It's important to keep the possibility in mind that you could be on the hook for other hidden homeownership expenses and plan well in advance. Here's how.
You’ve been putting money aside for a down payment every month, but prices seem to be rising faster than you can save. Car troubles, a health scare, or some other big expense comes along and wipes out any progress you’ve made. It can feel like that old dance of “one step forward and two steps back”. Frustration builds and you grow disheartened.
When homeownership feels like it’s slipping between your fingers, how do you reach out and grab it? Here are five ways to make buying a home within your reach.
Buy a duplex.
You could also look for a home with separate living quarters or a guest house, often called a “mother-in-law” unit. Live in one side and rent out the other to offset the cost of your mortgage. Not everyone is cut out for being a landlord, but if you’re willing to do it, this can be a great solution. Just make sure you’re up-to-date on the local rental laws and that you’ve prepared yourself for middle-of-the-night emergencies like a flooded bathroom or broken heating unit.
Get a roommate.
Maybe you thought your days with roomies were over when you left school, but don’t discount them just yet. Having a roommate is a great way to share the expense of a house. It’s helpful to discuss household rules and policies ahead of time to ensure a good fit and a harmonious household. A difference of opinion about what’s an acceptable level of cleanliness or how long dishes can be left in the sink can quickly add stress to a living situation. And even if your best friend becomes your roommate, it’s always important to have a rental agreement in writing.
There are a couple of ways you can list your home on Airbnb. You can offer up a single bedroom for nightly rent, with the guest sharing access to the public areas of the house with you. You can also rent out the entire house and go stay with a friend, camp, or travel when the home is rented. If you plan to Airbnb your house, it helps to have a home in a desirable area. That doesn’t have to mean a picture-perfect home with an ocean view, though. It could simply be a modest and tidy home in a community that’s close to a tourist attraction or medical facility. If the only hotel options nearby are limited or particularly expensive, that can also work in your favor.
Move to a less expensive area.
This might be a little too extreme for you, and that’s ok. However, the popularity of remote work is on the rise. If working from home is an option, you may have major flexibility in where you purchase a home. Traveling just 20 or 30 miles out of a high-density area could mean a drastic change in housing prices. If you’re willing to relocate to a different part of the country, you could slash your housing prices by 50% or more in some scenarios.
Research loan options.
While conventional loans often have the best interest rates, they usually come with more out-of-pocket costs upfront. If the downpayment is your biggest hurdle, check out government-backed loans through the Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA), or Department of Veteran Affairs (VA). These loans often allow you to get into a house with a low (or even no) down payment. Non-profits, states, and local communities sometimes offer homebuyer assistance programs, so it’s worth doing some research to find out if you qualify for any help.
Buying a house can feel like an uphill battle, but if you’re willing to use a little creativity and tenacity, your hard work will pay off. Homeownership is within your reach.