According to a 2015 Urban Institute report, delayed marriage and student loan debt are the biggest factors holding millennials back from buying homes. But though the path to homeownership is rocky, many millennials still want that “American Dream.” In fact, according to the Census Bureau, nearly 37 percent of them already own homes.
If you feel like owning your apartment or a home seems out of reach, you might want to hear the stories of your fellow cohorts who have become homeowners. Yesterday, I shared Ashley Coleman‘s experiences with borrowing from her 401K and getting an FHA loan. Today, Billy Lyons, 35, a writer and producer in New York City, shares his experiences. (Just a caveat, these are first person stories — not necessarily financial advice, so talk to a professional to see what works for you!)
(Image credit: Courtesy of Billy Lyons)
How I bought my first home:
Because Lyons, a writer and producer, works from home, his broker, Boris Sharapan Fabrikant of Compass Real Estate, wanted to find him an apartment on a quiet street.
“He also travels around the city a lot so we needed to find something close to the subway,” Fabrikant says.
Lyons purchased his home in December 2016 at age 33. He had rented in an apartment building in Williamsburg for about five years. “I had seen a lot of new construction and realized that had I bought instead of rented, my property value would have grown very quickly in a short amount of time. At a certain point, you can only look at the rising property value so long and say, “I either want or don’t want to be a part of that,'” Lyons says. He knew he’d be in New York for the long haul because his family is here.
He now owns an apartment in the West Village that has a roof deck and courtyard, as well as laundry and a gym in the building. “The most useful feature I would say is having a great, friendly staff around all of the time to help fix things and check in packages, since in my previous building residents would take my food delivery if I didn’t show up fast enough in the lobby,” he says.
Here are tips from Lyons (and his broker Fabrikant):
Find reasonable rent while you’re saving for a downpayment
Lyons says that he was paying a very reasonable rent for his studio in Williamsburg while he was saving for his home. He also was able to live at home for several years after college, he says. Increased rent is, in fact, a major hurdle for potential homeowners, according to the Urban Institute. A 1 percent increase in a household’s rent-to-income ratio decreases the likelihood of homeownership by 0.07 percentage points.
Look at a lot of homes
Lyons says he looked at about 15 to 20 unique buildings in different neighborhoods before finding his place. His location is just right for him because he is within walking distance to multiple subway lines and supermarkets.
Consider hiring a professional
When Lyons started his search, he went to open houses by himself and was forced to sign up for a bunch of mailing lists. “I basically had a bunch of brokers all trying to become my best friend overnight, which wasn’t helping me with the search process.” His advice? Find a licensed broker you trust. He knew his broker from college. “We as millennials know how to find information and how to educate ourselves when it comes to real estate,” he says. “But that doesn’t replace actually working with a professional.”