Column: You can be a homeowner

By Jeff Wiren, Principal Broker, Premiere Property Group, LLC for the Sherwood Sun

SHERWOOD, Ore. — I meet young people every day who feel defeated by the current economy and don’t feel like they will ever be able to own a home.  There are some real challenges in our economy, but I am here to tell you that you CAN be a homeowner.  And for many reasons, you SHOULD be a homeowner.  If you are renting, you are helping someone else build wealth in real estate. You are paying their mortgage for them! Homeowners have a substantially higher net worth compared to renters, and the sooner you get into homeownership, the more equity you will build throughout the course of your life.

If you are a 20 something-year-old reading this article, let me share three tips with you that will help create a path to homeownership:

1. Create a budget and stick to it.
   1. If you have Excel or Numbers on your computer, both have budgeting templates built in that will help you set up a simple and effective home budget.  Do it!
   2. Budget for some entertainment. The reality is that you are going to want to have some fun. Plan for it in proportion to your overall income. If you leave entertainment out of your budget you will likely go into debt for it. Putting entertainment expenses into your budget gives you the opportunity to contain them. If you budget $150 for meals out with friends, then stop going out when you hit that limit. Your friends will still want to spend time with you, just grab a six pack at Safeway and play video games in your apartment instead of going out and putting a $100-over-your-budget on your credit card.
   3. Budget to live off 90% of what your take home pay is and put 10% into savings every month. If your take home pay is $3500 per month and you put $350 per month into savings, that adds up to $4200 per year + interest. Over time that will grow into a nice down payment on your first home
2. Do NOT go out and buy a new vehicle with a high monthly payment. Find a cheap, moderately used, reliable vehicle that you can pay cash for – or that offers a super low monthly payment. Don’t worry about having a car that impresses your friends: none of them actually care what kind of car you drive. If driving a cheap car in your early 20s puts you on a financial path to be a homeowner in your late 20s or early 30s, that is the greater reward.
3. Meet with a trusted Realtor® and mortgage broker now, even if you are not planning to purchase for multiple years. Your Realtor® and mortgage broker can help you create a long term plan so that you will be able to buy your first home sooner than you expect. It’s the little tips that add up to create a significant impact over time. Your parents are also a good source of information, and I am sure they will be happy to share their years of wisdom and experience with you.

If you follow this guidance, you will be on a quicker path to homeownership than most of your peers your age. There are many other factors to consider, and a lot of hard work and sacrifice will be needed in addition. It is worth it. 

As always, if you need a trusted Realtor® to help you take the next step, I am here and would be honored to help.