Why People Under 30 Shouldn't Consider Buying a Home, According to Grant Cardone

In the United States, homeownership has long been an essential part of life. In addition to the personal satisfaction that comes with owning your home, the equity you accumulate creates wealth and can provide you with financial stability.

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It’s not for lack of ambition that older Zoomers and younger millennials are finding it harder than their predecessors to afford a home in 2024.

“Buying a home is no longer the ‘American Dream,’” according to real estate guru and financial motivational speaker Grant Cardone.

Speaking of buying a home, the CEO of Cardone Capital and creator of “The 10X Rule” franchise recently posted the following on his X feed (formerly Twitter).

“Anyone under 30 should not even consider buying a home right now.”

One reason is the amount of money you will have to pay each year.

Citing an average home price of $436,000 and a total annual expense of $50,000, or $4,200 per month, Cardone listed the following costs homeowners face:

Interest
Property taxes
Homeowners Association (HOA) Dues
PMI (private mortgage insurance)
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“You can rent for less than $2,000 with no long-term commitment, no down payment and still be mobile,” Cordone wrote.

The current economic climate creates a complex set of obstacles for young people looking to become homeowners. With wages below the cost of living and many people overwhelmed by credit card debt, saving for a down payment can be difficult.

Considering how brokerage fees, maintenance costs and property taxes add to the initial sales price, Cardone may be right that “buying a home is arguably the worst investment people can make, but it’s also the most common.” Rather than fight stubbornly high demand and skyrocketing mortgage rates and real estate costs, more and more people are choosing to stay renters longer.

For Cardone, this is exactly the way forward for young Americans, but that doesn’t mean Gen Z and millennial investors should miss out on the potential returns from residential, multifamily and commercial real estate projects. Real estate can be a great long-term investment because it typically appreciates over time. Passive investors interested in real estate have plenty of opportunities to make money without the traditional approach to homeownership, where you start with a smaller, cheaper home, sell it for a profit to buy a more expensive home and work your way up.

Even if they themselves put off buying a home, young Americans can invest passively in real estate through syndications, where a group of investors pool their capital to buy a property, by investing in real estate investment trusts or by crowdfunding on a platform like Cityfunds.

Keep in mind that real estate is a long-term investment with no guarantee of profit. Only invest what you can afford to have over several years and always consult a financial advisor before resorting to debt to finance a real estate investment.