While often touted as ‘generation rent,’ recent years have seen more millennials buying homes than ever before. Admittedly, statistics do still show that millennials are as many as 8-9% points below previous generations in this sense, but it’s fair to say that things are improving. The trouble is that, for 63% of those millennials, regrets are already making themselves known.
Perhaps unsurprisingly, our so-called generation of renters just don’t have the same housing market know-how as their predecessors. Many are therefore making ill-advised decisions that can, in extreme circumstances, leave them stuck in negative equity spirals.
To help you avoid those same mistakes and become the exception to this all-too depressing millennial rule, we’re going to consider precisely where those regrets stem, and how you can overcome them from the beginning.
Regret 1 – Buying with the wrong priorities in mind
While a recent Trulia survey revealed that 84% of modern home buyers still consider the right neighbourhood to be a priority, certain questions need to be asked about what exactly constitutes the ‘right’ neighbourhood in the eyes of millennials. Too often, younger homebuyers are prioritising properties with proximity to bars, socialisation, and more. Unfortunately, properties like these offer very little longevity, and millennials are finding out the hard way that the high costs of selling, mixed with the often volatile city-based housing market right now, makes for a negative equity cocktail. By instead purchasing perhaps larger out of city properties with growing potential, those same millennials could have saved themselves all the money and stress of having to move before a future family was even slightly possible.
Regret 2 – Only saving for down payments
Record high down payments mean many millennials are saving for years before they can afford real estate, making these individuals more likely to jump into mortgage agreements as soon as they’re able. Unfortunately, hidden costs including everything from fees through to moving expenses, etc. are turning this rushed form of buying into the #1 millennial moving mistake. This is why any reliable mortgage advice will state the need to save at least 2-5% of a home’s value on top of downpayments themselves. While it may mean waiting a year or two more, this is the only possible way for millennials to easily manage, and enjoy, the home buying process.
Regret 3 – Brushing aside the inspection
With only basic inspections a requirement for most modern mortgages, many millennial home buyers also make the mistake of either failing to pay for a detailed inspection or failing to give the results the attention that they deserve. In fact, short of foundation issues, most millennials will push aside significant issues including damp, the need for rewiring, and more. But, with these potentially escalating issues standing to cause significant expense, all millennial buyers should attend, and take the time to understand, any survey, and the potential long-term costs that they could face if they ignore those findings.
Millennials are quickly moving from generation rent to generation buy. Make sure to avoid these mistakes so that you can comfortably join the trend!