Preparation for Long-Term Housing
Budgeting
Creating a functional budget is essential in stabilizing housing. Before creating a budget for a new home, you have to create one based off of current spending habits. This can then be amended and adjusted to cut out unnecessary expenses to make room for essential costs associated with your new cost of living. Here are some low cost Budgeting tools:
Best App for Beginners: Goodbudget
Best FREE Budget Option: Google Sheets; Search budget templates, and fill in your information.
Domestic Needs and Deposits
The main expense looming over every applicants head while considering housing is often the cost of rent. While this is very important to managing your finances and considering affordability, it is not the only initial cost of the move-in process. Some housing options require security deposits, first/last month's rent, potential pet deposits, utility deposits, and/or other unannounced required costs. Also to consider is how many domestic needs do you have? Do you have enough furniture for you to live comfortably? Do you have dinnerware or flatware? Cleaning supplies? Toilet Paper? All of these expenses add up quickly, but shouldn't be avoided. Be sure you do your best to predict these costs in the "Budget" process.
Long-Term Investment
Having a place to live is imperative to social functioning and success. Short-Term housing options, such as rental properties and apartments, are low-risk financial decisions intended for people still transient in their Housing Rehabilitation Process, or for individuals intending to travel from an area in the near future. Long-Term Housing, though, should be seen as an investment. The issue is: who benefits from that investment? Renting a property with a 30 year fixed mortgage out to a tenant who pays 115%-150% the monthly mortgage balance is a business decision designed to yield the PROPERTY OWNER significant financial gains. Once the mortgage is paid off, there's nothing stopping the owner from selling the property, and gaining the entire value in equity. The tenant who may have lived on the property for 15 years has no entitlement to that equity. Given the potential for this outcome, utilize the period of Short-Term housing to build credit and purchase you own property, making you the benefactor for all of your money invested.