There has been a lot of discussion about renting vs. buying in recent years. Millennials, in particular, seem to be renting longer and waiting to buy a home. While student debt is certainly a factor, self-made millionaire David Bach, says that “The biggest mistake millennials are making is not buying their first home.” In this article, we’ll discuss why we believe Fixer Uppers are the Key to Building Wealth for Millennials.
Home Owners Are Worth 40x More Than Renters.
Self-made millionaire David Bach, explains why renting is such a bad long-term strategy in his recent interview with CNBC where he says, “”The most important advice I can tell you right now if you’re young is: Don’t listen to these people that tell you should rent versus buy.” Even with the tax law changes, he notes, “buying a home is the escalator to wealth in America. Homeowners are worth forty times more than renters.”
Ugly Houses Offer Lots of Options.
Many people are looking for homes that are move-in ready but if you’re flexible, you may be able to find a fixer upper home at below market value. Keep in mind that these homes are in high demand, so you, your Realtor, your Loan Officer and your Contractor must be ready to act quickly. Joanie Hynes of REMax Advantage Realty says, “Updating a home and making it your own, with all the amenities and updates you want, will give you the ability to choose the items that fit your lifestyle. That’s a big draw for Millennials.” But, as Joanie points out, you need to have everything in place before you go house shopping. She advises clients to meet with their loan officer to explore loan programs that allow you to finance the cost of the home improvements into the mortgage. David Ratti, Branch Manager at Envoy Mortgage, points out, “By getting pre-approved for a renovation loan up front, we can often base the loan off of the home’s future value, after improvements, with little to no cash out of pocket!”
Giving Up A Little Now Can Mean A Lot Later!
Building wealth requires sacrifice. Eating out on a daily basis can cost you more than $1000 per month. Those Starbucks coffees add up too! Putting off a vacation or purchasing a new car is money well-saved. David Bach explains, “The easiest way to save money for a down payment is to have money automatically taken out of your paycheck or checking account on a regular basis and moved directly into a savings account earmarked specifically for your first home.”
Work With A Contractor You Can Trust.
Don’t go it alone! A fixer upper is more than the images you see on HGTV and not a great time for your first DIY project. As a matter of fact, many times, your home renovation loan will require a licensed contractor, so make sure that you’re working with a contractor you can trust. Our checklist can help!
At Parker Design Build Remodel, we take pride in every home and homeowner relationship! We are rated A+ by the BBB. We belong to local trade associations. We have received numerous awards and we provide a current certificate of insurance for every project. If you’re thinking about owning a home, specifically a fixer-upper, contact us today. We’ll work with our strategic partners to help you buy a home and start building wealth!