Buying Real Estate at a Younger Age Matters
Investing in real estate, through homeownership remains a dream for many Americans. Although the dream of homeownership can prove elusive for some people, many people make buying a home a primary objective in life. Understanding these realities, there are some real benefits to focusing on buying a home at a younger age. Buying a home at a younger age really does matter for four key reasons.
Cheaper to Own (usually)
With rental rates increasing at an increasing rate, your mortgage payment may be lower than what you’d pay for the same home in rent. There are 30-year, 25, 20, and 15-year mortgage options. The longer the time to pay it off, the lower your payment.
Once you own, you will be responsible for taxes, insurance, and maintenance, though. There’s no landlord to call. The upside to all of that is those expenses are tax-deductible.
Buy Low, Sell High
The real estate market for homes is still hot. The Dallas-Ft.Worth Metroplex is #7 on Zillow‘s 10 hottest real estate markets. With that said, the reality is that housing prices are likely to increase overall over time. So, buy now, rather than later, to avoid paying more later.
Real Estate as an Investment
By purchasing a home at a younger age, you have more time to build up equity in your home. Having a home with available equity can prove to be a valuable resource. For example, you might want to invest in something else during the course of a lifetime. By having a home with available equity, you can take out a second mortgage to buy another investment.
Buying another home as an investment for passive income or fixing and flipping it is another option. For added security, having a residence with built up equity can be a solid safety net as well. For example, if a person or family experiences some sort of emergency, a source of funds is available when a home has accrued equity.
Payoff Mortgage Before Retirement
Retirement may seem like something very far off when a person is starting his or her career and planning to buy a home for the first time. While retirement may be many years down the road, planning for your retirement can start now.
When planning for retirement, most will have access to a 401k through work and an IRA through an advisor. Another focus needs to be on buying a home. One of the key reasons why buying a home earlier in life rather than later is you can pay it off before retirement.
Imagine having a fully paid-off home by retirement. Many retirees face retirement on fixed incomes and are still paying their home mortgage.
With no mortgage payment, a retiree has a significantly more manageable financial burden each month. Also, a person has a paid-up asset that can be sold if the need arises. In other words, a retiree can sell a paid-off residence and invest some, but not all, of the proceeds in a smaller home, that better suits their retirement needs.
For most Americans, a home is the most significant investment made during the course of a lifetime. Starting the process of owning a home during the early years of a person’s adult life provides not only the benefits outlined here but also the location at which memories will be made that will last a lifetime.