Compared to the previous generations, Generation Y, more commonly known as millennials, are the least likely to own a house as they reach adulthood. This is in stark contrast to the previous generation, who prioritized owning their homes. Most millennials opt to rent instead of owning a proper house. And for good reason. Properties today have gone exponentially high, but their income has remained stagnant. Owning a house today seems more like a luxury now than a right.
However, in a recent Bankrate survey, millennials prefer real estate as a long-term investment over any other investments. To assume that this generation isn’t keen on investing long-term is inaccurate. They do have an understanding of the importance of home. It’s just that they cannot afford it.
What’s even more challenging for millennials today is the impact of the COVID-19 pandemic. They now better understand the security of having your own home. Something that renting a house cannot give you. With a proper home, work-from-home arrangements are better planned out and executed. And there’s just that better feel of security in owning a home over just renting.
In an ideal world, millennials have the purchasing power to own a home, but it is a tougher reality. It is horrific that a global pandemic must first be experienced before the importance of real estate investment is realized. As unfortunate as the circumstance may be, there is always a silver lining. There is no perfect time to invest in real estate but today. Adding a global pandemic in the picture, investing is even more apparent.
Starting Your Investment Today
If you are young and starting, you do not plan for the future most of the time. Most of your initial earnings were spent on luxuries and other short-term things, which are not wise investments. However, with the unprecedented pandemic, priorities must change. Thinking of long-term goals is what’s essential now. With just a snap, lives had been altered forever. Most had an epiphany of the things that truly matter, like security and stability.
What do millennials have to know when it comes to real estate investments? Real estate investments are different ranges. Real estate by definition is “the property, land, buildings, air rights above the land and underground rights below the land.” Real estate is not just a house but the entirety of the air above the land and below it.
This investment relies on ownership of a piece of land. Land ownership is, of course, one of the best investments around because its value never decreases, rater it always appreciates. However, it’s not just that. Buildings, apartments, and condominiums are also considered real estate.
Here’s what millennials need to consider when investing in real estate: long-term plans and career trajectory. If you are not going to start a family and focus on things but settling down, you may opt for smaller-scale properties like apartments or condominiums. If you are planning to settle down, you should probably consider going upscale. Again, tailor-fit your investment to what you need and what you want to do in the future.
Real Estate as an Investment
If you are looking for more ways to invest, real estate is a good long-term investment. Aside from owning a home, buildings and commercial spaces are also lucrative investments. But they also require much more, and before you start seeing your investments grow, you will have to shell out huge sums of money.
For example, buildings require a lot of maintenance and are obviously more expensive to build than smaller-scale property. Construction, design, and safety provisions must be considered. If you are building scratch, you may need to acquire construction materials like stainless steel, concrete, paint, and other materials.
For that, you need to connect with construction companies, welding companies, designing firms, and whatnot to help build this structure. These are some things that you must take note of.
Millennials are faced with lots of challenges. Not even past their thirties, they have already experienced numerous generation-defining events. They have gone through so much it is not surprising how resilient they have become. Real estate investment might have come late for most of them.
They will weather the challenges of the times because, quite honestly, they have to. For that, they will be more cautious and even wiser than their older counterparts from previous generations. There’s no need to be ashamed. What’s important is that you know your value.