The cost of buying a home is often considerable, and can feel daunting to potential homebuyers. But there are simple ways to lower that cost.
Buy a Home That’s Ripe for Updates
One sound money-saving strategy is to look for a home in need of upgrades with high returns on investments, or ROI. Kitchens and bathrooms offer some of the best ROIs; new tiles, countertops, and refaced cabinets are simple ways to add value. With an estimated 70% to 80% ROI, hardwood floors score a perfect 10 on the National Association of Realtors’ Joy Score, which measures homeowner satisfaction over upgrades. And an unfinished attic or a basement is a new living space just waiting to get created.
Go the Multi-Family Home Route
And that doesn’t mean sharing a bathroom with your in-laws! Multi-family properties — such as duplexes, triplexes, and quadplexes — offer a number of ways to offset the cost of buying a home. Two families may be able to combine their buying power to buy one property. Though a more common route is for single buyers to live in one unit and rent the rest, generating income and tax benefits through deductions on the property’s upkeep. A number of financing options, which in some cases include VA loans and FHA loans, are ideal for multi-unit properties.
Join the ADU Trend
Short for Accessory Dwelling Units, ADUs have been growing in popularity in the Dallas area since getting the zoning green light in 2018. An ADU, sometimes called a Granny Flat, is an independent unit on the lot of a single-family home. This could be an addition, a converted garage, a prefab tiny home, or a structure that’s built from the ground up. For something smaller in scale, a homebuyer might consider a Junior ADU, which is basically the same idea, but this unit can be inside a single-family home as long as it has a separate entrance.
One of the simplest ways to save money when buying a home is with an FHA loan; this government-backed option is popular with first-time homebuyers because there’s usually a minimal down payment — and that down payment can even be in the form of a gift from a close relative. Add in the fact that interest rates for FHA loans are often better than those for conventional loans (even for people with less-than-perfect credit) and you’ve got one of the best financial tools for achieving home ownership.