Buying or owing your dream home is actually within the reach, but it won’t happen overnight. Trying to skip starter homes and step straight into your dream home can have disastrous consequences. While there are certainly steps that bring your dream within reach, it’s a process that takes several years to accomplish. You don’t have to be rich or independently wealthy to afford your dream home either. Here are some foolproof steps to getting your dream home, even on the most limited budget.
Live Below Your Means
Rent and car payments are generally the two largest bills you have. Try living below your means and driving a car that is less than you can afford. This will allow you to start saving equity for your dream home.
Start Small
Remember buying your dream home is a goal to be worked towards, not something you are going to get straight out of the gate. You might consider buying a small condo or townhouse instead. Living in a condo gives you the perks of apartment living (general maintenance are taken care of through homeowner’s associations), while still helping you build equity. When you are ready to move into a house, you can sell your condo and have equity to put towards your first house.
It’s Called a “Starter Home” for a Reason
When you are ready to purchase a home for the first time, try and find a home that is less than what you can afford. Very few first-time homeowners understand the additional costs and expenses associated with owning a home. Your mortgage is only a minimal portion of the full cost of moving from renting to owning. Look for a home that is in a transitional neighborhood. Buying an older home versus new construction can also save you a great deal of money, but have it thoroughly inspected before buying so you don’t end up with a money pit instead of an equity builder.
Buy Below Market Value
One great way to build immediate equity is to buy a home below the current market value. Look for homes in a less-than-desirable area, homes that need some work or a home owner needs to sell quickly.
Invest Some Sweat Equity into Your Home
There are a huge number of upgrades that you can make to any home that doesn’t have to break the bank. Remember that the majority of homes increase in value over time because homeowners invest in them. Building a new patio or deck, upgrading the landscaping and repainting the exterior trim of your home are all DIY projects that can go a long way towards helping you get more for your home than what you paid for it.
Invest in the Right Upgrades
While you are working towards your dream home; invest in things that will increase the value of your home. While you might long for a luxury master bath complete with a soaking tub, save that for your dream home and put any money you spend on upgrades into a new roof instead.
Consider Rental Opportunities
One perk of owning your own home is the privacy it affords. When buying a home, you don’t have to sacrifice privacy for the extra income that a renter can bring in. A basement or an apartment with a separate entrance can offer you the best of both worlds. Many two-story homes can be quickly and easily converted into two separate living spaces with separate entrances. If you can find a home that already has this set-up, even better.
Be Patient
The biggest hurdle to owning your dream home is taking things step-by-step and not rushing to make your dreams a reality too quickly. Millions of Americans saw their dreams coming to a crushing halt when their homes were foreclosed on because they rushed into a home they couldn’t afford; don’t let that happen to you. Work your way up slowly and carefully, step-by-step so when the time comes to start looking for your dream home, you will be ready.
