While you’re young, it might seem like it makes the most sense to rent instead of buy. Though being in your twenties can be associated with having less responsibility, fewer roots, and, for most millenials, some amount of debt—but if you’re considering buying property there are a few great upsides to the added responsibility.
1. Build Your Credit
If you’ve taken out a loan, or used a credit card to pay for expenses, you’re familiar with working with credit. By taking out a loan at a young age, and successfully maintaining the payments, you’ll look better and more impressive when entering new lending situations. This ultimately gives you more freedom in your life and the ability to make larger investments in the future.
2. Investing in the Future
This goes without saying, but buying a home in an investment in your future; from a financial viewpoint. Property is one of the most valuable things a person can own, and if you make informed decisions on your purchase, and patiently wait—you will see your assets grow. Buying young gives you more time for that initial investment to deliver returns, which translates to your greater net worth.
3. Learning Financial Responsibility
Though money might feel tight in your twenties, it’s a great time to learn budgeting and develop better spending habits. Not spending your money on frivolous items, and avoiding lifestyle inflation ensures that the money you make now will go back into your pocket in the future. By adding the additional responsibility of a mortgage payment, you’ll be forced to make smarter, more disciplined decisions about how you spend your money.
4. Reap the Benefits of a Tax Cut
Though this might change in the future, as it is now—buying a home affords you some significant tax cuts. People who are homeowners claim significant credits to lower tax liability. Owing the government less money means you get to keep more of what you make—and choose how to use it! That’s more power in your pocket.
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