Ever wonder how ordinary people can afford homes costing over half a million? These people aren’t pulling in a six figure income individually; they’re just regular folks, but they live in the some of the most prime locations such as Mililani Mauka, Downtown Honolulu, or even Hawaii Kai. Just how do they do it?
“Trading in” or “trading up” is the strategy to use. Your initial home (starter home) purchase is in an affordable range and somewhere in between every 3 – 7 years, you sell your old home and purchase another home with increasing value. Now there are many factors that influence when you would “trade up” but basically, the idea is that you capitalize on the equity being built in your home. Equity is built as you make your regular mortgage payments, but equity is also built as the market increases in value.
A “starter home” is your first home purchase. Many times, it’s not your dream home, but it is something you can afford as well as some place you can live in. When is a good time to purchase your starter home? The answer to that question is different for every situation, but a good answer would be “as soon as you can afford to purchase”. Why is that? Because as a renter, chances are you’re paying off someone else’s mortgage. You’re building someone else’s real estate investment equity. Why not start building your own wealth instead of building up someone else’s?
In the Hawaii real estate market we live in today, rarely do first time homebuyers purchase one home to live in for the rest of their lives as their parents did. With the average sold price of single family homes costing over half a million, the equity trade-in plan provides a way for your family to be able to afford the purchase of your dream home perhaps within a couple of trade-ups. So are you wondering if the equity trade-in plan is for you? Again, there are many factors that influence when you trade-up. Consult with a local realtor who can give you current market activity in your area to make the best decision.
Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992
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