If you’re brand new to owning a home, and looking to get your first leg on the property ladder, something that you might not have considered but could be a very realistic way to achieve your dream of getting that first home under your belt is to purchase a micro property sometimes referred to as a ‘granny flat’. This might not sound like your dream home, but it makes for a fantastic financial investment.
Indeed, it might sound counter-intuitive; as one would imagine your dream home does not include the words ‘granny’ or ‘flat’ – but whilst there may not be much kudos to be found in buying such a small property, it is a means to an end, and there are many beautiful granny flats that provide everything a larger property does, for a fraction of the price. In fact, these micro properties can make a great starter home, particularly if there’s just one of your right now.
In today’s economy, if you’re just starting out, it can be tough, as more and more people in their twenties and even thirties are finding themselves living with their parents for prolonged period of time, or in a vicious cycle of having to rent rather than buy – these micro properties are therefore an ideal first step to get you up on that all important property ladder.
Then, consider the financial sense of purchasing a smaller property; particularly when compared to renting, which many people view as being ‘dead money’, in that it doesn’t get you any further in life because you are not investing in an asset that you can later sell; instead, the money goes straight to the landlord and leaves you, financially speaking, at a standstill.
The financial benefits are not limited to you being a homeowner rather than a renter, think about one of the largest demographic groups at the moment, the baby boomers. The “baby boomers” are fast approaching retirement age, and with this, comes the financial and practical need to downsize their home for a smaller property; hence the term “granny flat”.
What this means for you is that you will have an abundance of willing buyers eager to purchase a smaller property. Think of it in terms of purchasing a car that you know you will later sell on; whilst it might be nice to have a sport convertible or a mammoth truck it would be much easier to sell an economical family car.
Here are 3 cost benefits of purchasing a smaller property:
SAVE MONEY ON BILLS
The less space you have to heat the lower your utility bills will be in addition to the tax you need to pay the local council.
It’s an obvious point, but when purchasing your first house something to consider is the additional expense of furniture and how much furniture will be required to turn your new house into a home.
AN ABUNDANT MARKET
If you’re purchasing a small property to get your foot on the property ladder it’s imperative to consider the resale value of your home and whether the market demand will appreciate or depreciate within the next few years. Small, one floor, properties are becoming increasingly in demand with baby boomers who are starting to migrate to smaller self-contained accommodation rather than large family homes.
In summary, a small property might not be your ‘dream home’ but it’s a very realistic and affordable way to break free from the shackles of renting and get your first step on the property ladder.