Obviously, you can buy any type of home, in any location that suits you if you have the money and the good credit to pay for it. You are free to make a good choice or a bad one, to pay too much or to get a great deal.
• In the push to buy, have you stopped to decide what is driving you into homeownership in the first place?
• With this in mind, are you sure you’re well equipped to buy what’s best for you?
The U.S. Census Bureau (census.gov), which recently released statistics on homeownership for the third quarter of 2019, revealed that “the homeownership rate of 64.8 percent was not statistically different from the rate in the third quarter 2018 (64.4
• Of the nearly 123 million occupied housing units in the US, almost 57 percent of them are owner occupied.
• Although homeownership rates were highest in the Midwest (69.0 percent), homeownership levels have not statistically differed from rates a year ago in the Midwest, Northeast, and West.
Homeownership is valued and is a persistent trend, but not an escalating one. Existing homeowners bought for a variety of reasons over a wide time frame. Some love where they are and what they bought; some are disgruntled; some are planning to move again for reasons that matter to them.
What is your main reason for buying a house? That is, how will owning a home improve your life and that of your family?
Six Top Reasons For Buying A Home
Prioritize the following list of Six Top Reasons For Buying A Home to clarify exactly why you are buying real estate and how to do it well:
#1: To Gain More Living Space
Has your family expanded or are you launching a home-based venture? Or, do you just love the idea of room to spread out, inside and outside? Space costs money, so if you want to keep costs down, smaller is better. How have you arrived at your desired square footage? Just following “the pack” or is it based on experience? Clarify whether you need more space for living and sharing or for storing your ultimately-expendable “stuff.”
Reality Tip: Good design is more valuable than square footage. Cleverly-designed traffic flow, room placement, storage utilization, lighting (including windows and skylights), and interior decor (including furnishings) can make a small house feel like a spacious home. The more you learn about how good design pays off, the more effectively you can evaluate the true value of any property you view.
#2: To Further Career & Income Development
If a location puts you near work, clarify how stable the employer and your job are. However, if mobility and career flexibility are essential to your chosen profession, buying a home now may not be the best plan. If career research confirms that you may have to move out of the area in a few years to get ahead, you might not recoup the cost of buying and maintaining a home in that short ownership period. Renting may be the best approach.
Reality Tip: If you love this location and hope to return to it when your career is established, buy now and rent out the house while your career takes you away. This property can function as collateral for buying more real estate and will provide income and equity-building potential. If you love the location, this strategy may keep you from being squeezed later out if area prices increase while you’re away.
#3: To Find a More Affordable Location
If all you can afford to do in your current area is rent, buying a home will probably require a move to a new area. How does that balance against commuting costs, work potential, amenities, and what you love about where you live now? Do the math: is it better to rent and save to invest, or buy elsewhere? Ideally, housing costs should be 30 to 35 percent of gross income. Have experienced real estate professionals fill you in on the benefits and realities of living in new areas you’re considering. For instance, even if you don’t have kids, local school quality will still have a big impact on how quickly your new location appreciates. Don’t just wander around online. Spend time walking and touring the new areas. Before you invest time looking at a lot of houses, this complete reality check will let you know whether the shift to a less-expensive neighborhood or a move further out of town makes lifestyle and financial sense.
Reality Tip: To stay in the area that means a lot to you, you might consider the shift from a detached house to an attached townhome or even a condominium. Townhomes, condominiums, and lesser locations all tend to appreciate in value more slowly than detached homes and highly-desired locations, so consider the long-term costs of settling for less at the start.
#4: To Invest & Build Equity
Determined to improve your finances by investing in a “fixer upper” and building “sweat equity” through do-it-myself renovations? The savings can be amazing, especially if you buy the best location you can afford and take advantage of the value your improvements and location add. If you are not trained or experienced in construction, invest time locating contractors who deal fairly and who have a lot of on-the-job experience. You don’t want to pay them to learn on the job. Cheap quotes and fast talk can be expensive in the long run. Recent home buyers hired a renovator to get the 30-year old home they bought looking good and to renovate bathrooms and the kitchen. That all went well, but serious problems with the foundation were glossed over by the renovator who had no experience with foundations and water issues, just decor. Those homeowners overspent on renovations and now have to refinance to tackle foundation repairs.
Reality Tip: Renovating a home yourself or hiring experts is very doable, but don’t confuse what you want with reality. Because you have and want to spend only $30,000 does not mean your planned changes will cost $30,000. Take the time to cost out construction changes and include a healthy contingency fund for surprises. Once you agree in writing on renovation details with your contractor, avoid changes. Changes drive the budget up and don’t always improve the outcome. You may benefit from investing time and perhaps a few hundred on a short consult with an interior designer or architect. They’ll fill you in on common renovation problems and usual errors before you start.
#5: To Move Ahead In Spite of Everything
Have you stayed out of the real estate market because sluggish wage growth and increasing debt make your dream home seem less affordable every year?
Time for a redo of that dream. Search out a real estate professional who specializes in helping first-time buyers maximize their advantages to make a solid move into real estate. (That’s the professional who is very interested in helping you buy well, so you’ll come to them when it’s time for you to sell and move up.)
Reality Tip: In your mind, separate interior decor from building condition and design. Decor offers a superficial, and often do-it-yourself, fix while changes and improvements to the building can be expensive, but, done well, add space and utility. Buy real estate with “solid bones” and the best location you can afford. The rest is paint and imagination which can take place gradually as you get to know the building and what really works.
#6: To Live More “Green”
Research will be your friend here. Technology and materials may be labeled “green,” but they are not always as effective as advertised. They may also be much more expensive. If you want to go “green,” make sure you know what you and everybody you hire are talking about. One home buyer opted for many environmental systems in his new build. He did not investigate installation requirements but relied on his never-done-that-before contractor to get everything right. Guess how that worked out?
Reality Tip: Environmental features can include building orientation, window placement, energy-efficient appliances, lighting, HVAC systems, landscaping for energy conservation, and long-lasting materials and technologies. A home office can be an environmental feature if it saves on commuting costs. The time spent talking to homeowners who have successfully created environmentally-sophisticated homes will be priceless. Learn from their mistakes and mis-spends, not yours.
Clarify why you want to buy a house and you’ll know what you need to investigate and understand before you start the actual search. This is how to guarantee you’ll make informed decisions about the best fit.