When purchasing a home, young adults often have different priorities than in other life stages. It will likely be their first home, but they do not have enough financial stability yet.
Young adults should also be aware of potential obstacles when purchasing their first home. A common issue is student loan debt. If you're still carrying some student loans, you may be unable to afford a larger mortgage. In addition, many young adults don't have as much saved up for a down payment as older buyers. It can make it more challenging to get a mortgage approved. Another obstacle is a lack of credit history. If you haven't been using credit long, you may not have the same borrowing power as someone with a more extended credit history.
Assuming you can overcome these obstacles, what should you look for in an ideal first home? Below are some home options and situations that would benefit young adults when buying a house.
Apartment Rentals
For several reasons, renting an apartment is a better option than purchasing a home for young adults just starting their independent lives. For one, renting gives you more flexibility. If your job situation changes or you want to move to a new city, it's much easier to do when renting an apartment than when you own a home.
Additionally, apartments typically require less maintenance and repairs than homes, which can be a significant expense for young adults just starting. Finally, renting an apartment is often much more affordable than buying a home, especially if you don't have a lot of money saved up for a down payment.
Finding a great first apartment can be a fun experience, especially if you have support finding a student home and throughout your tenancy. Having support and guidance through the renting process, whether you're looking to rent a private studio, shared home, or a house for you and a friend, can be incredibly useful.
However, there is a downside to renting. The property is not yours, and you will likely never see a return on your investment. Buying a home may be a better option if you stay in the same place for several years.
Condominium Units
A condo is another excellent housing option for young adults. Like apartments, they are typically more affordable than single-family homes. They also require less maintenance, as the association takes care of many exterior repairs and upkeep.
Another advantage of condos is that they often have great amenities, such as pools, gyms, and community rooms-something you wouldn't typically find in an apartment complex. And if you purchase a condo near downtown or in a popular urban area, you may have access to nightlife and other activities that young adults enjoy.
Fortunately, you can find established condominium developers all around urban neighborhoods, which means you have plenty of options. Finding the most affordable option can help you save up on your purchase.
One downside to condos is that you will have to pay monthly association fees and mortgage payments. These fees can add up, so be sure to factor them into your budget. Additionally, you will likely have less privacy in a condo than in a single-family home since those thin walls have neighbors on the other side.
Townhomes
A townhome is similar to a condo but typically has a private entrance and yard. That makes townhomes a great middle-ground between apartments and single-family homes. You'll have more space than an apartment, but you won't be responsible for maintaining the property's exterior like you would be in a house.
Like condos, townhomes often have amenities, such as pools and gyms. They also have the added benefit of being located in safe, family-friendly neighborhoods. And if you're looking for a more affordable option, townhomes are often less expensive than single-family homes. There is also a chance that the value of your townhome will go up over time so that you may see a return on your investment.
However, you will likely have neighbors above and below you, which means noise can be an issue. Additionally, association fees can add up, and you may not have as much privacy as you would in a single-family home.
Co-Owning with Family or Friends
If you're looking for an affordable housing option and don't mind living with others, co-owning a property with family or friends is a great option. You can split the mortgage payment, making it more affordable. Plus, you'll have someone to help with maintenance and repairs.
Just be sure that you trust the person or persons you plan to live with within your home. You should also have a solid agreement outlining everyone's responsibilities and what happens if someone wants to sell the property.
Conclusion
There are many different housing options for young adults. It's essential to consider your needs and budget when choosing the best option for you. Renting an apartment is typically more affordable than buying a home and requires less maintenance.
Condominiums and townhomes are great middle-ground options, offering more space than an apartment but less responsibility than a single-family home. And finally, co-owning a property with family or friends is a great way to make ownership more affordable.
