How Millennial’s Can Buy a Home
The Federal Reserve Bank of St. Louis recently published a study that found Millennials, those born before 1984, may never recover from the recession in 2008. In opposition to Generation X or the Baby Boomer generation, Millennials are far less likely to buy a home or any real estate at all. As a result, they are more than 17% worse off financially than they would otherwise be expected to.
While taking into account appreciating home values, financing rates, and the student debt loads that Millennials are carrying, home buying can certainly be more difficult than it has been in generations past, but that does not mean it is impossible.
If willing to think outside the box, Millennials can buy property and chip away at that generational wealth gap.
Hire a Realtor
Let’s just get this one out of the way, because for some reason the idea of hiring a Realtor has become outside the box thinking. If anyone wants to buy a home or sell a home, in a competitive market they should hire a professional Realtor.
There is a lot of information on the internet about leveraging technology, valuation websites, and knowledge in the public domain to buy homes for sale. While all of that information is a great place to start and a knowledgeable consumer is one who can interview a Realtor and know their secrets, going it alone is almost always a bad financial decision. Especially when using some of the more advanced tactics.
Buy Where it Makes Sense
If the internet can help inform why you should buy where you are currently renting, there is no reason why it can’t help inform them of markets that are financially more attractive. A home buyer in New Orleans, where homes and rentals can be quite expensive, can pick up rentals in other cities where prices are much cheaper. A strong agent will serve as the eyes and ears for a good deal on a rental property out of a buyer’s home market.
Then, when it comes time to sell a home, that agent can take care of finding your new buyer.
Explore Notes and Tax Liens
If you live in a hot market, it can be understandably frustrating to drive from property to property only to fall in love with a new home and be beat out by a competing offer. Often from an investor looking to flip the property. There are ways to get around that.
Instead of competing against investors for property that is on the market, it can often make a lot of sense to try and buy a property loan that has stopped paying. It can be a bit more complicated, but there is a lot less competition and a skilled Realtor can help find these deals to get out in front of investor offers.
The same can go for tax liens. Often when homeowners stop paying their bills and move out of a property, they stop paying their taxes. While not a happy situation for the homeowner, the opportunity for the millennial trying to afford their first home is that these tax liens are a priority to be paid, even before the first mortgage. This is what’s known as “priming.”
This could allow a potential homeowner to secure a first right of refusal before other home shoppers and investors. A skilled Realtor can help find these opportunities to give their client a leg up on any potential competition.
The first step in building real wealth in property is to buy some property. The next step? To sell a home.
While Millennials may be worse off financially than previous generations due to the Great Recession that doesn’t mean they’re out of the game. If willing to think outside the box and hire the right professionals, there’s no reason why they can’t buy a home.