Rising prices, record-high levels of student loan debt, and stagnant wages – oh my! Saving up for a down payment is no joke, especially for first-time homebuyers these days. If you or someone you know relate to these concerns, I recommend checking out these four creative ways to cope with rising housing costs and get into your dream home sooner rather than later.
1. Consider Nearby or Adjacent ZIP Codes
When looking into a desirable area, consider the nearby or adjacent neighborhoods to scout for more affordable finds. If your home is near a pricier area, home prices are expected to remain strong or even rise as demand for the area increases which puts you in a better position should you decide to sell once you build up more equity down the line.
2. Purchase a Foreclosure or Fixer-Upper
Believe it or not, home makeovers aren’t as easy as HGTV make them seem. However, purchasing a foreclosure or home that needs a little work is a smart move if you want to buy into a more expensive neighborhood and stay in your price range. According to recent research conducted by realtor.com, fixer-uppers can yield significant discounts in major urban areas — as much as 40% to 50%. The catch? Inventory may be low and the competition may be fierce.
3. Consider a Roommate
Concerned about managing your monthly payment? Consider renting out rooms in your house to a long-term roommate or on housing share apps. This will help cover your housing payment as well as give you the wiggle room to pay down your mortgage faster, pay other student loans, and maintain the lifestyle you want.
4. Try a Starter Home Before Thinking of a Forever Home
There’s no denying the fact that purchasing a home is a huge investment. However, you shouldn’t approach it with the mindset that you need to immediately get your forever home. Starting with a smaller home allows buyers to put your housing payment into equity instead of rent. Should property values rise, after a few years a buyer would then be able to upgrade into something bigger or more practical. Make sure to find something that sits comfortably in your budget once you factor in insurance, taxes, home maintenance, and discretionary funds.
While these tips may not land a first-time buyer in their ideal neighborhood straight away, equity builds over time and works in favor of the buyer. Remember: with time and patience, many may be able to cash in on the equity in their first home and move into their ideal square footage or location. My name is Sara Griffin with the Associates Realty Group and it’s my goal to not only help you buy or sell real estate, but to be your REALTOR® for life. If you have any questions, don’t hesitate to call me at 951-220-4491 or email me directly at firstname.lastname@example.org.
(Source: Client Direct)