When Trump was elected, I decided I wanted to go into real estate. Do you have any career advice for me?
We selected this question, but not to give personal career advice. Our column is informational. Everyone reading this will be going into real estate… when they buy their first home.
Millennials were not of age when the housing crisis hit, so they conveniently ignore it. Statistically, they will buy a home at around 32 and spend over $140,000. There are professionals for legal, medical and financial advice. When planning to become a homeowner, you make your own personal choices, explains residential experts, 1031 Gateway, a 1031 exchange property group.
You anticipate after college that your only problem is getting a job. The major choice of renting or buying a home quickly arises. It is intertwined with your career, family and lifecycle.
Real estate will subtly control your life. Early on, you save whatever you can after paying college debt, for a home down payment. One day, you are ready to buy your share of the American Dream. Should you buy a home for your current lifestyle, or anticipate a family? We already stressed above, you make your own choices.
Your first home, a starter home, is a major commitment of time and financial resources. The average family stays put in their first home for 11 years. As your family grows and career advances, you may look to trade up to a better neighborhood and finer home. If you study a chart of U.S. average home prices, you see a stark change in the yearly appreciation, from previous decades. The belief that real estate prices always rise, no longer holds. Plus, in some areas it is flat or has fallen. The math is you cannot sell your current home, until it has appreciated. That gain enables you to make a larger down payment on a more expensive home.
With that home, comes a mortgage. Your parents spent around 1.9 times their annual income on a home. This generation is spending 2.6 times. Ownership now means you have much less discretionary spending money. Average real estate prices are down since the crash of 2006. It is not good news, because so are average salaries.
Real estate is no longer as liquid, as in previous decades. It will take longer to find a buyer. The additional legal and financial transactional costs are sizeable. With these factors, the casualty is your career flexibility and freedom. You cannot easily change jobs, with the burden of home ownership.
With this new insight, you appreciate accepting your first job involves more than the pay, title and location. Where will you likely be living, when planning to buy a home?
Only Peter Pan can say, “I won’t grow up”.
Jacob Maslow is the founder and editor of Legal Scoops.