Mrs. Ibukun Adebayo-Adedayo, a financial adviser, has urged the youths to embrace the mortgage policy to own their homes early in life instead of paying rents for the better part of their lives.
She explained that money spent on rent payment could be better channeled in mortgage finance in order to own a home and live a stable and accomplished life.
She told Housing News that young Nigerians should start planning to own their houses at age 30 and from the moment of their first employment..
Adebayo-Adedayo, a medical doctor, noted that, “home ownership is crucial to financial freedom, increases net-worth, provides rental savings, and increases investment and leverage potential’’.
She spoke on house ownership by middle income earners and explained: “Imagine planning to own your home by the time you are 30 years old; and beginning to work towards it from the time of getting your first job’.
“Having a space that is truly yours signals stability and accomplishment.’’
Discouraging youths from sinking into rent payment syndrome, Adebayo-Adedayo said that the amount going for rent payment could be invested in mortgage payment for eventual ownership of a property.
“Have you ever thought about paying in mortgage rentals, the same amount you would have paid in rent; or just slightly higher? But the property is yours, appreciating annually; sometimes having the value appreciation on your house exceeding your annual mortgage payments,’’ she stressed..
She urged youths to focus on buying homes with convenient payment plan or on a mortgage, noting that with a payment plan for ownership, “you begin to pay yourself rather than paying your landlord.
“If well planned, and with the right advisor, when you combine the annual rental savings (rent that you would have paid for living in a similar property), with annual capital appreciation (increase in the house value) of the house purchased, mortgage rental payments would be less (even in the Nigerian high interest rate regimes).
“This implies that, if well structured, value addition is greater than value expended on annual mortgage rentals; plus the sense of security and stability that owning your home delivers which is unquantifiable intangible value.
“In contrast, house rent is plain vanilla expenditure which provides the renter with no returns, asides providing you a place to lay your head, and in addition, all further expenditure on house repairs and maintenance also hold no long term value for the renter. Finally, rent puts you at the mercy of the house owner with respect to major house repairs, and rental rates,’’ she emphasised..
“Many young people and families shove home ownership aside as a task for the future and resort to paying rents perpetually.
“The youths must look at the options available, speak to real estate advisors and work with experts in the industry to find an easy approach to own a home.
She counselled against the perception that “the process of buying a first home is daunting and not easily surmountable,’’ noting that with increased awareness, education and advocacy information about ease of owning a home will make the process appear less arduous. ‘
“Nevertheless, it is imperative to note that, when appropriately planned and structured, the hurdles of home ownership become significantly less and easier to transcend, Adebayo-Adedayo noted..
Ibukun Adedayo, is a medical doctor turned financial advisory expert with a penchant for real estate finance and an advocate for home ownership for middle income earners.
By Biola Lawal