How To Approach Buying A Home In Texas: A Mindset Guide For Creative Types
In this guide, real estate investors and creative home-buying specialists, Kristina Modares and Steph Douglass (co-founders of Open House Austin and supporters of Future Front!), take you through a journaling guide and mindset activity to consider some actionable steps that you can take toward homeownership—even within a creative career.
ABOUT OPEN HOUSE AUSTIN:
“Co-Founders Kristina and Steph here! We believe homeownership done well inspires community, income and creativity. That’s the driving force behind Open House Austin, our real estate brokerage and education company. We help people break through the barriers of traditional homeownership every day through creative house hacking strategies and one-on-one Realtor support.”
Below, FIND FOUR actionable steps you can take toward buying your first home.
STEP 1 — Identify your mindset.
What is currently holding you back from buying a home: finances, responsibility, time or something else? Feeling anxious about purchasing your first home is entirely normal. What’s not okay is slipping into analysis paralysis—and losing out purely due to fear. The first step forward in your home-buying journey is actually looking backward.
So, grab a pen and some paper or open up your notes app… then, answer the following questions about your history/relationship with real estate:
Growing up, did your family buy a house(s)?
Did your family rent all or part of the time?
Did they complain about the mortgage and costly repairs?
Did your parents live in one house for 30 years?
Imagine having the tools you need to not have the same problems that your family did. Would you still have the same fears or limiting beliefs as you do now?
Once you figure out what you’ve been trying to protect yourself from, you can think more critically. Your home-buying journey doesn’t have to look like your parents or other authority figures’. And it often shouldn’t.
STEP 2 — Consider your financial plans and potential options.
Once you’ve identified your mindset. It’s time to plan your strategy. Determine how much you’d need to save for a down payment and imagine what you may be able to do to offset your rent and moving costs. Once you’ve identified all of your potential costs, you’ll be able to craft a budget and start to set realistic goals toward home ownership. (Not sure where to start? Take Homeschool on YouTube—a completely free resource that’s already helping thousands of people learn about buying a house!)
At Open House Austin, we’re no strangers to budgeting—or getting creative. With our first homes, we each did something we call “house-hacking” to afford the investment costs. “House-hacking” is a real estate strategy where a property is bought to generate rental income while the homeowner resides in the same property. This helps to offset or eliminate mortgage payments, generate passive income and build equity.
Here are some house-hacking examples:
Bedroom For Rent — Fill your spare bedrooms with short- or long-term roommates. A long-term rental can be on a month-to-month basis or for one year. Either way, you have your tenant/roommate sign a lease agreement. This person pays you a set amount of money each month that you’ve agreed upon. A short-term rental through a hosting site, like Airbnb or Vrbo, allows you to rent out your space for a few days up to a month and sometimes longer (you can determine minimum and maximum days in your booking settings). Long-term rentals provide a steady stream of income with someone in your space for an extended period of time. Short-term rentals rates are higher, so you could get a larger return, but you’ll likely have a revolving door of new people coming and going.
Sneaky Duplex — Add an additional unit to your single family home. You can do this by converting a wing of your house, or even your garage, into a livable space.In any scenario, you will definitely need a bathroom added or available. For short-term rentals, you often don’t need a kitchen (maybe just a mini fridge). We’ve both used this house hacking strategy. Check out Kristina’s current space.
Accessory Dwelling Unit (ADU) / Tiny Home — An ADU is a smaller, independent residential dwelling unit located on the same lot as a detached single-family home. This is also known as a tiny home. You can choose to rent these out as long- or short- term rentals, regardless, you don’t have to share your physical home with other people which can be a huge perk. Many of our clients have turned sheds into tiny homes or used other existing structures to cut down on costs! Check out Steph’s DIY tiny house experience.
STEP 3 — Find a house you can add value to—now or eventually.
Once you’ve determined your budget and reached some of your financial goals, it’s time to find a house! To do so, and this is crucial, you’ll need an experienced agent by your side. We recommend finding a realtor that does more than just show you homes—they should be your biggest source of information and your advocate throughout the home-buying process. It will be up to you both to find a home that can gain a lot of value over—whether that’s due to an up-and-coming location or through updates/renovations you can do later.
As for your house search, think strategically about the future. Will the location attract renters if you need to house-hack? Are the homes in the area continuing to appreciate each year? Does the home need extensive repairs or can you take on small updates over time? Does the home meet your needs for daily life or offset costs for your creative practice? How long do you plan to live in the home? Are you buying a house you’d want to fix-up and sell later as an investment?
STEP 4 — Repeat as necessary!
After you purchase and settle into your first home, your options for creative home-buying don’t have to stop. Did you know that you can buy another house to live in with low money down within a year of buying your first house? You can also use your first home as leverage and take out a line of credit or do a cash out refinance to get funds for the next purchase. You could even pull in a friend or family member and invest in property together (check out our Buying A House With A Friend Mini-Course for more info on this!)
