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Honored Contributor
Posts: 30,108
Registered: ‎03-12-2010

Re: Out of the mouths of babes ( or Millennials)

@Abrowneyegirl Interesting he should think that way.  I think he's just facing reality.

 

Just last night I heard on the news that Millennials are more in debt between credit card and college than any group in years past.

 

I try not to group people in one mindset or another.  But, as you can see, I'm not doing a very good job.  

 

Here's a statistic for everyone.  There aren't enough houses for those who want to buy them....houses already built.  I've read different reasons for this.  One is that there aren't enough QUALIFIED people to build these houses (key word qualified).  

 

Everything that we take for granted in our house (that makes us comfortable) is more complex than ever.  It takes skill and know how to work on, build and design houses and what's in them.  

 

I know of someone who just finished school to learn how to install and work on heating and air conditioning units.  This young man agreed to work for the company that paid to send him to school for 1 years (to pay back).  He's been going to school for months to learn his trade.

 

It's no longer a matter of learning the 'trade' from someone else.  Just like computers, equipment is always changing and becoming more complex, updates are always required.

 

Just saying that (again, I'm slapping myself on the hand) so many Millennials seem to want what they want now and not wait and save for it.....I have to wonder if some of that isn't what's going on with SOME of them.

 

I'm not in any way saying that's what's going on with your friend.  I have no idea. Just posting my observations and thoughts.

 

I do know a little about the building business.  My late husband was a builder.  He was constantly complaining that he couldn't find people who (as he put it) "knew what they were doing".

 

When he died I took over the businesses.  Due to my age and frustration (similar to his) I closed out all of the businesses and find myself much happier.

 

My youngest daughter (she'd kill me if she knew I was referring to her as a Milennial, but she is) spends a lot of time asking me to buy her a house in Colorado.  She just doesn't get it when I say, "Show me you can save and pay for everything that goes with a house".

 

Her answer, "If Daddy was alive, he'd buy me one".  She's right, but he isn't here.

 

I don't mean to make her sound like a spoiled brat, she definitely isn't....at all.  She's wonderful, kind and good to me.  However, no one is perfect....are they?

Honored Contributor
Posts: 8,179
Registered: ‎03-10-2010

Re: Out of the mouths of babes ( or Millennials)

Renting or owning have pros and cons. Your friends son is correct, one truly never owns their home outright with those properly taxes. The millennials and many Generation X's have a more difficult time with being able to buy a home  etc., then past generations. Many millennials have to have several roommates to rent a place depending where you live. I see so many ads on craiglist for people over 40 who can only afford to rent a room. Life is tough, don't judge. Yes, some make bad choices, but many are just trying to survive and work hard. (with little pay or benefits)

Honored Contributor
Posts: 10,597
Registered: ‎11-24-2013

Re: Out of the mouths of babes ( or Millennials)

That son sounds like a real kill joy.

Honored Contributor
Posts: 32,687
Registered: ‎08-23-2010

Re: Out of the mouths of babes ( or Millennials)

[ Edited ]

@Abrowneyegirl wrote:

We were out to dinner with friends who just sold there home and had been happy to have sold it for over $100,000 more than they paid until ..............their son who is a very bright guy in the finance world ran the numbers.

Mind you their son is a millennial who makes a VERY good living and is very against the "shackles of homeownership"  although he does invest in commercial real estate on the side.

 

He ran the numbers of what his parents spent on:

taxes

interest on the loan

up-keep- new hot water tank, new roof, appliances

landscaping/yard care

general maintenance

Etc.....

 

and of course they are in the "hole" there is no actual profit.

 

Their son and his friends can not comprehend the idea of buying something that you have to continually pay taxes on every year you own it,  in addition to all the other on-going expenses.  From a financial business model it does not make sense to them.

 

It was an interesting and sobering perspective on how times are changing.


 

@Abrowneyegirl

 

A few things come to mind here ......

 

First, this young man obviously hasn't filed many tax returns and know the importance of "deductible expenses".

 

Secondly, housing prices have skyrocketed over the past several decades .... in most places.    A home selling for $100k today (if you can find one) might have only cost $35k when it was brand new.   At some point, however, prices top out and start to drop.   If you saw a home that you considered a bargain at $150k, great, but if the price was then raised to, say, $4 million .....  who would want it? 

 

Thirdly, most people don't buy a home with the primary intention of making a profit. 

 

Fourth, home ownership isn't for everyone .....  even Susie Orman said not everyone should buy a home!

 

BTW .....   my parents first mortgage was $83 a month  ....   and they both worried about paying it off .... the fear mentality left over from the Great Depression.   Wealthy people don't consider whether they'll ever be able to pay off a home ...  other financial considerations are much more important.

 

Maybe he's right ....  for his circumstances.   Many millenials have embarrassingly high student loan debt that has to be repaid.   Buying a home might be the worst thing he could do at this stage in his life.   Fifteen years from now, he might have a different perspective.   

 

 

Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010

Re: Out of the mouths of babes ( or Millennials)

[ Edited ]

When we sold our Pa home we added up everything we had put into it - new BR and kitchen and other repairs and replacements, plus 28 years of taxes and what we paid for the house originally. We came out $14,000 over what we had put in! So basically, we had lived there 28 years for free with $500 a year in profit. And that was in 2010 - the height of the recession.

As for the OP's son - IMO , homes are for families. I never really got why single people want to be tied down to the expense, the upkeep, lawn care etc of home ownership. It didn't appeal to me when I was single.

Honored Contributor
Posts: 26,312
Registered: ‎03-10-2010

Re: Out of the mouths of babes ( or Millennials)


@missy1 wrote:

Renting or owning have pros and cons. Your friends son is correct, one truly never owns their home outright with those properly taxes. The millennials and many Generation X's have a more difficult time with being able to buy a home  etc., then past generations. Many millennials have to have several roommates to rent a place depending where you live. I see so many ads on craiglist for people over 40 who can only afford to rent a room. Life is tough, don't judge. Yes, some make bad choices, but many are just trying to survive and work hard. (with little pay or benefits)


Property taxes are outmoded.  There are too many people living in rentals these days, and the taxes should be based on sales and income. 

Esteemed Contributor
Posts: 6,162
Registered: ‎03-10-2010

Re: Out of the mouths of babes ( or Millennials)

 

 

It's tough for millennials. They grew up in a world of credit cards, paying for technology and high college costs. Young adults get married later, which impacts combined incomes needed for home purchases. They wonder if social security will be available. Whereas my first home was a priority purchase in early 20s, two of my kids' first homes were purhcased in early 30s and 35. Single daughter (age 30) may not be able to purchase a home until she combines income with a partner. Tougher young adult life than I had.      

"I took a walk in the woods and came out taller than the trees." Henry David Thoreau
Honored Contributor
Posts: 27,887
Registered: ‎05-22-2016

Re: Out of the mouths of babes ( or Millennials)

[ Edited ]

In my neighborhood there were two houses that sold recently...to one couple in their mid--twenties and to the other couple in their late twenties. Age of the buyer has nothing to do with the buyer mentality or attitude towards owning a house. Not all young people want to rent either.

Respected Contributor
Posts: 3,813
Registered: ‎03-09-2010

Re: Out of the mouths of babes ( or Millennials)

Owned homes all of my life but I can see pros and cons to both renting and owning.  

 

As for that tax deduction, think about this.   Say you have 10K in interest paid on your mortgage.   You don't get all 10K at tax time.  Say you are in a 25% tax bracket.   You get $2500 in deductions.   So, you've paid the bank or mortgage company 10K to 'save' $2500.   Not a great financial decision on the face of it.  

Esteemed Contributor
Posts: 5,839
Registered: ‎04-14-2013

Re: Out of the mouths of babes ( or Millennials)

I was 40 when we bought our first home.  Renting had it's downsides, like, they are raising it!  

 

It's like floating a loan - you pay along, and at the end, get a pay back.  The kick back was that you get to live in a place of your own.

 

Even better now is, we own in a no HOA community.  Now I really own my own property.

Cogito ergo sum