First-time home buyers frequently discover that their monthly housing costs are much, much higher than they anticipated. So naturally they begin looking for ways to save on those housing costs.
Updating, furnishing, maintenance and utilities all add up quickly. Add to these expenses the monthly mortgage, and even at today’s low interest rates these payments can put a strain on almost any budget.
Here are a few ways to save on housing costs.
Save On Housing Costs With Rent-To-Own
One of the more overlooked ways to save on monthly housing costs is to enter into a rent-to-own or lease purchase agreement with the seller.
This type of contract allows the buyer to become a tenant first.
First, agree to the purchase price of the house in advance. The next step is determining how much of the monthly payment is going to be applied to the purchase of the house. The amount of the payment left over goes to the seller as monthly rental income.
There’s a right way and a wrong way to use a rent-to-own agreement to save on housing costs.
The agreement should be treated like a purchase contract, with an independent third-party such as an escrow company handling payment receipts and funding disbursements.
Sub-Renting Can Save On Housing Costs
Renting out extra space in the house is another way to keep housing costs down.
There are both pros and cons to renting to people you know and finding good tenants that you don’t know.
But either way, home owners who rent out extra space frequently find that the extra income they receive is much more than they expected.
The additional money from sub-renting or hosting on Airbnb can add up fast, and be used for needed updating or remodeling.
Or even to pay off the mortgage balance much quicker than planned!