If you’re an urbanite, chances are you’ve heard of this new trend: people living in a condo they rent in the city while renting out property they own in the suburbs. A decade ago, the concept of continuing to rent when you have a perfectly good home under your own name would have seemed strange. Now, it’s rapidly becoming the norm in many major cities across the country. If you’ve contemplated hopping on this bandwagon, stop and consider whether it’s truly the best option for you.
Investment-wise, it’s not a bad idea. Young professionals are learning how to be particularly creative with their finances. Though they’re being pushed out of highly competitive and expensive housing markets in major cities, they’re finding new ways of gaining wealth. While their parents never would have dreamed of such a thing, housing prices were vastly different when they were first breaking into the market.
It’s a good way to gain passive income. The millennial generation is facing a challenging paradox. Expected to put down roots in the city in order to access higher-paying jobs, they’re unable to afford to buy property in these big cities. However, owning property outside of the city is a solid way to build your wealth over time. As long as you’re committed to taking on the responsibility of being a landlord, there is no real downside.
Commute times are such a hassle. While the suburbs are undeniably more affordable, city workers are stressed enough by the chaotic pace of modern life. Owning a home stops being enjoyable if you’re never home long enough to appreciate it, and commuters who live more than an hour outside of town are overtired, burnt out, and likely to throw in the towel eventually. If you intend to keep working in the city long-term, living in the suburbs isn’t an ideal plan.
If you change your mind, you can always move in. There is a peace of mind that comes with knowing you are a homeowner, even if you’re still also renting yourself. Should you unexpectedly lose your city job or decide to start a family, you’ll know that your suburban home is waiting for you. And, as the years pass, the value of the property will increase, meaning you can eventually sell it and invest that extra money in a property closer to the city you love.