This article is featured on behalf of Andrea Gustafson.

millennial real estate investment

Millennials as a whole were brought up in a time of economic crisis, which means in general that we have no idea what we’re doing in life. Of course, this hasn’t been the script for the entirety of our lives, but generally we’re more wary of traditional investments and the overbearing economic system than previous generations.

Nowadays, everything is financed. We spend thousands (sometimes hundreds of) of dollars on degrees that just don’t reward us like they used to. Then fall out into introductory employment positions with a nice sack of student-debt lugged across our backs. Life, as a whole, seems more and more expensive and we’re not really enthralled to dump money that we don’t really have into a market we don’t really trust.

However, an investment that is overtly traditional, yet historically consistent, is real estate. All things considered, now is a fantastic time to invest in real estate as a millennial – and we’re going to tell you why.

First off – the rent versus mortgage argument wins every time. As we’re encouraged to chase our dreams and breakoff from the traditional corporate job – we flee to big, overcapacity cities that have incredibly expensive rent. What is rent? It’s money that goes straight into a homeowner’s pocket. Buying a home, living in it, and paying a mortgage is an investment that not only sustains your current living situation, but contributes towards your future. Enough mortgage payments and you’re a homeowner. Hopefully by then the value of your property has appreciated. That’s the goal.

As a whole, banks will trust you more. Once you have enough money to take out more debt (I know, terrifying! But listen to us for a second) then a bank is a lot more likely to trust you with a place of living over other investments. A bank isn’t going to jump onboard with you saying “I want to invest in a bunch of stocks” but it certainly will lend the money if you can prove you’re in a good position, have a job that can support your mortgage payments (or find a renter that does), and provide them with your good credit score (pay off those credit cards!).

On top of this, home loans have a traditionally lower interest rate than almost any other type of loan. You’ll build credit, pay off a home, and wake up one day without payments and rather an asset. Also – there’s a lot of tax benefits of owning a home as you can leverage your mortgage interest against your income tax. That’s another thing to note here.

real estate investment

This one might not be as convincing as the logistical “sell” of buying a home, but being a homeowner has huge emotional and stabilizing benefits. At the core of it, you have something valuable to your name. It’s yours. You treat it poorly, you’re going to lose on your investment. You treat it well, you stand to gain. Being that the home is an extension of you (and everyone can relate to this – even when renting) you’ll want to become more and more involved with the community. It could just be that glue that pulls your life together, settles you, and provides for your future financial stability.

Buying a home is a means of directly investing in your future. If you have a knack for foresight, you might find that you buy a home which appreciates greatly in only a years’ time. As a whole, American homes generally appreciate 4% each year. That’s just a backdrop. But on top of that, it’s a material investment. One of which you have the means to maintain and look after and if all goes to plan will pay out well in your future (one home purchased, then another purchased with the appreciation of the first is the dream come true).

Nick Evans of We Buy Houses Denver (a real estate company in Denver) says, “I decided to invest in a house at a young age and now I could honestly stop working entirely. I didn’t even know it at the time, but I was building the very blocks I’d step on in my later years).”

We understand. Investing your hard-earned money is a difficult thing to do and equally as terrifying. But with the way the market is evolving, real estate is a prime way to plan for the future, sustain your living situation, enjoy a few tax breaks and supplemental income (if you rent it), and put your money towards something that will reward you later down the road.

Millennials shouldn’t be apprehensive to get into the real estate market – they should do their own research, decide what’s practical based on their circumstance, and if the situation allows… invest in a home. Check out our guide to real estate investing in your 20s if you think this is the route for you.