Here are two strategies that can not only make homeownership more affordable in the short term, but turn it into a lucrative side hustle that can pay off down the road.
Transforming the Challenge of a Fixer-Upper into an Opportunity
One strategy to facilitate your entry into homeownership is to explore the option of purchasing a fixer-upper – a home that might be somewhat less visually appealing and consequently has been on the market for an extended period. According to a recent U.S. News article:
"The current state of the housing market may lead you to broaden your search for a home that fits your budget. A fixer-upper, in need of some updating and tender care, can be a favorable alternative to ready-to-move-in houses that quickly disappear from the market."
Opting for a property that requires some renovation could offer two significant advantages. Firstly, it may simplify your search for a home as you won't be fixated on finding the perfect option. Additionally, it could enable you to enter the housing market at a more affordable price point. This approach provides a cost-effective route to homeownership while presenting the potential for future financial gains.
Although the home may demand a bit of effort, investing time and energy into gradually enhancing your property not only transforms it into a cozy abode but also elevates its future market value. As you take pleasure in the process of turning a house into a home, you're concurrently building equity that can be realized when the time comes to sell.
Renting Out a Portion of Your Home To Make It More Affordable
Another savvy strategy is to purchase a home with the upfront intention of renting out a portion of it. According to a recent press release from Zillow, renting out a part of their home is already very important for most young homebuyers (see graph below):
This approach serves a strong purpose. As Manny Garcia, Senior Population Scientist at Zillow, says:
“For those first-time buyers navigating the ‘side hustle culture,’ where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help . . .”
Basically, it can help you afford your monthly mortgage payments. So if you’re open to it, renting out a portion of your home not only helps with affordability, but it also positions you as an investor and turns your home into a source of income.
Given the current affordability challenges, both of these approaches present more achievable routes to homeownership, particularly for younger buyers. If you wish to delve into these possibilities and understand how they could unfold in your local market, reach out to a reliable real estate agent for guidance.