Buying Investment PropertyHow can millennials buy real estate properties in pricey cities? by Ranah Asad February 20, 2017January 31, 2019 by Ranah Asad February 20, 2017January 31, 2019College-educated millennials are moving back in with their parents because they are not making enough money to cover housing and student loan expenses. In the future, millennials will be remembered as the first truly technologically-connected generation who could not afford to buy or rent a home.We all have this crazy image of millennials as not being interested in home-ownership or owning any kind of real estate properties. However, in reality, this is not always the case. The majority of millennials in the United States aim to own a home of their own. They consider owning a home more sensible because of financial reasons and lifestyle preferences. This includes control of living space, flexibility in future decisions, privacy, security, and living in a nice home. Yet, what holds them back is the fear of not being able to afford a home. So how can millennials afford to buy real estate properties in areas like California; the state that is considered as one of the most expensive places to live in?Related: The Best California Real Estate Markets: Affordable and Not So Affordable AreasIt is without a doubt that the California real estate market is a wealthy one. It’s known for its overwhelmingly high prices and limited housing affordability. The California real estate market is always going to be expensive due to California’s growth in economy. California is the world’s eighth largest economy and it’s the state which can foreshadow changes for the rest of the U.S. – good or bad. Maybe California’s housing affordability problem will become less of a problem as its economy improves and consumer expectations become compatible with realities of the real estate market. So with all of these high prices and unaffordable, how can millennials buy real estate properties? The answer is simple and begins with the following:1. Start with a an affordable cityNot all the neighborhoods in California are high maintenance with fancy prices. For example cities like Emeryville which is a suburb of San Francisco has a rate of 9.2% of millennial new comers. Hermosa Beach which is a suburb of Los Angeles has a rate of 3.4% of millennial new comers. And more cities like Albany or Berkeley. This is where millennials should start when they begin to plan on buying real estate properties in California.2. Down payment optionsMany millennials are unaware of down payment options. The fear from down payments and closing costs is the reason millennials are not buying homes. However, they don’t know how many down payment options they have. As Chris Ling says, “many millennials believe they are unable to afford homes, when really many of them are unaware of the different financing options that exist.” For example, some lenders underwrite loans with down payments as low as 0-6 percent. This will definitely help millennials in buying a home since they won’t have to worry about affording the down payment of 20%.3. Student loan debt vs. homeownershipMillennials tend to associate student loan debt as having a negative impact on homeownership, when in fact it does not. A Zillow analysis of the Panel Study of Income Dynamics found that homeownership increased for each successive level of education, even as student debt increased. Those who did see homeownership rates decline because of student debt, were millennials with student loans and without a degree, or those with student debt and an associate’s degree. Student loan debt should not be a reason for millennials to hold back on owning real estate properties. Those struggling with student loan debt may qualify for income-based repayment options or may be able to refinance their loans for a lower debt-to-income ratio.Related: The Millennial Effect on the Real Estate MarketCertain realities are restricting millennial access to homeownership. Many of the roadblocks stem from a lack of knowledge about the options available to finance a mortgage. Also millennials with low credit scores have options such as Federal Housing Administration loans. They provide help for applicants who have lower-credit scores and smaller down payments. Another option they have is a mortgage calculator which can help first-time home buyers research monthly payments.In the end, there is a solution to every problem. It may not be as simple as other solutions but at least it is a way to start. Millennials must always keep in mind that there are a variety of ways to being owning real estate properties and to become a homeowner. All you have to do is know your options, research them, and understand if and what are the catches to any loopholes. As Ling put it,Millennials — and first-time homebuyers in general — should never just assume they can’t afford a home. The first step to owning a home is knowing how you can finance it, so you should always research your options; buying a home may be more of a possibility than you realize.Be sure to check out Mashvisor to learn how to start buying real estate properties and for helpful guidelines for to start real estate investing. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL Affordable MarketsDown PaymentMillennials 0FacebookTwitterGoogle +PinterestLinkedin Ranah AsadRanah is a long-term content writer at Mashvisor with a degree in strategic studies who enjoys writing about all aspects of the real estate investment business. 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