How do Millennials avoid being slaves of debt-funded homes and what do they do differently?
Low paid local income or compromises for good paid city jobs, why is renting an advantage?
Millennials, the Smartphone Generation
Renters in Future?
What gives young people a future?
It has not changed, will not change — people strive for relationships, a career and sufficient income. Doing so the handicap is that only few cities provide what young people mostly want. And those cities suffer from so called “housing shortage”. The truth probably is, with a housing boom the problem would shift further to unacceptable traffic congestions, insufficient public transport, price hikes for parking, etc. Those symptoms have been an issue for years. I left Auckland exactly for these reasons 18 years ago. The question is why do city planners permit isolated “sleeping towns” while citizen have to commute to work, shopping and everywhere. Just the opposite is when people have to leave their home towns for jobs in AKL.
Regional infrastructure issues is not the only reason that renters prefer flexibility when it comes to make a rent or own a home decision. People who follow a career path avoid being a slave of a debt-funded home. That is another reason why the number of people is steadily increasing who are looking for quality rental homes. So did I too, rented for more than 25 years and settled in the mid forties as homeowner.
More than ever, the smartphone generation has opportunities by using technologies to find a career and the meanings in life. But do Millennials understand the need to save in order to survive and build up financial security?
Are Millennials renters in future?
From housing point of view living in a city you probably have to choose to rent. That does not seem to be a problem for Millennials as they want to have flexibility to move if necessary. Even for couples apartment living is a sensible option as the dream of home ownership takes longer in the making.
Obviously Millennials have broken with traditions to prove adulthood by getting married, kids and a mortgage. I would not think that the dream from owning a home in future is dead, but priorities have shifted. The liability-free lifestyle of renting has become a valid option. And it makes sense firstly to pay off debts like student loans, gain experience and settle when the mindset is matured for making long-term decisions.
Mortgage or higher paid city career?
Achieving financial security is very country specific as it has social and economic components. In NZ equity in home ownership is a central part likewise in Australia where a mortgage-free home is a desirable achievement to support living in retirement. To get there Millennials have two options:
· Working traditionally for local jobs and low income, making sacrifices to pay off a mortgage (enforced saving plan) and being debt-free in retirement.
· Taking opportunities for a good paid city career or overseas job and becoming financially independent by using the Rule of Accumulation and lower housing costs for renters to invest for a “nest egg”.
Professionals in these days have opportunities to work in globalised industries, higher incomes make it easier to save and the acceleration of investments with
compounding interests are helpful to reach financial goals.
Klauster Properties Ltd - Renter’s Blog
Rent or Own - Decision at some stage in life?
Reasons why renters change mind
Although the nation's home ownership rate may be falling, statistics show that home ownership remains to be the preferred way of life. For renters there are three obvious reasons to change mind at some stage in life:
· Only home owners sit in the driver’s seat in terms of making home improvements for a desired lifestyle or family. Still for bringing up kids a backyard seems to be important.
· NZ’s renting culture is a problem for good tenants and the rental housing stock is dated.
· In budget apartments city dwellers get sick of making compromises. After reaching financial goals, New Zealanders are ready to let dreams come true.
For building a financial sound future it becomes increasingly important to start saving early in life to benefit from compounding interests.
Investing in good education, going for career opportunities and re-investing savings out-run a debt-funded home. (Note: Debt funded homes and debt-funded investments are NOT the same.)
Renting versus home ownership is a lifestyle decision, investing and financial security do not depend on one or the other.
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Renter’s Blog lead to a real person, IT professional, investor, landlord and business owner with interests in sharing experiences. Life is a dream with a deadline, happiness comes from making the right choices and having realistic expectations.
Confession: I have been a happy renter for more than 25 years before buying a family home and later becoming involved in property investments and developments.
I used to live in apartments or rental homes, worked in many different countries and experienced different housing standards and renting cultures. I would love to see a social and legal frame work around housing policies that supports renters and landlords alike.