The Federal Reserve Bank of New York reported approximately $1.6 trillion student loan debt accumulation as of 2021’s second quarter. With a record high of $38,792 as the average person’s student loan debt, getting a house in this era is nearly impossible for fresh graduates.
But as the phrasing suggested, there is still a possibility. Amidst the financial crisis felt around the globe, there are still ways for the millennials and the gen-z to acquire a house they can call their own. And if you’re one of them, then this list of five real-estate hacks for the fresh grads and young adults will help you move closer to owning your dream home.
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Look at real estate as a business investment
Treat the first ten years of your life out of college as an adjustment phase. Nothing is etched in stone just yet. Every aspect you’re considering before buying a property might change over the decade. Know that it might get better but prepare in case it gets worse.
Approach buying your property as if you’re starting a business.
— Don’t spend what you can’t afford. Getting affordable home loans is ideal, but don’t let it get to your head and buy a property with a garage and more rooms than you can maintain.
— Always look for multiple options. Whether choosing the agent or finding the right paint, having at least three options to choose from won’t hurt. Plus, if you’re going to pay for services and products, it would be best to let the providers know that they have competitors to ensure their best performance.
— Think about renting a room or two. As you’ve noticed, it’s hard for people to get their own house. By renting to your peers, you don’t only help people but also get help in paying the mortgage. Win-win.
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Believe in the magic of rent-to-own
It’s a basic concept. If you’re paying more than $1,000 for an apartment you’d have to leave behind, adding a couple more hundreds to own it after several years wouldn’t change much in your finances. Compared to the end game, the financial adjustment you’d have to make is worth it, right?
If you think you’d have a hard time qualifying for a mortgage loan, then this could be the best option for you. This is especially ideal since you’d get the chance of locking in a purchase price even if the value of the location goes up.
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Consider living overseas
Both your personal and professional growth would be amped up if you immerse yourself in a new culture with less competition. And more than your language skills improving your savings would increase as well.
The cost of living overseas compared to the US is jaw-dropping. As you spend less on your daily expenses, you’d be able to save more for your dream house. And if you choose Asian countries like Malaysia, South Korea, Taiwan, Japan, and Singapore, your chances of buying land at a cheaper price increase.
These countries, among a few others, do not have foreign property ownership restrictions. You can buy a beach house for half the price of a run-down suburban home.
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Be wise with luxury
As stated above, spending what you can’t afford is one of the common pitfalls homeowners face. Debts pile up when you have to maintain a lifestyle you can live without. Unless you’re going to lease your other three bedrooms, you don’t need to buy a four-bedroom house. If you’re always going to be outside and stay in your room when you’re at home, why would you have to buy a two-story house?
Along with the general “don’t purchase a mansion just to feel like a king” rule, here are a few other saving hacks you should try.
— You don’t need a car yet. Paying for car maintenance, gas, and car loans along with your home loans and student debt will only make your life difficult. Slow your pace. Get a bike. You won’t only be saving money, but you’d also be saving the world.
— Drop that latte. No, you don’t need to buy coffee every single morning because of aesthetics. There’s free coffee in the office. Getting an aesthetically pleasing tumbler where you could put fairly priced caffeine can be your first step in getting that dream home.
— Stop eating out. You can save a lot of money by buying groceries weekly and cooking at home. It can also be good for your health. Imagine saving money and toning your body at the same time. You get to be rich and pretty. Let’s see if that doesn’t fire you up.
— Avoid sales. Sales give you the illusion that you’re beating the system. But in reality, the system is laughing at your face. Splurging on a sale doesn’t save money if you’re buying things you can live without. Saying “I saved money by buying an 80% off fake mustache” won’t cut it.
All in all, buying your land and getting your dream home doesn’t have to happen right away. Everyone moves at his own pace. Invest in your future and avoid making rash decisions. You’ve just graduated. Your whole life is ahead of you. Slow down and enjoy the ride.
