We are all well aware that millennials haven’t received the best deal in life. Baby boomers still run the joint, increasing numbers of employers are expecting higher education qualifications for jobs that barely pay over the minimum wage, and we’re burdened with mounds of student loan debt. It’s not all too surprising, that a third of us are expected to rent for our entire lives rather than purchasing a home of our own. Many people will claim that this is because millennials are lazy and don’t want to work hard enough, we’d rather spend our money on avocado toast, or that we simply don’t want to settle down in one given place, but generally speaking, this isn’t the case.
Many of us end up stuck in the rental trap, paying someone else’s second mortgage on their behalf, as we simply cannot afford to buy as the prices of homes increase, but the cost of renting is increasing as well. You will end up paying more monthly in rent than you would in a monthly mortgage payment. But don’t worry, there are ways to get out of the rental trap. Here are just a few options to consider.
Live With Parents for Longer
This, of course, may not be an option for everyone. But if possible, you might want to consider living with your parents for a little longer than you anticipated. I put in 5 years with my parents, it was brutal at times, but I’m super grateful that they allowed me to live with them rent-free. Most parents will charge rent, but they will probably only charge you your fair share rather than trying to make a profit from you. This can give you the opportunity to stack your coin.
Build Your Own Home (If you can)
I want to start off by saying that you do not have to build a mansion, you can build your very own tiny home, and it doesn’t have to be mobile like the ones you see on tv. They’re a great option for a starter home and you may be able to rent it out in a few years. Remember that when people sell properties, they are looking to make a significant profit. They want to get a return on any updates they’ve made to their home. Following this logic, you may be better off building your own place rather than paying for a home that someone else has built to their standards and intends to make extra profit from.
It may not be the easiest process as you will have to collaborate with many different professionals in order to get this done, and you will have to wait for the home to be built (rather than being handed the keys straight away). But you get to be more hands-on in the process, and architects, surveyors, and contractors dealing with a high-capacity load will be able to get the job done to a high standard. Look on the bright side, your home will look exactly the way you want it to.
Save up for a down payment
If building your own home seems like a little too much to take on, or that it would take you forever to save to build your own place, you may want to follow the more traditional route like I did, and take out a mortgage on an existing property. It may be a little scary, but it’s totally possible, even if you have student loans, so don’t let that stop you. Get a second job or get really strict about budgeting and see if there are expenses you can cut back on. You probably won’t be able to go out every weekend or go to Starbucks every morning, and you might even have to cut back on getting your hair and nails done. You just have to determine what means more to you, owning a home or shopping, or eating out every other day. Saving money isn’t as hard as you think, and having your own place, in the end, will make every small sacrifice worth it!
Budgeting actually helps you beyond the home buying process, it doesn’t hurt to get smart about your money, I’m just saying. And while you’re saving, do some research on first time home buyer grants and down payment assistance. I was able to get $15,000 in assistance that went toward my down payment and closing costs. Even after I knew about the down payment assistance, I continued to save and that money went toward the inspection and appraisal of the property, earnest money, and move in costs. BTW – I still have money left over.
If you are content with renting, that’s totally fine! But if you do want to join the homeowners club, then hopefully these tips will point you in the right direction.