Are you stuck in the mindset that your dream home is out of reach? We have the tips you need to finally get into the house of your dreams!
A swimming pool in which you can swim in even in winter.
A garden filled with vibrant and deliciously fragrant flowers.
A smart home that sets the heating by itself to keep the family comfortable throughout the year.
The list of dream features most people want in their perfect home is long. But they all have one thing in common. They will never happen in real life. Indeed, the majority homeowners don’t believe that there could be such a thing as a dream home. A dream home is just a home you dream about, right?
Ultimately, what your dream home says about you is that you are not satisfied with your current property. This asks an important question. Is worth investing time and money in a property that doesn’t entirely suits you.
If you’ve got the ambition to see your dream come true, you need to be ready for the challenges it will bring. Indeed, property prices are on the rise, both for new and old buildings. This makes it more and more difficult for families to find their home sweet home without taking a significant financial toll. Indeed, you can’t embark on a home hunt unprepared. However, you don’t have to break the bank to find your perfect home. All it takes is a little creative thinking. There will be a lot of calculated risks and plenty of smart investment strategies!
Crunching the Numbers
First, and foremost, becoming a homeowner – whether you’re upsizing your current home or buying your first one – is a complicated process and a substantial financial commitment. Consequently, calculating the true cost of your property is an essential step.
Let’s clarify something right now: The price tag is not the real cost of your home, far from it! The price tag reflects the value of the property. However, it doesn’t include additional expenses such as the stamp duty when you purchase the property. It doesn’t even include other homeowners’ charges such as insurance fees or renovation costs.
In other words, when you compare properties on price only, you are missing essential information that can help you to define which housing loan options are best for you.
For first-time homeowners, a mistake can be costly! After all, miscalculations could leave you without pocket money in no time. Therefore you want to ensure that you dedicate time and effort in compiling a list of all the costs.
It might seem overkill, but almost 40% of homeowners exceed their initial estimations. So if you want to afford your dream home, you need to know exactly how much it will cost you.
Option 1: Sell Your Current Home
If you’ve got no plan to invest in the property market for financial purpose, the equation you have to solve is when to best sell your current home to build up enough capital for the next home.
For many homeowners in a similar position, the best solution is to opt for a bridge mortgage. this option lets you pay for the mortgage of your dream home until you can sell the former property. The advantage is that you can add improvements and small fixes to increase the value of your family home and sell with a maximized profit.
An exciting and family-friendly garden can appeal to home buyers with young children. The addition of wildlife accessories, such as a birdhouse or a pond, help to enhance the outdoor experience for potential buyers. If you want to attract modern families, you can add environmentally-friendly solutions, from a modern and renovated electrical system – with energy-saving light bulbs – to smart meter to control energy consumption.
You will also need to put on the market a house that requires little to no renovation work to obtain the highest price. Consequently, you should ensure that rooms that tend to show signs of wear and tear such as the bathroom and the kitchen have been recently updated.
Option 2: Can House-Flipping be the Answer?
Finding your dream home takes time. But while you’re hunting for the best property, you can make the most of the market to build up the capital you need to upgrade your home.
House-flipping is a popular investment strategy to maximize profits. The principle is simple in theory. You buy a house which you sell at a higher price to generate a profitable transaction. But, in practice, effective house-flipping takes some hard work.
A lot of amateur house-flippers drive themselves into debts as a result of miscalculations. Crunching out numbers is more important than ever. You need to start by finding properties you can afford to invest in.
The secret is to ignore real estate agencies and focus on property auctions – you can find homes from as low as $1! It’s your responsibility to research the property condition and legal situation – whether it has outstanding back taxes, code violations, etc. – before purchase. But you’ll find that more often than not, most properties in auctions are within your budget. Do make sure to add renovation costs to your calculations.
Ideally, you should work with experts who are familiar with the specific legal, accounting and construction needs of properties. You need to be comfortable with a little DIY. Most house-flippers need to perform the majority of renovation works by themselves – except for electrical and plumbing repairs that need to be trusted to a specialist.
Option 3: Have You Considered a Buy-to-Rent Property?
The property market offers another alternative to building up capital, and it’s to invest in rentals. From a homeowner’s perspective, it implies buying a second property that serves as rental only to generate an additional source of income.
The main problem with buying a rental is that it increases your mortgage duties. This makes it more difficult to obtain an additional mortgage loan for your dream property.
However, holiday rentals are among the most profitable property investments. They are so valuable that they can pay for themselves, making it easier to manage financially.
Holiday homeowners can select attractive destinations that are popular and can, therefore, cover their running costs through rental income only. A holiday home can be the perfect solution to afford your dream home, using the excess income as a source of funding.
Option 4: Let Your Side-Hustle Do the Hard Work
Side hustle refers to anything you can do to make extra money outside of your full-time job. However, when you can make money doing everything and anything, you need to put your thinking cap on to figure out the best approach.
Ultimately, you want a side hustle that makes the most of your time. Consequently, you need to shift your mindset from using your spare time to make a little money on the side to build a side hustle that is scalable, aka building a company. Something as simple as buying a few extra concert tickets that you can resell at the best price can be profitable, especially if you get pre-sale discounts and codes.
Option 5: Saving Won’t do Without Careful Investing
Saving money towards your big purchase is, of course, the most sensible approach to generate the capital you need. However, saving only won’t get you closer to your dream home.
Instead, you can make the money work for you through a diversified investment portfolio. You don’t need to invest big lumps of money. You can invest small amounts – so you don’t worry about harmful fluctuations – that can build up to get more out of your money.
The bottom line is that your dream house doesn’t have to be an impossible dream. You can build up your funds towards your ideal home as long as you get a clear insight of value and costs. Smart investments and business strategies are the keystones of homeownership.
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Michele is a Family Life Educator. She is a mom to 5 kids and loves helping others strengthen their families! When she is not blogging she is spending time with her family and running around drinking Diet Coke trying to get everything done!