There’s no way around it—housing expenses are just a part of life. Whether you rent or own, you’re probably paying something towards housing each month, and yes, it’s probably a large portion of your budget and your take home pay.
Whether to rent or buy can be a big decision. Consider your current debt situation, if you built up an emergency fund for home repairs and upkeep, and your current life circumstances. Never feel like you should buy just because you’re “at that age” or because the market is really great. Instead, ponder the stability of your family’s income and look to buy a home at or even below the line of what you can afford.
Check out these great ways to save on housing (whether you rent or buy)!
1. Keep Up on Local Tax Breaks and Laws
Many states (including Florida, Wisconsin, Georgia, Michigan and Maryland) offer “homestead tax” breaks or exemptions for renters and/or homeowners facing increased housing costs and lower incomes. Many states offer big time tax credits if you bought your home during that tax year.
If you’ve changed residences or you’re planning to purchase a home—or if you’ve been filing your own taxes for a while—consider hiring a professional accountant or consulting a financial advisor this year. While paying someone to do your taxes can seem like an added expense, an experienced tax professional will be up on the latest laws and credits available, so you can really save money in the long run. (Tip: A reputable, local independent tax professional may cost a little more than the big-name franchise tax preparation outlets, but trust me, you’ll benefit much more from their advanced level of expertise.)
2. Learn Basic Repairs
One of the nice things about renting is that you’re typically not responsible for the care and upkeep of the property. However, even renters should familiarize themselves with basic plumbing repairs (like how to plunge a toilet, fix a leaky tap, or turn off the water in case of an emergency). It may seem like a no-brainer, but many a college student or young renter has faced a flooded apartment because they didn’t know how to perform very basic repairs, and in the meantime, couldn’t get in touch with their landlord. Understanding how to caulk, patch pinholes in a wall, and perform minor touchups can also help you get your full security deposit back when you’re ready to move out.
For homeowners, DIY becomes a whole ‘nother ball of wax. Take a trip to your local Home Depot or Lowe’s on a Saturday and you’ll be amazed at the number of weekend warriors who undertake home repairs and updates. There’s so much you can do yourself with basic training and tools.
A word to the wise—only take on projects that you really understand. I’ve seen some SCARY DIY household projects! DIY mistakes can lower the value of your home, plus they’re often much more costly to fix in the long run (plastering over a drop ceiling, for example). Before you take the sledgehammer to the wall, first take time to take a class, read up on the repair, and be honest with yourself when and if you get in over your head.
Major plumbing, AC and ductwork, renovations and electricity should probably be left to the professionals. If you’re ready to take your DIY skills to the next level, start small. (For example, before you rewire your house, try rewiring that thrift-store lamp and see how you do.)
3. Renters: Learn New Skills and Save
If you’re renting and you’re experienced in home maintenance and upkeep, see if you can work out some discounts with your landlord. Perhaps your hubby or teenager doesn’t mind snow removal or cleaning gutters and mowing the lawn. Maybe you love painting and don’t want to wait for someone else to put on a fresh coat for you.
Many landlords are happy when their renters want to maintain and even update the property (within reason), so they’ll often provide a small discount on your rent for your services. If you have an itch to garden or landscape, see if your landlord will let you deduct the purchase of plants from your monthly rent. You may be surprised how many landlords know the value of a helpful renter and are happy to support your endeavors.
4. Use a Realtor
If you’re ready to buy or sell your home, it can be tempting to serve as your own agent. However, a professional real estate agent and/or buying agent can save you time, negotiate the best price and help to ensure you get through the process without pulling out too many hairs.
Typically the seller should pay for a buyer’s agent’s commission. So if you’re a first-time home buyer, a buyers’ agent won’t cost you anything extra. You may hear that being your own buyers’ agent (or hiring a non-exclusive buyers’ agent acting as the agent for both parties) will result in trickle-down savings for you, so you’ll get a better price. Oftentimes, this is not the case! Having your own exclusive buyers’ agent helps ensure you have someone in your corner during the purchase.
5. Look at Foreclosures
There’s a lot of buzz about foreclosures and ways you can save by purchasing a home in foreclosure. First, be sure you’ve researched the process thoroughly because foreclosures can have some legal red tape that other homes do not. Some states allow homeowners to reclaim or buy-back the property, so it’s imperative you protect yourself and your family from headaches down the road.
Homes in foreclosure can typically go for 80% of the actual value, so they’re definitely a good deal. BUT, don’t believe anything that seems too good to be true (unfortunately, it probably is) and be sure you’re in a position to buy and comfortable with the expenses and process before you jump in.
6. Keep Up on your Credit Score
Before you buy or even if you’re moving to a new rental property, keeping up on your credit score can ensure you get the best deal, located in a safe neighborhood complete with a thorough and attentive landlord. Many landlords will examine your credit and ask for references and proof of credit scores, so even if you aren’t in the market to purchase, don’t think that ignoring a bad credit score or ugly debt will make it go away.
If you bank through a credit union, many offer one free credit report pull each year. They’ll even review it with you and suggest ways to improve. Each of the three agencies—TransUnion, Experian and Equifax will also allow you to review your report one time per year for free. Go to https://www.annualcreditreport.com to get your free annual credit report from the only free credit report authorized by federal law. (There are thousands of “free credit score” offers online, but don’t be fooled!)
Credit scores can do strange things when ignored. You may find a black mark on your report that you knew nothing about, or you may find you’ve experienced identity theft or perhaps forgotten past debts that now come back to haunt you. Looking at your credit report, then making a few calls to creditors to update their records can help ensure you have the healthiest score possible, which will help you immensely whether you buy OR rent.
7. Don’t Forget about Property Taxes
If you’re looking to buy, always consider property tax in your decision. You may be looking in a lovely neighborhood with astronomical taxes, when there’s another lovely neighborhood a few miles out that can save you a bundle.
If you already own, you receive your property tax assessment each year. Always, always, review your yearly assessment. Check the math on your property tax card for errors and note any mentions of items that no longer apply to your home, such as torn down fences or patios. Also be sure to compare your taxes to your neighbor’s. Don’t worry, there’s no need for forcing an awkward conversation—their property tax is public information and can be found on Zillow.
If you suspect you’re getting the short-end of the stick on property taxes, and you’re paying more than your neighbors with similar property values, consider an appeal to your tax assessor’s office. Be sure to make note of any value-lowering characteristics that aren’t easily noticeable (like hail damage or foundation issues).
Why do all of this? The savings you can get on your property taxes should help to make the necessary repairs!
8. Get a Reputable Inspection
When you’re buying, skimping on a home inspection with a $500+ price tag can seem like a viable way to save money. However, a reputable home inspection can help keep you safe from issues like radon and carbon monoxide leaks, plus, your inspection will reveal any need for future repairs, giving you an out and/or a powerful negotiating tool when you make your offer.
Decide beforehand what your “deal breaker” items are—foundational repairs, roof issues, insulation problems, heating and ductwork, as well as wiring can be huge and costly issues down the road. This is especially important if you’re buying a foreclosure. Any issues that arise in the first year can be appealed through your realtor, but it can be a pretty arduous process. You’re better off able to communicate the required repairs to the current owner, who may even have them taken care of before you buy.
Even if you’re renting, a thorough inspection before you move in can help you detect any issues down the road. Ask questions and test everything. Find out about previous renters if you can, and don’t be afraid to point out things like mildew around the windows, pet smells, questionable carpeting, repairs and other issues. You can negotiate the price of your rent, and at the very least, ensure your landlord will take care of the issues BEFORE you sign a lease. (Plus, you don’t want to get stuck paying for a previous tenant’s damages when you’re ready to move out!)
9. Get Excellent Insurance
Homeowners and renters insurance policies are worth their weight in gold. Most homeowners must have insurance throughout the life of their mortgage—and for good reason. When you need insurance, you really NEED insurance.
Be sure your premiums are set at a reasonable rate. Consider raising your deductible to save on your monthly premiums, but do the math first. Be sure you have enough tucked away to offset the deductible, and that you’re saving by lowering your premiums. Check out my post: 12 Smart Ways to Save on Home Insurance.
Renters insurance is often overlooked or forgone, but consider the value of your family’s possessions. If you were faced with a flood, smoke damage or another issue and you had to replace everything, from electronics to beds to furniture to appliances and more, could you really do it without insurance? It’s not worth the risk, and even in uncertain times, you really can’t afford to skip insurance.
Most insurance providers offer online renters insurance calculators, so it’s easy to shop around. Most plans are super affordable, costing from around $12 to $25 per month.
10. Take Care of Your Home, Be Happy and Live Simply
Living simply is really the key to being happier with less. You might not have the biggest house in town or even on your block, but if you take time for property upkeep and keep your house clean and tidy, you’ll be surprised at how it will hold value. Repurposing items and decorating with things you already have, and arranging your space so it’s more livable and functional can help you make the most of what you’ve got.
There are many small things you can do as a renter or homeowner to save money and maintain a healthy, happy and valuable home. Keeping up on your flooring and cleaning carpeting, for example, can extend the life of your floor coverings and thus keep up the value of your home long term.
When you get a redecorating bug, DIY home décor is so much fun! Change paint colors or touch up trim, rearrange your furniture or try an inexpensive change rather than a total renovation. Keeping things clean and simple can help your family turn any house into a home—and put a little savings back in your pocket!
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