Last month, we looked at ways tenants could save money and combat rising rent prices. But if you’re one of the millions of Americans that owns a home, saving money on rent may feel like an irrelevant skill. Fortunately, there are plenty of ways for you to save on homeownership.
Saving During the Buy
Right House, Right Neighborhood – Any realtor will tell you that location plays a huge role in determining home value. However, a good location can have costs beyond the home price. Property taxes can vary wildly between suburbs. Saving hundreds or thousands a year could be as easy as looking just a few blocks from your target neighborhood.
Keep an Eye out for Easy Fixes – An overgrown yard, dirty basement or tacky wall colors can drive down the cost of a house even though yardwork, cleaning and restyling were things you were likely to do anyway. If you’re willing to do a bit of work, you can get a good house below its asking price while picky buyers are looking elsewhere.
Check Your Taxes – Buying a new home can come with new tax opportunities—especially if it’s your first home or you plan to make major improvements. When tax season comes around, be sure you’re getting your maximum benefits, even if it means seeking professional tax advice.
Saving While Owning
Get it Green – If you haven’t considered energy efficient appliances, improved windows or better insulation, you need to review your utilities budget and find out how much you could save each year. If saving energy isn’t enough, you could make your own by buying or leasing solar panels. Green homes save money and have higher property values.
Refinancing – An obvious option to most homeowners, refinancing a mortgage provides a way to save on interest or restructure repayments. Refinancing isn’t always a good option, though; a refinanced mortgage needs to provide savings large enough to offset the costs it incurs.
Early Repayment – In most cases, mortgages allow you to repay the principal early without penalty. If you have extra money from a bonus or tax refund, consider putting it towards paying off your mortgage. For a mortgage charging 4.5 percent interest, every $1,000 paid early will save you $550 in interest over the next 10 years.
Light Right – Old incandescent and halogen bulbs use up lots of energy, most of which becomes heat. Using energy efficient LED lightbulbs and/or installing skylights (window or tube) will reduce the electricity needed to light a room while also cutting down on your air conditioning costs.
Saving When Selling
Only Stage the Key Rooms – Improvements can greatly improve resale value, but there is no need to spend big on every room. The kitchen, main living room and largest bedroom are the areas that tend to convince people of a home’s value. Focus your upgrades on those spaces; not every room of a house needs to dazzle prospective buyers.
Be Patient – If you are certain of your home’s value, don’t feel pressured by a realtor to offer a discount. Realtors are there to help you, but they also work on a commission system that rewards high turnover. Dropping $10,000 from a list price barely affects their cut and allows them to move on to selling a different house. Be sure that any discounts are justified by market demands.
Get Friends to Help Move – Hiring a moving service can be much faster and more convenient than moving yourself, but it will cost you thousands. For the price of providing lunch, you may be able to convince friends and family to help you load or unload a moving truck you rented yourself.
