Mid-century under a million

One reason I wanted to start this blog was to chronicle our journey and mishaps (many!) to find a house that is right for us but also to illustrate that millennials can find homes under a million dollars in high-value property locations. When we started house searching, I actually underestimated our budget. At first, I was spending time on Redfin and Zillow and only thinking about the assets I had saved and what I could feasibly put down. Once Ryan and I were pre-approved together, the conversation changed. We began looking at houses that fit both our styles and stumbled on a beautiful midcentury that changed everything. We decided this type of home could justify us spending at the high end of our budget and strategized on how we could make that happen. These are a few tactics we have recently employed during the search:

Location

Initially we were set on the Maryland suburbs of Silver Spring, Kensington and Potomac, within 20-25 minutes of DC. We quickly learned that inventory is extremely low in these areas, its highly competitive and the property taxes can be high depending on location and recent renovations. As we have started looking further north, we realize we can find more land, more privacy, and less competition. Property taxes are about the same though.When we found the first midcentury in Silver Spring, I quickly researched all historic midcentury neighborhoods and found that northern Virginia has more designated midcentury neighborhoods than Maryland. Expanding the location and being more flexible about neighborhoods provides us more options.

Tax Credits

In the past month, I have become closely acquainted with tax credits and tax benefits for homebuyers. There are a few that I recommend looking into as you begin your search. They may even have an impact on affordability. In Maryland historic districts, owners are provided a 20% tax credit for renovations to restore or maintain a homes natural aesthetic and structure, such as window replacements, siding, and roofing. The state and local tax (SALT) deduction allows for people making between $100,000 and $499,000 to deduct up to $10,000 on taxes paid to state and local governments (i.e. property taxes) by itemizing. In 2018, Maryland, DC, and Virginia were the top states benefiting from this tax. Several others to look into are the mortgage interest deduction and energy efficient renovations. The mortgage interest deduction allows homeowners to deduct interest paid on up to $750,000 worth of their loan.

Monthly Saving

Ah, good old classic saving. I have been a fairly good saver over the years, knowing I always wanted to buy a house and pay for my own wedding dress, among other things. I also think it is good sense to have savings in the bank for emergencies. Now that the house search has feverishly begun, I’ve doubled my monthly savings and cut back on some indulgences so I can have even more capital when it’s time to cough up the cash!