Start With An Investment
If you don't want to live anywhere else, you can still buy without moving. You can continue to rent in your desired location while purchasing an investment property in an affordable area. That way you can start building equity that can be used towards a more expensive home in the future.
Take, for instance, Philip Garcia, who, while living in California, bought an investment property in his hometown of El Paso, Texas, which is one of the most affordable housing markets in the country. By renting out the El Paso property, he generated rental income and gained equity, which he was able to put towards buying additional homes, including his current residence in Seattle.
“I spent my 20s living in very high-cost areas (Bay Area, Los Angeles), where I wasn’t in a position to buy,” Garcia said. “But I had always been interested in building wealth through homeownership. So I looked at the savings I had built up by the time I was 31 and identified a market where I could afford to buy a home to rent out and made it happen. The math all looked good, so I did it again and again. Now, the results are better than I expected, I have three cash-flowing assets that have appreciated well since I bought them.”
Reevaluate Home Style
If you've been priced out of owning your ideal home with a yard, garage and spacious interior, consider a more modest home. Single-family homes typically cost 20% more than townhomes and 29% more than condominiums.
There are upsides to choosing a townhome or a condo. Living in a dense, walkable area with transit, parks and restaurants might offer a healthier, more environmentally friendly lifestyle than a sprawling suburb. And although townhomes and condos don't typically have private yards or garages, they often come with shared amenities.
Another strategy for affording homeownership is to find a partner to co-own. You and your buying partner could live together as roommates, treat the property as a pure investment, or explore arrangements where one partner pays rent to the other for sole occupancy.
However, if you're buying a home with someone you're not married to, it's imperative to establish a legally binding contract that outlines clear terms for sharing the property and a plan for dissolving the partnership if necessary.
In Conclusion: Stay Flexible
While the road to homeownership may seem steep, it's not an unattainable dream. Aspiring homeowners can navigate the challenges and secure a home by adopting these strategies and staying vigilant in a rapidly changing market. The key is to remain flexible, resourceful and informed so you can easily make it through the twists and turns of the housing market.