The 10 year plan to your dream home in 6 steps
Living in your dream home is a lofty goal for many people at some point in your life, and you may be eager to live in that grand home sooner rather than later. For many younger couples who are first time buyers, however, living in a larger, more luxurious home is simply not practical or financially feasible. Even if you are able and willing now, you may not need all the space and features at your stage of life. With the right plan of action today, you may be able to make your dream come true within a decade or less. Bottom line? Your first home may not be your dream home.
Set a Realistic Expectation for Your Dream Home
One of the first steps you should take when creating the blueprint for your dream home is to set a realistic goal. It may be in the cards for some people to own a 4,500-square foot house located in a prime location with mountain views, but for others, a 2,000-square foot house in a central and convenient neighborhood may be more realistically. You can begin shopping around for homes now to get a better idea of real estate costs in the Greater Vancouver Area or fill out the contact form on this page and we can help you with that. Visiting different neighborhoods, taking a stroll in the evening or talking to friends will help you narrow down where you want to live. By taking these steps, you can set a realistic goal for your dream home with a firm vision in mind of what your dream home may look like.
Lower your expectations for your first home
This will not be your final home. Instead of jumping to conclusions and taking on the huge responsibilities of a large mortgage for your dream home as your first home, consider that your lifestyle will change over time as will your needs in a home. Your first home should be adequate in size and in an appropriate location for you and/or your family for the next 3 to 5 years. That’s it. Forget the man cave, forget the double bathroom sinks. For a bachelor, this could be a one bedroom apartment close to transit. For a couple with young children, you may be looking at a 2-bedroom condo or townhome near parks and schools. If you can lower your standards, you may be in a better position own your dream home sooner rather than later.
Live Below Your Means Now
When you live below your means now, you will be able to save money to use as a down payment on your dream home. Living beneath your means may mean choosing a more affordable part of town to live in, opting to take a brown bag lunch to work rather than eat out every day, driving a more affordable and older car rather than a brand new one or better yet, use a bike. The more money you can save now, the easier it will be for you to afford your dream home in the future.
Focus on the bright side of a smaller home
Living in a large home can be a dream come true, but these types of properties come with expensive, and time-consuming upkeep. When only two or three people are living in the home you may find that you spend most your time in just two or three rooms of the home. If you choose to live in a smaller home now, you can focus on saving money for your dream home while also enjoying the extra time you have for life’s precious moments.
Use a Smaller, More Affordable Home to Build Equity
To achieve your ten-year plan, it is beneficial to build equity in a smaller home for the next 3-5 years. Pay more than you are required to pay monthly for your mortgage so you can pay down the mortgage quicker. When you make a mortgage payment, a portion of the payment will turn into home equity. So, the more you pay, the more equity you are building.
Set a Comfortable Savings Routine
Saving money can seem daunting to some, but it may be one of the best steps you can take to achieve your ten-year plan. One way that you can save money is an automatic withdrawal with your financial institution. You may project your budget outward over the course of a year or longer, and you can incorporate even greater savings amount into your budget when you get raises or other windfalls. Saving money eventually will become a habit for you, and after awhile, you may not even notice any difference that is making in your daily routine.
The focus for first-time buyers should be placed on building equity in real estate and on saving money for the first 3-5 years of home ownership. Through equity in your home and a growing balance in your savings account, your plans to purchase your dream home is well within reach. Contact us today so we can help you to find a great starter home fit for your lifestyle today so that you can set this plan into action.