Is owning real estate a good idea for millennials? That’s, literally, the million-dollar question. Ultimately, homeownership is a choice, not a right – and, it’s not for everyone.
Pros Of Buying Real Estate
- Security – You don’t have to worry about a landlord kicking you out or selling the property at an inopportune time. This becomes increasingly important when you have kids, pets, etc., at which point finding rentals last minute becomes more difficult.
- Asset – Eventually, you’ll own it outright. Regardless of whether or not it appreciates, it’s an asset. If it goes up over time…bonus!
- Flexibility – You can renovate it, paint it, rent it out, Airbnb it, do house swaps to travel, etc., without landlord approval or restrictions.
Cons of Buying Real Estate
- Maintenance – You have to maintain it, which costs money and time.
- Affordability – It’s getting harder and harder for millennials to break into the market. Price growth has diverged significantly from income and the discrepancy is getting persistently worse. Still, people have an invalid fear of missing out, which we don’t feel is a good reason to jump in.
- Inflexibility – If you want to move, you’re at the mercy of the prevailing market conditions if you have to sell.
In North America, it feels as if it’s a right of ours to own real estate. But, it’s definitely not. It’s a choice and it’s not for everyone. The baby boomer generation made a mint off real estate so, from their vantage point, it may seem like an economic “no-brainer”.
However, this is no longer the case. Millennials are faced with exorbitantly high real estate prices (really, quite unaffordable in many places) and arguably poor job prospects with increased competition. Real estate will not appreciate the same way it has over the last thirty years, so the economic argument has become diluted. There’s a lot more to it now, so it really comes down to what your personal goals and values are.
It’s not for everyone. And that’s OK.
