Should you finance or lease a car?
Should you start a family?
Should you go get your Master’s degree?
Should you invest in a 401K?
And, one of the most important! Should you buy or rent your first apartment or house?
Now, this is a question only you can answer, but when it comes to a life changing situation like this, it helps to assess the economic, social and political climates around you to make an informed decision.
So let’s break down the facts as it relates to a millennial buying or renting shelter nowadays.
We will take a brief look at four future lifestyle moves that should influence your decision:
- Future Investment Goals
- Future Travel Schedule
- Future Family Size
- Future Values
Should You Buy or Rent? Assess Your Future Investment Goals
Buying or renting a house comes down to investment at the end of the day. You are not only investing your hard earned money into this, but also your time, life memories, plus your overall well-being and happiness.
This means, in the end it must be worth it!
According to this CNN Money article, it is always good to know the costs associated with buying a house.
You are not only making a one time purchase (if you buy outright), but you also have to consider home maintenance, property taxes, homeowner’s insurance, and if you financed, most importantly, a mortgage.
We have all been told from tender ages that real estate is one of the safest bets you can make investment wise, however, after the housing crisis in 2008-09 we learnt a different lesson.
Buying a house requires long term thinking. Will you be happy in this home five or ten years from now? Are you happy with the community, town or city? Do you have enough money to invest over the long term for upkeep and other costs? Should you save to buy or get a mortgage? (Both of which come with their own risks).
On the other hand, renting only has one major downside, and it’s the fact that you will never own the property you are living in, but at the end of it all, we personally think it’s a better decision to pay for your living expenses as you go along than committing to a contract or investing a huge chunk of your life to a single physical asset.
Should You Buy or Rent? Your Future Travel Schedule is Important
I know, I know, you might just be fresh out of college or just got hired in a super exciting job that you are committed to for the “long-term.” But, one very important trait you should adopt as a millennial, is learning not to only live in the now.
Your current economic or social living situation now will not necessarily determine where you will be a few years from now.
In 2016, Welance.com organized a study to assess the popularity of digital nomadism among millennials and the results of the study were very interesting.
The average digital nomad spends no more than 1-3 months in any one location:
With more and more companies offering options for employees to work from home, you can virtually be anywhere in the world and logging into work.
Plus, the gig economy is on the rise with nearly 3 out of 10 American workers earning a living through some freelance venture.
So, we would advise you not to restrict yourself to any one location, with the digitally accessible world in which we live, you can be productive and successful anywhere.
Should You Buy or Rent? Your Thoughts on Family Play a Huge Role
What you think about family should greatly influence any house buying or renting decision.
Are you dating? Is it serious? Do you plan to get married? Do you plan to have kids? If yes, how many?
Even if you aren’t married or dating, do you plan on adopting down the road?
These are very important questions to ask yourself as this will help you decide if you want to buy or rent a house or apartment.
According to this interesting piece from The Rooster, not having kids has become a popular mindset for many millennials. How do you feel about the subject? (Answer in comments below)
It is good to assess the long-term family situation you would be happy with and start setting the foundation for that from today.
Should You Buy or Rent? Not Only Assessing the Now, Your Future Values are Important
You might be wondering what I mean by this? How can you know what beliefs a future you will have?
Of course, you will never know, but at least have some idea of what you want in life and how the decisions you make today will affect them.
Your thoughts on home ownership now could change after you purchase a house. What you think about mobility and always being on the move could change once you start to travel. How you feel about having a large or small family could change once you have your first kid.
You never know what ethos the future you will embrace but your lifestyle moves today will impact those ideals in some shape or form.
Should You Buy or Rent Summary
Whether you should buy or rent is solely up to you. However, we believe that assessing these factors will help you make a more informed decision on the matter.
It is not that deep though. You can always sell a house if you buy it or buy a house if you have had enough of renting, but your financial situation, career choices and the overall economy will play a major role in your final decision.
As millennials, our minds and situations are always changing, so take that into consideration before you make any rash decisions and good luck!