How Can You Transition From Renting to Owning a Home?

By Danae Aballi

Danae Aballi is a long-time real estate industry veteran. She has worked in various positions in the industry having grown from an independent real estate agent to running a team of 5 top producing agents.

Are you paying high rent and thinking about buying a home instead? It’s a good idea, but it can feel overwhelming. Going from renting to homeownership can mean a monthly budget of around $6,000. I have three strategies to consider as you move from renting to buying a home.

Strategy 1: Consider downsizing and relocating. Most buyers don’t like to hear this, but if you’re set on meeting your wants, such as having four bedrooms, a three-car garage, and just ten minutes from work, you need to adjust your expectations slightly. I’ve had clients tell me about their “must-haves,” and while they are great, they can make entering the market tough.

Consider buying a smaller house or something farther from your ideal location. Maybe you can manage with just one bathroom or have the kids share a bedroom. It’s a temporary situation; consider it a stepping stone into homeownership. Once in the game of homeownership, you can leverage your investment to move to your dream home later.

Strategy 2: Buy a property with expansion potential. Why? You might want to put an ADU (Accessory Dwelling Unit), which is basically a little guesthouse in your backyard. This can help offset your mortgage payment.

Let’s say you’re going from $3,000 to $6,000 monthly, but you can put the guesthouse in the back and have it rented out for about $1,500 a month, which would help offset your mortgage. A common comment from clients is, “I don’t want to share my yard.” This is only a temporary solution. Focus on building your real estate wealth to buy the home you want.

Strategy 3: Invest out-of-state where numbers make sense. Real estate has a saying: “Invest where the numbers make sense and live where you want to live.” If you want to stay in Orange County but can’t make the numbers work, consider buying out of state.

You could find a great deal on a home for around $350,000 out of state, wait until it appreciates to $550,000, and then take that $200,000 gain to reinvest in the Orange County real estate market when the timing is right. It’s a solid strategy to enter the market without being stuck as a tenant.

Even with high mortgage rates, homeownership is still possible. It’s challenging, but real estate is a long game, and the effort you put in now will pay off. If you’re flexible, you can build wealth through homeownership.

If you need guidance on what to do, let’s strategize. Contact me at (949) 216-8565 or danae@danaeaballi.com. I’m always here to help.