Owning a home is still very important to plenty of people. But with property prices on the rise in all of the best markets, buying that first home can seem impossible. What do you do? You adopt a strategy known as ‘climbing the property ladder’.
Climbing the property ladder is a lot like building a business. You start small and cheap, invest in what you have, and then turn it over and get into something better. It is a strategy that has proved effective for millions of homeowners since the post-war housing boom.
Below are five secrets to getting on the property ladder cheaply. If you are willing to make some sacrifices here and there, that first house is attainable. You can use your first house to get into a second, and then a third. Best of all, you do not have to be independently wealthy to do so.
1. Be Content with a Starter
The first secret is to be content with a starter as your first house. A starter house tends to be small and lacking a lot of modern updates. But as long as it is structurally sound and completely functional, that’s okay. The big benefit of starter homes is that they tend to be at the lower end of the market in terms of price.
A starter home is the first rung on the ladder. So be content with a starter for the first couple of years. You may feel a little cramped, but you’ll be glad that you went with a starter when it’s time to take that next step up.
2. Use a Mortgage Broker
You can finance your starter by going directly to a bank. That is not your best course of action, though. You are better off using an independent mortgage broker with access to deals you will not ever find at the bank.
A good broker can help you find the best mortgage for your situation, to assist you with the paperwork, and intercede for you if you need help dealing with the lender. A broker-provided first-time buyers guide to an affordable mortgage is a big help as well.
3. Be Willing to Work
The key to making the property ladder strategy successful is to improve every house you buy. So step back and take a good look at your starter. How can you improve it without spending a fortune? If your home is like most others, concentrating on the kitchen and bathrooms is ideal. That’s where you will get the most for your money.
A good place to start improvements is by looking at wall treatments. Something as simple as a fresh coat of paint goes a long way toward brightening a house and making it more valuable. But remember, you are looking to eventually resell at a higher price. Fresh paint alone isn’t going to cut it.
Updating appliances are big for resale. So are new worktops. In the bathrooms, consider new fixtures at the very least. If the bathtub or shower needs a little work, take care of that as well.
4. Be Meticulous Outdoors
The first impression anyone will have of your home is what they see from the curb. You could have the most immaculate interior spaces but still, turn buyers away with the jungle outside. By the same token, creating a good impression outside can give prospective buyers a positive impression even if interior spaces still need a little work.
The point here is to be meticulous about the exterior of your starter home. Manicure the grass; trim the bushes; repair any damaged windows, doors, etc. Make your house so stunning from the curb that buyers want to stop by for a look.
5. Avoid Clutter at All Costs
The idea with the starter home is to buy it, live in it for two years or so, and make improvements in preparation for selling the house later on. Do not make the mistake of filling the house with clutter during your time there. In fact, avoid clutter at all costs. A cluttered home is a home that is not going to sell very easily. And if it does sell, you will not get the maximum price for it.
Clutter is something that accumulates over time. So if you don’t make a point of avoiding clutter from day one, you could get to the end of your two-year turnover plan and discover you have an entire house that needs to be cleaned out. That probably means you’ll also have work to do once the cleaning is complete. You can avoid this entire scenario by just avoiding clutter from the start.
This is how to get on the property ladder cheaply. Start with an inexpensive starter house and go from there. By starting cheap and investing in your purchase, you are building your wealth with every new home you buy. By the time you reach your forever home, you should be in a good financial position. You will end up with a property that you can sell or pass on when it’s time for retirement and downsizing.