Saving money with real estate
After six months of soul-sucking, wallet-draining commuting, we decided to move! We are not the type of people to take a decision like this lightly. We took many things into consideration, but our overall goals were to find a property with historic charm, a safe location, and most importantly, low monthly expenses!
Renting vs Buying
On the surface renting looked like the best option. It is what so many of our friends do and there was so many options to chose from! We initially thought it would be a lot more affordable, but turned out to be not true.
We did extensive research on the Omaha real estate market and found that is WAY cheaper to own then it is to rent. Of course this varies with the neighborhood and the property type, but in our criteria, rent was typically 50% more than a mortgage payment! It didn’t take much convincing to start the home buying process. When it comes down to it, we would rather see our money go to the principal on a loan then into a landlord’s pocket.
I love house hunting, I am not going to lie. I have spent many many weekends indulging in hours of House Hunter on HGTV (at my parents… we don’t have cable). We met our realtor when she showed us a property that we had requested information on. We ended up working really well together and she never pressured us into spending more than we were comfortable. (In fact, she really admired our dedication to a low-cost property — she even attempted to purchase a property we looked at together.)
We looked at a combination of condos and houses. Now the affordable condo market in Omaha isn’t exactly flush. The market is overwhelmingly dominated with single-family homes. We looked into them, but Pierre, 24, and me, 22, weren’t ready for the responsibilities that come with owning a single family home. So the BEST alternative was a condo.
We, well Pierre, was pre-approved for a $125,000 loan! That totally shocked me. At the time he was only making 30K/year. We knew right away that we weren’t going to spend that much. The condo we ended up going with was CHEAP. Guys, it was only $26,500 (with the seller bringing $1,000 to closing). With a 15 year loan, our mortgage is only $241 a month! It also fit the other criteria too — an historic apartment built in 1927, with original hardwood floors and plaster, and it’s located in an up and coming neighborhood in midtown Omaha.
It isn’t exactly the most comfortable situation, being that it is only 500 sq feet. I see it as a way for us to save buckets of money, and saving money with real estate is our favorite way to save! What it comes down to is, living below your means is the quickest way to become rich!