At our apartments in Beaufort, SC we often come across people who have questions about renting or owning. Millennials with a yearly income of $40,000 with good credit; they want to move out of their parents' home, and they feel like paying rent is paying someone else's mortgage.
Well, with a $40,000 income, it's very likely that they’ll be able to find a small house, given the fact that they have good credit. But millennials are rapidly becoming disabused of the idea that paying rent is paying someone else's mortgage. Renting may often be the less expensive (and smarter) way to go.
Buying a home is no guarantee of building equity in today's world. By all means, investigate the market for homes in the area in which you would like to live. But keep in mind there is a lot more to owning a home than just mortgage payments.
Often millennials move around, job changes and transfers come into play. Buying and then selling a home in just a few years will most often cause you to lose money. Then there are always home repairs, lawn and yard maintenance, taxes and insurance costs.
If you are new to the area, new to your job, or if you’ll spend too much of your income on your mortgage, consider renting for a few years.
Town Hall Finance