Getting on the Ladder to Homeownership

By on 6 August, 2018 in Real Estate, Sandra Nickel with 0 Comments

Recently I read a blog post about Millenials and their being largely absent from the ranks of homeownership. It delved pretty deeply into the factors that might contribute to that situation.

“Settling down is being pushed further out,” the article observed. And that made me think of my two youngest nieces, Emily and Lilly, the only ones in my family who fit into the Millenial category (age 22-37 as of 2018). Born in the late 80’s just 13 months apart, the girls grew up on a “ranchette” in California. To date neither is married. And I think today only one is in a serious relationship.

Why? Who knows! And I did observe that at as teenagers these girls hung out in groups rather than pairing off the way we did when I was a teen. Was it because the parents “helicoptered” them, keeping them from the potentially negative experiences and bumps and bruises that caused my generation to mature earlier? Maybe. Were they gun-shy about commitment because they saw so many failed marriages? Or could the phenomenon have its roots in the economy?

“High student loan debt is tightening Millenials’ wallets,” reports the article. While I doubt my nieces have that problem, it certainly affects the ability of many Midtown Montgomery young adults with whom I come in contact. In fact, It’s not at all unusual for me to talk with would-be first time home buyers and learn they owe $50,000 or more. Small wonder they’re still living under their parents’ roofs!

What the article did not say and I believe also keeps Millenials in apartments or their families’ homes: the HGTV effect. When bought my first house at 26, my expectations were minimal. I was willing and in fact did take on a modest home that had only one bath, lacked central air and needed plenty of work.

I didn’t expect to have the space or the niceties of my parental home. Today’s buyers, on the other hand, have been trained by HGTV to expect 2 full baths, granite countertops, stainless appliances, fresh paint and gleaming floors, and landscaping worthy of a magazine layout.

“How can the industry overcome these challenges,” the author asks. Her answers focused mainly on down payment assistance programs. And I’d like to suggest a different approach: Millenials, why not focus your attentions on a partially occupied duplex as close to your desired neighborhood as your budget will allow. You can buy that duplex with financing as favorable as an owner-occupied single family residence, and the tenant in the other unit will help you make the payments!

Be willing to do a little work. After all, painting walls and woodwork never hurt anyone! Live in that duplex a few years, then move up to a single family. You could sell the duplex to get the money for a down payment. Or, you might just keep that duplex and get the down payment elsewhere.

One of my few life regrets is that I did not keep that first home. Nor the second one. But since the I’ve wised up and kept my homes, and it’s allowed my husband and me to create a nice portfolio of rentals. So, Millenials, think duplex or triplex. It can get you onto the ladder of homeownership and perhaps into becoming a real estate baron or baroness!

Sandra Nickel has been listing and selling residential real estate for over 30 years, most with an intense focus on Montgomery’s Midtown neighborhoods. Sandra serves on the Mid-Alabama Coalition for the Homeless, the Cloverdale Business Coalition, Historic Southview, the Volunteer and Information Center, Landmarks Foundation and her own neighborhood Garden District Preservation Association.

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