When I worked as a Realtor, I learned a lot about the housing market. Affordable options can be tough to find. Many people are paying 30, 40, sometimes even more than 50% of their salary, just to keep a roof over their heads. If you’re in that situation, it may be time for drastic measures.
I don’t advocate getting huge mortgages. Foreclosures are becoming the norm, rather than isolated cases. When we buy or rent homes that we can’t afford, we are bound to lose them! There are a lot of emotions tied up with real estate. Many, many times people cling to their “dream home” and leave only when the Sherriff comes! If you’re willing to keep an open mind, read on:
1. Downsize
Why is square footage up while the average family size has shrunk? Because we all need “space.” How much is enough? If you’re a family of 4 living in 4,000 Sq. Feet, I are dare say you can downsize comfortably. Which size is right? Only you know. Individual families have their own needs, but as a whole, this societal trend towards McMansions has gotten out of control. Families can live in cottages, apartments, Tiny Houses, etc.
2. Focus on necessity over luxury
Swimming pools, 3-car garages, granite counters, whirlpool tubs and 5 bedrooms are all luxury items. We need bedrooms, a bathroom, a kitchen, and a living area. Is it nice to have extra? Of course! But at what cost? Everything beyond the basic should be carefully examined. Don’t be like Meri crying over a Wet Bar! (Don’t you just love Sister Wives?)
3. Move
Of all the options, this is the most drastic, but often has the largest financial impact. Real estate is most expensive on the East and West Coasts, while the South and Midwest are significantly cheaper. If your job allows a transfer, or you work at home, a move might be possible.
4. Investment Opportunity Housing
A house is usually a money-sucker, not a money-maker. If you buy a property that also earns income, it will cut expenses. Look at Multi-Family buildings. You can live in a Duplex and rent the other side. Small mobile home parks can be a good investment, as can super-small apartment complexes.
If none of the above is an option, and you truly can’t afford a place to live, try:
5. Shared housing
If you’re single, consider a roommate. Move in with parents or siblings. If you own a home, think about getting a renter. This should be entered into cautiously, weighing all the positives and negatives. It may be unpleasant, but it will allow you to save up enough for your own modest place.
Is your housing unaffordable?
It’s nice to hear someone suggesting that people don’t need to have such huge houses. I just shake my head when I hear that a family of 4 HAS to have at least a 6-bedroom house, because each child needs a separate bedroom, then a playroom, a guestroom, and an office! My last house had 3 bedrooms, a living room and eat-in kitchen, and the people who sold it to me had raised their six kids in it just fine!
Your post is informative and definitely an eye opener to those who live in unaffordable mansions that are money pits. In my city where the cost of real estate is astronomical many of your suggestions are already in place albeit out of necessity rather than choice: the average dwelling is a multigenerational sharing space of 800 sq ft for 6 adults. Most homes are rented in a market that is wary of renters thanks to antiquated Rent laws and owning a home remains a distant dream for many.
I love your view on keeping just what you need and not the dream. So often the dream becomes a nightmare. You end up working so much just to pay for it and your family life suffers. We try to enforce this often in our kids.
This is such a common sense approach to housing. Right now, our housing is our second highest bill each month (second to child care), and I’m thankful for the very reasonable interest rate we have.
Great insight and tips. Once again it comes down to needs and wants. Sure I wouldn’t mind a bigger house with more storage room. But do I really need it? No! What I want more is extra money in my savings account, rather than it being spent on stuff to fill up that more storage area 🙂
This is very practical advice. Peace of mind and affordability is worth more than a fancy house.
Very sound advice. So many folks are house-poor. Not only do they get bigger houses than they need, but then they have to fill them with stuff. When my husband and I bought our house, we knew we wanted the mortgage along with taxes and insurance to be affordable enough that we could pay it on one income. We found the perfect home for us. It was a foreclosure and needed a lot of work, but we looked past all that and saw that the place had really good bones. Five years later, our house appraises for double the value we bought it for. I LOVE my house, and the best news is that we did all the renovations over time and used cash only. Our house payment is still low enough for just one income.
This is really good advice. Getting caught up on living the way we want, rather than the way we can afford, is a huge mistake that can have long term repercussions.
We are lucky to live in a very affordable part of the country – and that was done on purpose! That being said I think your tips are spot on – who wants to spend so much of their money on housing so that they can’t enjoy other things!
You shared very practical tips! I live in my Grandma’s old house, and I’m the third generation on the farm. In lieu of rent, we are restoring it as we go.
Good advice–we don’t NEED a lot of the things we WANT.
These are some great options for affordable housing. I actually hear a lot about people buying potential income properties as a way to be able to afford the home of their dreams. Nice post!
Our area of the country makes housing very affordable but I am always in favor of downsizing. My dream was to have a little toy yard to dress up…boy was I surprised when I realized the house we wanted had an acre lot. The house was a steal but oh…this yard!
I live on the West Coast and I agree that housing has become unaffordable in many places. We were lucky to find a home 5 years ago that we could afford-but it had been sitting vacant for 3 years due to foreclosure and definitely needed lots of work. We are still working on it! But it is in a good neighborhood for our growing family, so it was worth it. I would definitely say lower your standards. If you have to fix a home up, you can do it over the course of years, and you can fix it to your liking. Great post!
We are currently looking at moving out of state and possibly buying our first home. I have to admit, I don’t pay much attention to the square footage! I know what I want (at least 4 bedrooms, green grass yard, fenced in yard) that is my main focus!
Really great points here. It is so easy to get swept into the glamour of larger houses and nice extras, but they come at a cost and can quickly turn into a house we thought we could afford, but can’t. We definitely bought at the top of what we should have, giving room to grow in the future, but it is difficult right now.
Great advice especially for the first time buyers/renters. We all want the things we cant afford sometimes but its always good to throw common sense into the equation.
Excellent tips. I have always been lucky enough to have made money on real estate over the last 20 years. I buy the ugliest on a good street and renovate, plus we have moved countries 3 times. Then I keep downsizing so I start to pay off my huge mortgages. Still debt, but a small manageable house now. No big luxuries but very comfy and convenient. I still dream of my house in Chile with a pool.
Some very very good advice. I have been in the situation of having a mortgage half my salary. And yep that was Northeast and property taxes is a monthly mortgage payment in some other parts of the country.
We have moved to the South now and housing is cheaper and I work towards getting my real estate license this month and the purchase of another home next year. But we will be looking for affordable and not the biggest.
Myriam
We’ve been living in an apartment, but the rent just got to be too high. We’re living at my parent’s house now in order to save money.
You share some great advice on this post! We have very affordable housing where I live in Texas. We have just enough for what we need but the houses down here can be HUGE for a small family. I would not want to clean that!
The dream of owning our own homes is still a live and sucking the hard working money from our pockets. When was it that the dream changed for the humble picket white fence to a mansion where half the bathrooms are not utilised. Over the years my dreams have changed and practicality is more my demand than size now. I only want what is needed and no more. Saves on house work as well. Thanks for really bringing that home.
Rachel.
These are very practical and informative tips. Yet, they are filled with common sense that you would think the average American would already take these into account when buying a home. However, they DON’T! Our home is very old and basic and could use MANY improvements. However, it’s PAID OFF! I don’t have a house payment. For as much as I would truly love a nicer home that I would feel comfortable hosting parties in, I am grateful for the fact that ours is paid in full.
Great post!
I live in a part of the country with CRAZY EXPENSIVE housing costs! So we still rent. And…we are a family of four in ~700 of sq. ft.! Apparently this is super duper small to many people, but we make it work because we have to. I actually wrote a blog post about how we make it work (and I plan to update it soon since we’ve rearranged some), if you’re interested: http://www.screenwriterswife.com/tips-on-how-our-family-of-four-lives-happily-in-a-small-700-sq-ft-home.html
Our housing in the UK is affordable – we wouldn’t have bought it otherwise. The housing market in the UK is quite different to the US. When we were looking for our first home over here – it was very rare to come across floor plans or indications of square footage.
I think the US mindset of bigger being better definitely impacts the choices people make when buying homes. In the UK, the average home is simply smaller (in size, not in price) something many expats really struggle with when they arrive this side of the pond.
Good options for those on a budget, thanks for coming up with the list and the good tips.
Affordable housing is not easy to find. It’s a difficult and long process; I’m in the middle of it myself and know its going to be a while before I find something. Thank you for the thoughtful post.
This is a great post and perfect timing! We would like to move and need to keep these tips in mind when looking for a new home.
Great thoughts, ideas and advice. I think it’s really important to not “force” yourself to have or be something you’re not. Be content with what you have and you can still enjoy life even if you don’t have a mansion. Great reminder for myself too. Thanks!
Great article – some people just feel the need to have things they can’t afford. That caused the market crash that in turn ruined our chances of selling our house in Florida. It sucks to be punished by other peoples poor decisions. Buy what you can afford – not what you want.
Haven’t had to experience downsizing as we’ve always lived within our means. It’s sad to think that some can’t afford the home they once loved. Our home value has decreased but not much concern for us at this point. Hopefully all will rebound.
I am always impressed when I watch those tiny homes shows on just how many people want to downsize. I think that once all our kids are gone, we might just do that ourselves. Thanks for these awesome tips.
Great advice! Housing is getting so expensive these days, but there are ways to keep it in check. Thanks for sharing!
I feel like housing most places is becoming less affordable. Great tips.
Great advice. Downsizing has been great for my family. I like living in smaller places…less to clean!
Like Brittney above, you had me at the word “downsize.” We don’t need ginormous houses, and my family’s been WAY happier since we’ve gone “less is more.”
Thank you for this post!
This is very practical advice. Peace of mind and affordability is worth more than a fancy house.
Very practical and sound advice. Perfect page to bookmark and share.
We bought our house in Florida in 2006 at the height of the market. Though our house was very modest when the market tanked and so many of our neighbors went into foreclosure we were upside down on our house. We bought a fixer upper at the time and still have quite a bit of work to do that we would be lucky to break even. I tell my husband all the time if I could do it again I would rent!
I watch all of these shows on TV where people are shopping for a house and they just HAVE to have 5 bedrooms AND an office, plus a swimming pool, a garage, a massive kitchen and a house with an open floor plan. While all of these would be nice to have, they are not necessities. I think so many times people get in over their heads and then have to cut back in other areas just to afford their house….not to mention the utilities! I would rather have a smaller home and still be able to do things and enjoy myself rather than spending all of my money on a mortgage payment!
We currently live in a small, affordable townhome for our family of 4. We are looking someday to buy a house, but we are saving as much as we can and I know we will find something that’s not too big for us. (I just really want a fenced in backyard!)
We are actually right in this boat ourselves. My hubby’s job transferred him 4 hours away onto the East Coast and we are definitely feeling the effects of it to our pocket book. We are dying to buy something but are currently rebuilding our credit. We have considered moving to another, cheaper apartment but for this area that is nearly impossible! Since we have a two year old, most apartments consider her a “third person” so any one bedroom apartments are out because they require two bedrooms for three people or more. Anyway. Great thoughts here!
We live in a condo in a lifestyle neighborhood. It’s perfect for our little family, although I miss having a yard. The numerous surrounding parks make it worth it. It’s a starter home and the only thing we could afford a couple of years ago. I’m glad we bought then. Since housing in our area has increased 30+%.