Tired of Renting? Do These 3 Things to Get Closer to Homeownership

There are many financial benefits you get to reap once you buy a home. Not only do you get to build equity in a home, but you can deduct the interest you pay on your mortgage on your taxes. There really isn't a comparable deduction for those who rent. 

Meanwhile, a late 2022 survey by Worth Insurance found that 36% of American households rent a home rather than own one. But 72% of renters say they want to own a home. If you're in a similar boat, these key moves might get you closer to that point.

1. Research prices in your target neighborhood

You can't easily save up for a down payment on a home if you have no idea what housing prices look like in the neighborhood you want to live in. Figure out where you'd like to buy, and from there, research prices to get a sense of what homes are selling for. Once you've done that, you can decide how much of a down payment you're looking to make on a home and map out a plan to boost your cash reserves.

2. Cut your spending and boost your earnings to scrounge up that down payment

Coming up with a down payment on a home isn't something most people can do in a matter of weeks. But once you know what that number looks like, you can make changes to your budget that allow you to free up more cash. 

You might, for example, decide to seriously cut back on leisure and entertainment so you can get closer to your down payment. Or, you might give up a car temporarily, or sell a more expensive one and replace it with a cheaper one.

Another option to look at for saving up a down payment is to get a side job. Since the money you earn from it won't be earmarked for regular bills, you'll have the option to apply most of it to your down payment-related savings (the reason it's "most" and not "all" is that you may need to allocate some of that money for taxes, depending on how you're paid).

3. Re-sign your lease strategically so you have flexibility

You may end up having to re-sign the lease on your rental before you're ready to become a homeowner. That's where you'll want to get strategic. You don't want to commit to a 12-month lease if you think you'll be ready to buy a home in four or five months. 

Your landlord may be amenable to a month-to-month lease, where you're allowed to leave at any time as long as you give 30 days' notice. Or, your landlord might agree to a custom lease term, like a four-month lease, even if most tenants sign a lease for 12 months at a time. 

Have that conversation and negotiate, especially if you're a tenant in good standing who always pays on time. Your landlord may be motivated to keep you as long as they can.

You may be eager to stop renting a home and buy a place of your own. Make these moves to make that transition all the more possible.