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Owning your own home doesn’t have to remain a dream forever, but it may require you to make some not-so- easy sacrifices.
You need to do quite a bit of groundwork and make the commitment to start from somewhere. And you don’t have to be close to affording your own home to begin planning for it. Here are seven ways to turn your dream into a reality.
1. Identify the area you want to live in
The first thing you need to work on is area identification. Where have you always envisioned living? Picking out a location is important because you can begin to consider factors like community, lifestyle, nearby amenities and recreational facilities, proximity to your place of work, neighbouring educational facilities and the transport network.
Once you have looked at these factors and picked out an area, you then have to look at property prices in that area and price escalations on an annual basis. This way, you’ll get an estimate of what the prices will be by the time you’re ready to buy or build. With this information in check, you can plan the financial aspect of your home ownership from a more realistic standpoint. You can get such information from reports released by real estate research firms.
2. Get an estimate of the cost of your home
Once you have a location down, and know if you’re building or buying your home, bring out the calculator and begin crunching the numbers to get a reasonable estimate of what the house will cost you.
This will give you a tangible goal as you save, invest and explore financing options. If you are planning to buy your home, look at residential property prices in your location of choice and explore restructuring costs in case you might want to change a few things here and there.
If you are planning to build your home, then you need to look at land prices in your chosen area, consider additional costs, such as due diligence and land valuation, look into contractor fees and costs of building material, consult various developers and have in mind construction timelines and how you plan on mitigating against any risks.
For both options, start comparing prices of interior design and furniture, among other things, and consider hidden costs, such as stamp duty, legal conveyancing fees, land rent and land rates.
Once you get the final figure, have this as your financial goal and keep it in mind whenever you are making savings and investment decisions.
3. Begin talking to financiers for financing options
Another factor that plays into financial planning for your dream home is knowing your home financing options. It’s important to look into all the financing options you have and decide on one that works best for you.
Depending on your payment plan and how flexible your ability to pay is, you can then decide on a financing option. Nowadays, developers try to make it as easy as possible for their clients to own a piece of real estate and hence, besides mortgages, there are other staggered payment plans, such as instalment plans and zero- deposit options that are often negotiable. You can then look at your investments and try to match interest payments to instalment payments.
4. Start saving now
I’m sure you saw this one coming, but before you roll your eyes, think about it – all these people telling you to save can’t all be wrong, right?
While cultivating a savings culture is exactly what every financial advisor will recommend, I find that it’s much easier to retain this culture when you are saving towards a specific goal. What better goal than your dream house? So if you haven’t yet, walk own to your local banker and open a savings account, specifically for your dream house. It’s never too early to start saving for this, and the good thing with starting early is that you can begin with smaller amounts every month and build on this as you move up in your career.
5. Invest to get more value from your savings
While it’s great to save and keep this amount somewhere in a savings account, most accounts earn you the least annual return you could get on your money. Consider making your money work for you. There are several investment options that will ensure your savings don’t just lie around in some account, but instead earn you an interest at a much better rate. Reach out to a fund manager with a great track record today, and begin discussing investment opportunities that would best suit you. Once you have understood the pros and cons of these options, pick one.
6. Spend time in planning and research
The beauty about starting to plan for your dream home early is that you have lots of time to spend on planning and research. Before you open a savings account, compare all the possible account options available to you and pick the one with the most favourable terms and rates. Before investing your money, explore all the different investment options out there and even carry out a top-level background and track-record check on your fund manager and ensure that your money is in safe hands. Before you pick a real estate partner, do some work on the company itself and decide on whether they can be trusted to deliver a quality home. Before you approach a financier, consider all your options to get the best possible deal in the market. Once you do your research, give your dream timelines that will keep you in check.
7. Visualise
Lastly, the more you can see your dream, the harder you will work to pursue it. Keep a clip le with all this information in it. Also, collect images of your dream home exterior, your dream kitchen, your dream bathroom and all corners of that perfect house, and keep these cut-outs in your clip le. That way, you will be able to visualise your dream every time you flip through the le, and this will only make you want it more.
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