My dream of becoming a homeowner started about 10 years ago. After renting for all of my adult life, I was growing tired of sharing the laundry room, parking spaces and walls. I was really looking forward to some of the perks of homeownership.
Finding the right rental
At the time, my husband and I were not ready to become homeowners but we knew we had to start planning for it. Our first rental after getting married was in an urban area where the rent was low and all utilities were included. We lived there for about 3 years but then decided we didn’t want to deal with the hassle of street parking anymore and we wanted a safer neighborhood. We started by finding a rental that included all or most of the utilities. Our strategy was to get the most bang for our buck and still continue to save for a future home. After looking at a few places we decided on a nice and spacious one bedroom apartment which included all utilities except for electric. The apartment complex also had their own parking at no additional cost.
Compromise on your rental
We comprised on this because we originally wanted a two bedroom but they were a lot more money and not really worth it in my opinion. We stuck to our strategy of getting an affordable apartment and we didn’t get lured in by fancy places that were overcharging because the rental was more modern. I’m so glad we decided to rent the one bedroom. I’ll be honest that the kitchen and bathroom were outdated but that wasn’t a deal breaker for us. The important thing was that our costs were low and we were able to save a lot of money on a monthly basis.
After finding the right rental we decided to live on one income in order to accelerate our savings. We wanted to save enough to put at least 20% down and avoid paying PMI (Private Mortgage Insurance). In a few years we achieved that and we were ready to start searching for a home.
Finding the right home
The year we started looking for homes was in the Fall of 2008. That was about five years after first getting married and we had lived in a couple of places by then. We had a good knowledge about our surrounding neighborhoods and we felt ready to buy. At that time home prices in our area were still pretty high. We were looking to pay between $300k to $350k for a modest 3 bed, 2 bath home. We were really just looking and kind of getting an idea of the market and the different types of homes out there. We started our search on home sites such as Zillow and we visited a few open houses on the weekends. It was very helpful to see what we could get for our money at the time and it exposed us to new neighborhoods we had not considered.
Don’t rush to buy
In 2009 we decided to put our home buying plans on hold. The whole economy was just a mess and the housing market was as well, so it just didn’t feel right to make such a huge purchase at a time of such uncertainty. I’m glad we decided to hold off because just three years later prices had plummeted. In the meantime, we kept our savings in tact and actually had a bit more saved up. Once the dust settled we entered the housing market again in 2012. We ended up buying a home that was $100k less than our original budget. Just a few years before this home would have sold for over $300k. I know some of my neighbors paid that much for similar homes because they bought at the height of the market.
In the end several strategies helped us in becoming homeowners
- Our strategy of finding an affordable rental paid off. We didn’t get lured in by fancy and expensive apartments.
- We compromised and found an affordable rental in a safe neighborhood with almost all utilities and parking included in the price.
- We lived on one income while we rented which helped us accelerate our savings. It also kept us from over spending on fancy cars and other frivolous items.
- We stayed in tune to the economy and with how we felt about it and held off on buying at the height of the market. This is an important point because buying a home can be very emotional and you can easily get caught up in the excitement of the house hunt. Sometimes it’s worth taking a step back to reevaluate the situation.
Becoming a homeowner is a dream for many people. Don’t get discouraged if you feel that it will never happen for you. Start planning for it now. Keep an eye on the housing market. Learn everything you can about homeownership and remember there’s nothing wrong with renting. Things happen for a reason but one day you will achieve your dream (if homeownership is your dream). In the meantime, save, save, save. Believe me, you will need that money when you become a homeowner and you will be happy you saved it.
Photo by: Flickr
Are you dreaming of becoming a homeowner? If you own, what advice do you have for renters who want to become homeowners?