I bought my first home when I was 24, and I fell in love with real estate throughout the process.
I saved up $64,000 for a down payment by using the 50/30/20 finance rule. Managing such a massive purchase on my own taught me to think about the value behind experiences and things, as well as how much happiness I expect from the things I spend money on.
By the time my now-husband Michael and I were engaged to be married, I was 33, and realized that spending a lot of money on a wedding probably wasn’t right for me. Though we entertained the idea at first, we were both dealing with family matters and felt strongly about paying for our nuptials on our own. Once we dug into researching costs, we felt even more validated in our decision to forego big wedding day plans to elope and save money. Eloping to our dream vacation spot, Bora Bora, cost about 40-50% less than what we would have spent on a wedding. We wanted to prioritize something else that was deeply important to both of us: our future, and having a home we could share.
Aligning on our wants, needs, and the things we couldn’t live without
When we got married, we were living in a condo I had bought nine years earlier in Los Angeles’ Art District. The condo had skyrocketed in value, teaching me what a smart choice investing in the right real estate can be. At the time, I was a realtor and working at a real-estate startup. Needless to say, Michael and I were both passionate about finding the right space to make our own. We realized it might take time, but we were willing to wait until we found something we really loved.
Though getting practical about a home purchase might not be as glamorous as a rooftop wedding in Los Angeles, sitting down to talk about areas where we were aligned was exciting. We settled on looking for a home with enough room to expand our family, space to entertain, and outdoor yard space. I advise all potential home buyers to do this exercise early in the process to figure out what you want, need, or can’t live without. The results of your conversation will keep you focused, and save you time when you’re looking.
Once we were in agreement about what we were looking for, we started being more intentional about keeping an eye on the local market for new listings. After about a year, we saw a home pop up in an area we really liked. Using the address, I did a drive-by to get a better sense of the neighborhood and the home’s surroundings. I instantly loved the views and all of the greenery, which felt so refreshing. The home represented our sleek and modern tastes. The only thing that wasn’t perfectly in line with our vision was the house’s condition, which would require a lot of work. I knew that my next step would be to find time for us to see the home in person — and to persuade Michael to consider such a major fixer-upper.
Wisely tackling the home tour
I was fortunate to have real estate expertise while we were looking for a home, but many people find the process to be complex or overwhelming. Thankfully, there are a couple of different ways you can go about home shopping. You can choose to work with a realtor in a more traditional way, which involves choosing a home that fits your needs within your price range and booking tours to visit properties in person.
Nowadays, it’s also easier than ever to use technology to strip out excess steps and streamline your list of homes. Companies like Opendoor make it easy to look for homes within an app, schedule a self-tour (or multiple self-tours, if you’d like to go back!), and apply for a mortgage, whether on your own or with a realtor.
No matter what you prefer, I always remind home shoppers how important it is to invest time in visiting the home. It can be tough to picture yourself or your belongings in the space before you ever step inside. It’s also important to visit the home and evaluate its condition. Whether you choose to visit an open house with an agent or schedule a self-tour, here are a few things to think about once you’re inside:
- Space: Is there enough space for you and your family? Think about your furniture and storage needs, like closets, a basement, attic, or garage.
- Longevity: How long will we live in this home? If you are planning to start a family in the near future, there needs to be a layout and space that makes sense for a baby.
- The current condition of the home: Can you live in this home as it is or will you need to do renovations before you move in? If you’ll need to tackle major renovations or repair safety-related items, you may not be able to move in right away. In addition to waiting, you might incur extra costs while paying for two homes (or temporary lodging) at the same time.
In our case, Michael and I were able to instantly verify that nearly everything inside the home we liked would require some renovation. From replacing windows and floors to overhauling the kitchen, we knew that the money we had saved by not having a big wedding would be put to excellent use. We made an offer, wrote a personal note to the seller, and beat out 17 other buyers to close on a home we knew would be a great investment for our future.
Renovating a fixer-upper: What to evaluate, consider, and budget for
Fixer-uppers may be having a cultural moment, but they’re not for everyone. Our fixer-upper home cost 20% less than other homes we saw in our price range, which factored into our decision to buy it. Saving this money on a fixer property left room in our budget to hire an architect and work hands on to design our home. Renting out my condo also helped us finance our new home, and we invested the money we saved by eloping into upgrades.
When thinking about investing in a fixer-upper as we did, the cosmetic overhaul may be obvious. Underlying issues are important to note as well, as they can be extremely expensive to repair. Managing these fixes will cut into your renovation budget, and there likely won’t be an aesthetic benefit you can see. Because of this, knowing exactly what you’re getting into when looking at an older home (or a home that needs some TLC) can help you forecast the money you may need to spend in addition to the price of the home and closing costs. Here are three things I recommend checking for:
- Uneven floors: Sloping or uneven floors can be a sign of foundation issues.
- Low water pressure: Turn on a sink or shower to test for water pressure; very low water pressure can indicate plumbing problems in an older home.
- Termite damage: Wood balconies or decks that have wood-rot or visible termite damage are usually a sign that the house has termites in the walls, too.
Our renovations weren’t a typical room-by-room update; we tore the house down to its studs to create a new layout and surfaces. It may be helpful for to break down your desired renovations into categories with allotted spending for each, such as flooring, by room, or even to account for cosmetic upgrades, although percentages will be different for different homes.
For us, using our savings to renovate our home was exactly the kind of situation we prepared for, and it brought us so much more happiness than a big wedding celebration. Michael and I are both very particular, so being able to customize each area and aspect of our space worked out really well for us.
I still think it’s a smart idea to spend on the things that will bring you true happiness. If you’re a person who has always dreamed about your wedding, it may be worth spending your savings on it. For us, creating a home we love to live in was worth the wait, as well as the the time and money we’ve invested so far.
Originally published on Business Insider.
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