Live In Luxury: Finding Your Dream Home On A Realistic Budget
If you want to know what it’s like to live in a multi-million dollar mansion, I’ve got good news for you! You don’t actually need to be a millionaire to live like one.
The home you live in, for most people, will be the biggest purchase you ever make in your entire life.
Most work for years and years diligently saving until they have enough to get the keys to that dream house they’ve always wanted. But, what if you didn’t need quite as much money as you thought you did to get into that perfect place?
Well, as long as you’re not looking for an 85,000 square foot estate home in the prestigious Bridle Path area of Toronto, Ontario, then I might be able to help you.
This article offers up 3 creative ways that thinking outside the box can help to get you into your dream house.
3 Cost-Effective Ways To Get Into A Bigger, Better House
Build It Yourself
Chances are you don’t have experience building entire houses from scratch. Few people do. But, you might be surprised at what you can accomplish if you learn some basic skills and enlist the help of the right professionals.
It might sound funny, but YouTube is one of the world’s leading educational platforms.
Seriously.
There are loads of resources on the web that can teach you how to plan, organize, and manage a large-scale DIY home construction project.
Here is a list of micro-projects that you might need to oversee during a custom home build:
Demolition
Permits
Plumbing
Electrical
Heating & HVAC
Framing & Drywall
Carpentry
Flooring
Painting
Appliances
Landscaping
Driveway
Deck
Roofing
Of course, the more work you can do on your own, the less you will have to hire out. In other words, the handier you are with construction projects, the more money you will save. However, if you’re just starting out and have little to no experience then you’d be best to partner with some people who do this type of thing for a living.
On average, you can estimate a high-quality (but not super fancy) custom-built home in the Greater Toronto Area will cost approximately $300 to $400 per square foot. That works out to around $875,000 for a custom 2,500 square detached home (at $350/ sq. ft.), well below the average of $1,359,000+ for detahed resale homes.
Editor’s Note: Credit to my friend Michelle from Peachy Vida who reminded me that these estimates don’t include the cost of land or permits. So, best case scenario - This is what you can expect if you’re rebuilding your own house (minus demolition & legal fees).
Many people worry that this sort of task is too much to take on, but it can be worth taking a look at the options you have near you to make sure that you’re not missing anything. Building your own home is one of the best ways to free up money to spend on luxuries.
Relocate To A Lower-Cost Area
Average Sold Prices In Toronto Area February 2021 (Courtesy of wowa.ca)
This is not the first option that everyone jumps to cuz relocating can be tough logistically and emotionally.
It’s hard to live where you don’t know anyone. Its frustrating to get lost in the grocery store. It’s definitely challenging for families to uproot everything they’re attached to in the community and set up shop somewhere completely new.
But, if it works for you and your lifestyle then you could save massive amounts by relocating.
There are different listing websites online to help you search for the best homes in your market. In Canada, popular sites like Zolo even have downloadable smartphone apps to make your search super simple. Or, if you want to get uber targeted, American sites like https://www.camijoneshomes.com/kansas-city-homes-for-sale/ can help you to find beautiful homes in your area without having to spend a fortune in the process.
Moving to a new location can have other perks, too. You may be able to get better employment opportunities or better access to community resources in a different region.
Every town or city has its own pros and cons. But, one thing that’s usually true no matter where you live, moving further from the downtown core usually will usually save you a lot of money on your housing expenses.
Rent Where You Live
Some people look down on renting because they feel like they are throwing their money away. They want to own something! They want equity.
Rightfully so.
You should want equity because ownership is the true source of wealth. Weather you build your equity in real estate, stocks, or by owning a business, the true path to wealth is ownership.
So, I want you to reimagine what it means to rent.
What if you rented out your primary residence to a tenant and then found a luxury home that you could rent for yourself?
Obviously, a lot of factors have to be considered when applying this strategy, but when done correctly it can be a huge game-changer.
Imagine that you live in a modest home with a manageable mortgage for long enough to pay down some debt and accumulate a decent amount of equity. Then, you found that similar houses in the area where you lived were renting for twice as much as your current mortgage payments?
If the total cost of living in your current home was $2,000/month and you could rent it out for $4,000/month, would you move out?
Essentially, you could turn your primary residence into a rental property.
Then, all you have to do is find somewhere to live yourself. Maybe something with the built-in luxuries and upgrades that you always wanted.
There are loads of amazing properties available for short-term or long-term rental all around the world if you know where to look. Places like this usually come with simple tenancy agreements that will make it easy to manage your move-in.
This strategy can give you the flexibility to pic-up and move multiple times per year if you want. More and more people are taking advantage of the untethered connections that are enabling employers to embrace a work-from-home policy. The only difference is - Your home could be anywhere!
If you wanted to stay local you could. If you wanted to move cross country you could.
All the while, you would be reaping the benefits of owning a rental property while enjoying the peace of mind that comes with being a tenant, not having to pay property tax or worry about capital expenditures or major repairs.
Final Thoughts On Living In Luxury
I don’t want you to think you need to live in a mega-mansion to feel like you’ve made it. You don’t.
I wrote this article for those who want to enjoy a certain level of executive comfort while maintaining the prudence of good financial judgement.
These three strategies are not for everyone and that’s okay. If nothing else, take from this article one key lesson.
You can be financially responsible and live a life of luxury.