Moving out of home is a bold and independent move, the perfect summary of an adventurous millennial!
But it isn't as easy as jumping ship!
It's difficult to understand which direction to set sail that wont lead to 'ship wreck' (translation: being locked in when you have so many places to travel and so many things to do). The two main pathways tossed up by millennials is whether to Rent or Buy?
1. To Rent?
Young millennials with a large "to-do list for life" or who enjoy not being locked-in to a long-term obligation will love the flexibility and diversity that comes with renting.
Unlike buying a house, renting allows individuals to live a lifestyle that best suits them. Being able to move without any long-lasting obligations gives individuals the freedom to pursue any path that may need a noticeable change of circumstance (suddenly that overseas working program doesn't seem to be far-out idea after all).
The shortcoming of renting, however, is its smaller level of security compared to buying. Depending on what state or territory you live in, some landlords can leave you with as little as 14 days' notice before eviction. If you're a millennial ahead of their time who is looking to start a family of their own, then security and long-term settlement may be preferable.
Your Dad is on to something. Depending on where you live, house prices will most likely increase over the years that means down the track if you choose to sell (less any mortgage remaining) you will be reaping in the returns.
As mentioned previously, security is a major benefit for couples looking to start a family. As opposed to renting, there is no fear of eviction, which can give the soon-to-be families peace of mind knowing that they have long-lasting stability.
Young families get a home of their own that they can grow into overtime.
The elephant in the room that needs addressing- how much money do you need for your home deposit? On average, banks require a deposit around 10% of the price of the home to be eligible for a mortgage. So, for a home costing $600,000, you would need at least $60,000 for your deposit (calculate yours here!). You may even choose to save upwards of 20% (that's $120K by our previous example) to avoid lenders mortgage insurance and save yourself the pain of paying the Banks more interest!
Understandably, such large sums are a challenge for most young leaving the nest.
Renting is a great way to gain some independence while also being able to save money and enjoy a flexible lifestyle. However, nearly every millennial at some point will settle down and want to move in to a stable and secure home that will benefit them in the long-term.
The reality of saving for a home deposit is it's a daunting task that requires strict budget planning and coaching.
Smart Home Deposit tips the scale in favour of buying by making saving for your home deposit less daunting. By providing easy access to setting up a fully diversified investment portfolio, you can spread your investments over the entire market (diversification), which allows you to minimize risk and maximize return. Plus, with automated deposits never miss a milestone
Tired of getting nowhere with the banks? Having trouble with impulse spending? We have you covered! Get your money working hard and open a Smart Home Deposit account with as little as $100. Your first home is just around the corner.