5 Reasons Why Buying a Home is the Smart Move for Millennials

5 Reasons Why Buying a Home is the Smart Move for Millennials

In a lot of ways, it’s hard to be a millennial: How do you get started investing and accumulating wealth in your 20s, especially with today’s volatile job market and the looming specter of student loan debt?  

Well, we’ve got good some news. Throughout the country – and here in Chicago, in particular – buying a home is one of the smartest investment moves young people can make. Purchasing a home is an investment in a physical, inflation-protected asset that can make a huge difference for your retirement nest egg down the line.

The millennial generation represents the largest percentage of first-time homebuyers, and financial and real estate experts are encouraging young adults to enter the market.

As reported by U.S. News & World Report, here are five reasons why millennials should consider investing in property:

1.) Investing in a Home is an Investment in Your Future

While it may seem easier on paper to simply write out a rent check at the start of each month, this is a short term expense with no real long term benefits to you. Mortgage payments, on the other hand, can be thought of as an investment in the future: As you pay down (or pay off) your mortgage, you build equity that can help bolster your retirement fund, including your 401(k) and IRA accounts.

What’s the gist? Paying rent benefits your landlord’s pocketbook now; having a home is a smarter way to benefit your own accounts down the line.

2.) Think of the Resale Value

Buying property is historically a sound investment, and it makes even more sense when you consider the long term trends in the sort of rapidly-expanding urban burbs favored by young homebuyers. Buying into hip areas where the market is trending up – like Chicago’s West Town or Lakeview neighborhoods - can increase your net worth in just a few years.

3.) You’ll Get to Enjoy the Tax Breaks

There are all sorts of tax benefits that come along with homeownership. Come tax time, your mortgage interest is deductible from your income tax, lessening your tax burden. And when it comes time to move, you probably won’t have to pay a capital gains tax if you’ve occupied the property for more than two years and its value increases by less than $250,000.

4.) You Can Take Advantage of Low Interest Rates

With market conditions the way they are, buying a home isn’t as expensive as you might think. As we’ve mentioned before, many millennials can expect a down payment of less than 15%, and interest rates remain at fairly low levels. And most banks see borrowing for a home as a safe investment – certainly moreso than credit cards or the stock market.

5.) Owning a Home Can Have Emotional Benefits

There’s no denying that there’s a certain level of pride that comes with homeownership. You’re fulfilling the American Dream and carrying on a proud tradition.

And there’s research to back this idea up, as well: According to the National Association of Realtors’ 2011 American Attitudes About Homeownership report, a “larger share of homeowners than renters describe their communities as safe and stable.” The report goes on to say that homeowners are “more satisfied with their community and family life” and are more likely to know their neighbors and participate in civic activities than renters.

So homeownership isn’t just an investment in your own future – it can make a big difference for your long term health and happiness!

Whether you’re ready to start the search for your first place or you're in the market for your next investment opportunity, drop Real Group a line! We have the team and the experience to find you the perfect Chicago starter home.

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