Buying a Property

How to Live in Your Dream Neighbourhood If You Can't Afford the Real Estate

19 July 2017 by Chad Diaz

The median house price in Sydney recently topped a million, and the prices in other markets aren't far behind. Melbourne, for example, boasts a median house price of $843,674. If you've found your dream neighbourhood, but you can't quite afford the real estate, you may be wondering if there are ways to save a bit of money. Here are some ideas to consider.

1. Scale Down

If you're dealing with an expensive real estate market, you have to compromise somewhere. If you don't want to compromise on location, you need to compromise on size and amenities. Consider trading in your dreams of a single family home for a row house or a flat. Alternatively, consider downsizing from four bedrooms to three. If you really love the neighbourhood, it may be worth it.

2. Look for a Multi-Use Home 

It can also help to invest in a multiple purpose home. If you can get a home in a location that's zoned for both residential and commercial use, you may be able to run a business out of your home. That allows you to capitalise on the people in the area, and hopefully turn the passersby into a bit of extra cash.

In other cases, you may be able to save by buying a house with rental potential. For example, if you purchase a duplex, you can offset some of your mortgage costs by having a renter. Even a granny flat that you can rent to temporary lodgers can help offset costs, especially if the area is popular for travellers.

3. Choose an Old Home

Some research shows that buyers are less interested in older homes. By extension, you can sometimes tap into a lower price if you stay away from new construction. In that same vein, consider a home that needs some work—if you can do the work yourself, that can be an effective way to save.

4. Look at Homes for Sale by Owners

You may want to look for homes that are being sold by the owner. Real estate agents charge commission on the homes they buy and sell, and in most cases, the fee is well worth it. However, if your budget is really tight, you may want to find a local who is willing to forgot the real estate commission and pass the savings onto you.

5. Comparison Shop for Mortgages

Finally, the price of the home isn't the only factor you should take into account. The cost of your mortgage also affects the home's overall cost. Make sure you shop around to get the best interest rates possible.

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