renting their roof.
The percentage of young first-time buyers has surpassed the older generation for the past few years in a row.
Are we an entitled generation who thinks they are smarter than everyone else or are we really fortunate enough to be born in a generation where it easy too easy to buy your own real estate?
We think it’s both, the generation is hell lot a smarter in investment and real estate does offer some easy ways to buy your own home.
Reasons for Increased Percentage of First Time Home Buyers
Few key factors to drive the increased rate of millennial home buying is the improved condition of borrowers and workers.
The bank interest rates are at an all-time low. The employment wages are higher and the employment rate is going down.
Very few people are unemployed or underemployed among the millennials today. So increased income and security is what driving this increased percentage.
Many of the millennials today are entering into the thirties and planning for marriage and kids, further pushing their desire to buy a new home.
Additionally, the rents have been rising steadily from the last five years, making home-buying less costly than renting.
The increased percentage could still see a surge in percentage if it weren’t for a few roadblocks.
What is Stopping Millennials from Buying their Own Home?
At present millennials are plunging in the real estate and property market but there is still a huge percentage of youngsters who are still hesitant of buying their own property.
It’s not because they don’t want to buy a home but due to two basic problems
1) Millennials Pay High Rent
Generally speaking, most of the millennials love to live in an urban community, where both property and rent value is higher. Most of the adults who wish to buy a home, prefer a location connecting their daily commute, which also results in price rising up.
Nearly 30% of their monthly income is spent on rent making the millennials rent-burdened. It is not uncommon to see youngsters getting rent-burdened. It means a very little amount of money gets saved for the down payment. Most of them wait for enough money to save up.
2) Millennials Crushing Under Student Loans
A long term student debt when coupled with a low waging job and rising property value is keeping most of the millennials from buying their own home.
A typical student loan delays a home buying process by seven years on an average. Student loans prevent people from saving a downpayment or affording a mortgage. Even people with high incomes don’t feel secure buying a home. The situation is worse for those with student debts and no college degree.
Benefits of Buying Home at an Early Age
By far, buying a property is one of the safest and secured investment opportunity. Given the economic condition of India, the prices are more likely to move towards appreciation. So in case you have purchased a real estate early in life, you have created yourself lifetime security. It not only creates an asset, but it also creates an value-adding asset.
Either you live in your purchased property or rent it out, both ways will help you make money. In case you live in, you save on the high rentals and in case you rent, you receive yearly increasing monthly rentals.
Tips for Millennials to Buy their Own Home
Now there are various things you need to keep in mind when buying a home for the first time. But the information is scattered all over the internet. We have brought them together in one place. Here are some of the practical tips to follow.
But a thing to remember is that you cannot ignore even one of these tips. All the information is carefully researched and written down in the blog. You cannot jump across even one point if it doesn’t fit your criteria. These tips have helped numerous millennials to buy their first home and we are sure it helps you too.
So let’s begin…
#1 You Need to Get Your Priorities Straight
The first tip is to get your priorities straight. You can buy a home at your own prescribed time, given that you are utterly focussed about it. But first, you need to sit down and list your priorities.
If your priority number one is to buy your own house, your entire focus should be to dedicated to the process. Yearly trips, weekend fun sessions could take a back seat for the time being. If you do that it’s fine too, but once you decide your priorities, you should have the discipline to stick to it.
This doesn’t mean you will never take your trip again. It’s just mean you need to keep your home buying wish on priority comp[ared to other activities.
#2 Stop Making Excuses and Create a Confidence
Seems more like a motivation tip rather than practical. But you will be surprised to know how most millennials rely on excuses to not buy a home. Stop complaining about the prices, or how difficult it is to save.
If buying a house is what you want to do, you can do it even in a span of two years. Millennials home buyers are lucky that they have so many financial options when it comes to buying a home.
The previous generation had to work for 20 to 25 years before saving enough money to buy their own home. The sources of income have multiplied since the dawn of the internet.
#3 Try to Find Creative Solutions
You need to get creative when you are buying a new home. There come numerous barriers when purchasing a home, being creative is the only way through.
If you can’t save enough money from your daily job, you could start a side hustle to earn extra money.
You can become creative while planning your financial decisions, where to buy, when and how you buy.
#4 Create Your Monthly Saving Plan
If you are really dedicated to owning your home. You need to start preparing your financial budget. First, make a list of monthly expenditures and eliminate unnecessary spendings. This is the first step in saving your money.
If you feel you are unequipped to do this ask someone who is already doing it. There are countless ways to save money and a lot of information is available on the internet.
Some of the tips include:
● Make pretend mortgage payments in a separate bank account.
● Avoid weekend expenditures
● Cut your travelling budget
● Start having only homemade food
● Talk your budget needs with your family and friends and ask them to be accountable.
● Find ways to make more money
You would be surprised to know how much money you could save on a daily basis just by evaluating your expenses.
#5 Start Building Relationships with Real Estate Developers
Realtors can be a good asset when buying a home. They have an accurate knowledge about the properties and at what cost suits the location.
Developing a good relationship with your realtor will help you discuss the financial details, what kind of home you want to buy, market conditions and even provide information about the documentation required.
#6 Decide What You Want
Decide what exactly you are looking for? Is a 1 BHK flat or a separate house at a prime location? You view this as an investment opportunity or you want to live in yourself.
This perspective will help you answer your questions about the amount you should be saving.
While deciding to buy a house, you need to as specific as possible. Buying a house is an expensive investment and having predetermined all your requirements will avoid any last-minute expenditures.
You should be able to paint a complete picture when asked about your home buying plans. This is how clearly you should be prepared before even contacting a realtor. Later your realtor will add their own experience and help you crack the best deal.
#7 Learn Everything You Can About Buying Real Estate
The next step for millennials is to gain knowledge about the real estate market. Real estate is a secure investment, but also a costly endeavour. Don’t stop your research at this blog post or 100 such, keep digging. Talk to real estate experts, or any of friends or relatives who have done this kind of investment before.
Research your market, the location you are buying into, communities and other things related to real estate. The more you know about your investment, the more creative ways you can find to save the money.
Even though you have a clear picture of what you want to buy, explore different options as you may never know what you end up discovering.
#8 Understand How Mortgage Work
Real estate bring some of the most complex but important calculations and not having the right knowledge could put you in confusion and even a possible loss.
Some of the complex terminologies include Mortgage. For a millennial or a first time home buyer like you, an understanding mortgage could get confusing. There are various dynamic parts involved including the type of lenders, interest rates, how the duration of loan affects your EMI’s and downpayments.
If you are a fresher to these terms, consult a financial advisor before making any decisions. Make a list of all the doubts you have about your financial status.
#9 Get Multiple Quotes
Even though you are just a first time home buyer, your approach should not be less than a professional. Millennials are equipped with the internet, make sure you research properties online and then narrow down to visit them personally. Photos and videos online could be misleading, a face to face conversation is always better in huge investment decisions like real estate.
Get multiple quotes from different vendors and compare what each quote has to offer. Send your realtor and make them analyze properties based on their experience. This will surely prevent you from making a bad investment.
#10 Learn How to Negotiate
When done right, negotiating can save you a substantial amount of money. If you feel you cannot deal with negotiation, accompany someone who could.
It is also important to pre-decided the terms and conditions you would like to add in your sales agreement. The two main ones include home inspection and financing options.
Even though you have your financial backups, having a clause will protect you in case you couldn’t make it. Home inspection clause would make you immune to any unnecessary surprises and leave you a way to pull out of the agreement in case your possible home fails the inspection test.
You are fortunate to be a millennial. The opportunities before you are flourishing, it’s only about how to grab those at the right time. Remember, the sooner you buy a home, the better investment opportunity it creates. The real estate prices are surging, and it is very likely that this trend will continue.
It’s been reported that many first time homeowners have buyer’s remorse. You are investing a huge amount so make sure that you get it right. If you are still confused about all the home-buying procedure, you can always contact us. If you still need some more information about the real estate, you could browse our other blogs. We have some content dedicated to educating people about real estate. We post weekly blogs and would love to help you buy an affordable home when you are ready to buy it.