More single women becoming home buyers in 2021
Single women have become one of the fastest-growing segments of the 2021 homebuying market. In fact, the goal of "wealth-building" may be the reason.
The condominium form of real estate ownership is particularly suited to a single female buyer for a variety of reasons. Among those tend to be enforced maintenance, and better location at a lower price for the area you want.
Here are six tips for single women as they approach the task of buying their first home:
1. Safety Is Job One!
It’s not just location, it’s also about safety. You may initially like a unit located on the first floor with a patio so that you can let your dog out and have your own private entrance. But a burglar or worse can easily focus on ground floor windows. Higher floors are simply smarter from a safety standpoint.
That being said, location is important too. Is the neighborhood safe? Can you feel safe walking your dog late at night? How about walking to your car by yourself late at night? These can be real concerns when it’s midnight on a Saturday night and you’re scared to dispose of trash in the dumpster.
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2. Think About Your Five-Year Plan
You really can’t know what the next five years might bring your way. And that is especially the case if you are in your 20’s or 30’s. Massive transformations often occur in just five years. Today, you may be happily single. Five years later, you may be married and have a baby on the way. Change is a constant in our lives.
Many new condo developments have preferred long-term financing available as an inducement to buy. And that loan can be an asset should you decide to move in a few years. A loan with a term of 30 years won’t tie you down.
And the lower monthly payments will make renting more lucrative should you decide to rent as opposed to selling in the future.
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3. Maintain a Cash Cushion
Remember, you are the one responsible for paying the principal and interest, the association fee, the assessments, the property taxes, owner’s insurance, and utilities. Avoid any situation where you might become cash strapped.
The freedom from worry about your housing expense is very liberating. And knowing that you can pay off your mortgage if you wanted to is even more exhilarating. Rather than selecting a 15-year term, FOX 5 real estate expert John Adams recommends a 30-year term with the payment difference added to your savings every month.
After 15 years, there will likely have enough in your savings to "pay off" your remaining balance, but that’s a good time to reevaluate your financial position. It also gives you a nice cash cushion should you need it.
(Photo by David Paul Morris/Getty Images)
4. Flexibility of Association Rules
Tying into your five-year plan, you should ask whether the condo allows rentals and under what circumstances. Sometimes condos are very strict and don’t allow rentals at all or they only allow rentals up to a certain percentage of units in the complex.
This is important because if you end up moving out and don’t want to (or can’t) sell, at least you will be able to rent it. A unit that has few or even no restrictions on rentals is also valuable and desired when you are thinking of selling.
In addition to rentals, is the association strict with pets and children? Some condos allow no pets - some are adult only. The more flexibility the condo bylaws are, the more flexible your future might be.
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5. Plan for the Worst, Hope for the Best
I recommend having at least six months of full loan payments in savings as a minimum.
What is the worst-case scenario? If you are carrying the full housing expense by yourself, and your assets do not outweigh your liabilities (e.g. you aren’t able to pay off your mortgage with your investments or cash savings), then you would want to have contingency plans.
If you lost your income, how long could you avoid foreclosure? Is there space to bring on a roommate to help pay the bills? Are your savings adequate, and if not, how can you bolster them this year?
6. The Noise Factor
Finally, there’s a difference between new construction and renovated older buildings. Ask prospective neighbors how the walls have been insulated for noise reduction, if at all. Ask if there is a "firewall" between units, and if so, how many hours is it rated for? The higher the number, the less the noise transmission.
New construction tends to give more thought to noise reduction, but that is not always the case. Nobody wants to hear their next door neighbor sneeze in the middle of the night.
Single females are a fast-growing segment of the home buying community. And owning a home remains one of the best investments in America today. This particular category of buyers is well advised to shop and compare for the specific features and benefits they hope to enjoy.