There are several ways to move into your dream home in the next couple of years. Sure, money is a big factor but if you know what your options are, have the right gameplan, and devise the right strategy, nothing should be out of your reach. First, you need to understand the total costs of being a homeowner and prepare for all the financial responsibilities that await. Second, you need to settle a buy vs. build debate. Lastly, you need to make sure this is what you really want. With that in mind and without further ado, here’s how to achieve your dream house on a budget.
1. Prepare for the financial consequences
The first thing you need to do is ensure that you’re in a good enough financial state to buy a home. You need to start by paying off your debt in order to minimize your monthly expenses. Once the mortgage comes, this will be a lot difficult to pull off. Second, keep in mind that these expenses tend to be unpredictable. So, if you can, it might be a good idea to have an emergency fund. Lastly, try to be realistic about how much of a home your can actually afford. Talking to a professional accountant might be the best way to determine this.
2. The total cost of owning a home
According to a veteran buyers agent from Sydney, while the majority of people understand that there’s more to buying a home than just paying for it, the majority are unfamiliar with the cost of owning a home. You see, being a homeowner means being responsible for repairs and unexpected costs, the costs of living in a home, as well as occasional home-improvement projects. Let’s face it, what’s the point of buying a home if you can’t customize it to match the needs of your own lifestyle. Informing yourself of this would be a logical first step.
3. Buying vs. building a home
In general, it’s less costly to buy a home than build one. Also, from the fundraising standpoint, it’s easier to get a home loan than a land loan and the down payment is significantly lower. At the same time, by building a home you get to take the place of your own dreams instead of customizing the place later on. Moreover, a new home usually comes with a lower overhead, seeing as how it tends to be more energy-efficient. From the standpoint of the total value, a new home is yet to be hit by the depreciation, which means that, for the time being, its value is somewhat higher.
4. Buy an empty lot
If you decide to build a home instead of buying, you will face a decision whether to buy an empty lot or pick an old building, demolish it and look in its place. Sometimes, it’s more cost-effective to just start out by buying an empty lot and building a home there. This way, you won’t have to pay for the demolition of the old place. This is especially true if the previous edifice is in a ruinous state and consists of various materials (lead, asbestos) which have to be deposed of in a special manner. Moreover, demolishing the place itself will require a ton of paperwork.
5. Visit your dream home
Before you buy a home, pay a visit to it. If you want to build your dream home, find a similar piece of real estate and pay a visit to it. It’s one thing to dream of an open-floor home but another thing to see in person. Talk to someone who lives in a similar home and ask them about their impressions and complaints. Remember, immersion and imagination will only take you so far. Sometimes, you need a more traditional approach to research. This could potentially save you from a very bad, very big, mistake.
6. Don’t do it on your own
When buying a home, you need as much expert insight as you can get. Find the right agent, hire seasoned inspectors, and talk to a veteran accountant. Also, bring your family on board and ask them for their own opinion. Of course, in the end, it’s you who get to make a choice but each of these people will have a unique piece of feedback, sometimes containing a factor or two that you’ve missed. Remember, this is one of the biggest decisions you’ll make (financially) so you want to be as thorough as possible.
In the end, you need to understand that building your dream house on a budget depends on what your dream house actually is. Some people have unrealistic expectations, which means that achieving it on a budget is not feasible. Still, those with a bit more modest expectations could find a pretty simple method of navigating this particular situation.