With Millennials dominating the real estate market as buyers, it is important to understand why they are buying a Phoenix home. When talking to Millennial buyers, many have the idea that they must buy a Phoenix home because it is their next step. In fact, many even find it more important that marrying their significant other or having children.
However, buying a Phoenix home is not for everyone. Which is why it is important to decide if doing so would improve your financial situation or worsen it.
Many people feel pressured by society to take on their role as a Phoenix homeowner. Some measure their success through their ability to buy a Phoenix home. This is so far from the truth.
Buying a Phoenix home should not be someone’s focus because they feel it is expected of them. They should only buy a home if it would help better their lives.
For some, renting is actually a better option. It does not tie a person to one home for fifteen to thirty years. There are also fewer maintenance costs in a rental.
Someone who is not financially ready should not rush into homeownership. Those that do not want to live in the same area for too long are also better off renting.
As people attempt to save up for a mortgage down payment they often let other savings fall to the side. Do not forget about contributing to a 401(k).
While owning a Phoenix home in the future may be helpful it is not going to matter if the person has no funds to retire on. Always contribute to a retirement fund and have an adequate savings accumulated before attempting a huge purchase.
While considering what budget is reasonable many Phoenix home buyers fail to factor in insurance and taxes. They focus on the monthly mortgage payment and think that it does not seem too difficult to achieve. However, after factoring in the tax and insurance payments, it often tells a different story.
Avoid pouring too much money into a new Phoenix home. If the monthly costs of owning the home are going to be more than thirty percent of your monthly take-home income then the house is too expensive. If anything happens to the person’s income they are going to seriously struggle to make those massive payments.
Some people like to travel. They do not want to stick to one neighborhood, state, or even country forever.
This is why those who want to travel should consider renting. While some people see renting as a waste of money it is much easier to leave a rental than it is to sell a Phoenix home under mortgage.
Keep in mind that selling and buying Phoenix homes costs money in closing fees. With all of the costs to sell a house, most homeowners barely break even when they decide to sell. The money they have invested in the home is lost and they end up without the property in the end.
Unless one plans on staying at least seven to ten years in their property they are better off finding a good rental.
People tend to want to buy a small Phoenix home to live in for a while until they make enough money to buy the home of their dreams. The idea is that once they are ready to make a bigger purchase they can sell their smaller home for a profit and be set to buy that bigger home.
While this may work for some in a neighborhood that sees a lot of appreciation in the value of the homes, it will be a wash for most. Rushing into a starter home can cost the homeowner more money. They will need to pay closing costs, pay for maintenance on the home while they live there, and pay on closing costs again when they sell.
There are times when it can be worthwhile to save money for that bigger home while renting and save the headache of trying to buy and sell another home.
Owning a Phoenix home is not necessary to show success. Nor is it right for everyone.
Those that do not want to maintain a home or a yard are better suited for a rental where the landlord takes care of these items. Rushing into a large purchase before financially ready or settled into an area can be a big costly mistake for many first-time Phoenix home buyers.