A Home That Fits the 30/30/3 Rule
When you’re buying a home for yourself, it can be hard to determine what you can actually afford. Sometimes, the mortgage estimators online are inaccurate, making you feel like you can afford a more expensive house than you can.
During a pandemic, especially, you want to make sure the house you buy gives you plenty of breathing room in the event your financial status changes. You can avoid biting off more than you can chew by remembering the 30/30/3 rule.
In short, it means you should buy a house that:
- Requires no more than 30% of your monthly income to cover the mortgage
- Allows you to have 30% of the home value saved in cash
- Has a total price no more than 3 times your annual income
If you find a property that meets those three qualifications, you can feel more comfortable putting in an offer.
Something in a Smaller Town
Big cities have been hit harder by the Coronavirus than their small-town counterparts. If you have flexibility in where you can live, then consider looking into smaller towns as an alternative to big cities.
In many cases, homes are more affordable in small towns. And, with so many workers transitioning to remote work, you might have the flexibility to work anywhere you want, so you can take advantage of small-town living.
A Property With a Good ROI
Investing in real estate has always been a great way to diversify your income, and that’s still true during this ongoing pandemic. If you’re looking to buy an investment property, finding something with a good expected ROI is key.
One way you can search for a profitable investment property is to research housing markets that are showing a decline in property prices. This allows you to buy low, and it could pay off later.
Oftentimes, markets with a sharp decline later show higher appreciation rates once the market recovers.
Buying the Right Type of Real Estate Makes a Difference
Buying real estate, whether or yourself or as an investment, is always a bit of a risk. And, it’s even riskier in the midst of a global pandemic.
However, knowing the right type of real estate to buy can give you peace of mind that you’re making the right decision for your needs.
For more on the latest real estate news, be sure to read through our other articles before you go.
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