Yahoo Finance Why No One Under 30 Should Consider Buying a Home, According to Grant Cardone
Homeownership in the United States has long been a cornerstone of the good life. In addition to the personal gratification owning your home brings, the equity you build creates wealth and can provide financial stability.
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Not for a lack of ambition, older zoomers and younger millennials are finding it more difficult than their predecessors to afford a home in 2024.
“Buying a house is no longer the ‘American dream,'” according to real estate guru and motivational financial speaker Grant Cardone.
Talking about purchasing a home, the CEO of Cardone Capital and creator of “The 10X Rule” franchise recently posted the following on his X (formerly Twitter) feed.
“Anyone under 30 years old should not even consider buying a home at this time.”
One reason is the amount of cash you’ll have to put out each year.
Citing an average home price of $436,000 and a total annual outlay of $50,000, or $4,200 per month, Cardone listed the following costs homeowners face:
Interest
Property taxes
HOA (homeowners association dues)
PMI (private mortgage insurance)
Maintenance
“You can rent for under $2000 with no long term commitment, down payment & keep your mobility,” Cordone wrote.
The current economic climate creates a complex set of hurdles for young individuals looking to become homeowners. With salaries falling behind the cost of living and many people drowning in credit card debt, saving for a down payment can be overwhelming.
Considering how broker fees, maintenance fees and property taxes add to the original sale price, perhaps Cardone is right in saying that, “Buying a home without a doubt is the worst investment people can make, yet it’s also the most common one.” Rather than grapple with stubbornly high demand and soaring mortgage rates and housing costs, more people are choosing to remain renters for longer.
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For Cardone, this is exactly the way to go for younger Americans, but that doesn’t mean Gen Z and millennial investors should miss out on the potential returns of residential, multifamily and commercial real estate ventures. Real estate can be a great long-term investment because it usually appreciates over time. Passive investors interested in real estate have many opportunities to make money without the traditional “property ladder” approach to homeownership, where you start with a smaller, less expensive home, sell it at a profit to purchase a pricier home, and continue trading up.
Even if they are putting off buying a house themselves, young Americans can passively invest in real estate via syndications, where a group of investors pool their capital to purchase property, by investing in real estate investment trusts or by participating in crowdfunding on a platform like Cityfunds.
Keep in mind that real estate is a long-term investment with no guarantee of profit. Only invest what you can afford to have tied up for several years, and always consult with a financial advisor before using debt to finance a real estate investment.
This article originally appeared on GOBankingRates.com: Why No One Under 30 Should Consider Buying a Home, According to Grant Cardone
