You’ve achieved your first home purchase, and were smart in selecting a home that meets your needs, and have mortgage terms that you don’t have to worry about being able to afford (see “The Two Sides of Homeownership” for more information). After the “new home smell” has worn off, keep in mind that it’s all yours--since you’re the landlord now, it’s up to you to manage and maintain your home.

As a homeowner, you hold a property that may grow in value, and can become a wealth-holding vehicle that you can access for other investments, or for major expenses that you may incur over your lifetime (see “Benefits of Homeownership” to understand the advantages of equity). With that in mind, there are short-term and long-term home management strategies to take into consideration.

Managing your Property Today

While you are living in your home and increasing equity through mortgage payoff, there are structural and financial options to gain value and reduce costs. Provided they have additional funds, many homeowners move quickly into remodeling mode, tailoring their surroundings around their individual tastes. Depending on the upgrades or changes made during a remodel, you may increase the appraised value of your home by simply adding new flooring or outside amenities. Although not completely necessary, it may be rewarding to your sense of style and to your pocketbook should you decide to sell or use some of your home’s equity for other investments.

In terms of ensuring affordability, the Credit Union National Association suggests taking a roommate. This may be a viable option of you’re a single homeowner, have additional or back units to your property, and are willing to take your new-found “landlord” role to the next level, and manage tenants on your property. Though it may lower your out-of-pocket expenses as a homeowner, having a roommate or tenant adds greater property management responsibilities, and it is important that you understand the legal and financial liabilities involved. At minimum, you should maintain a structured lease with whomever may be paying your rent to live in your home.

To add credit-strengthening payment history, you may be able to automate your monthly payments to your lender, as well as to insurance carriers and county tax boards. Not only will automated payments save time, the on-time mortgage payments will boost your credit score (see “Understanding Credit”), and prevent any potential foreclosure activity.

If the home you have owned for some time has built equity, you may be considering what your other options you have other than just staying put. Please see “Once You’re In: Long-term Homeownership Considerations” to explore resale or investment property choices.

References

Credit Union National Association. News Now
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