Use these smart strategies to become a mortgage-free homeowner as soon as possible.
Blogger: Michael Murray, managing director, Murray Property
Buying a real estate property in Sydney is perhaps the most expensive decision you’ve ever made in your lifetime. If you want better return value on your home, you can consider options like opting for a rental cash flow or reducing your utility payments to let your property pay for itself and to pay off your mortgage faster. Use these nifty tactics to get better return value from your property.
- Make lump sum payments to reduce your mortgage burden
If you come across a work bonus or an inheritance, you may want to use that windfall to make a lump sum payment into your mortgage repayment. This strategy enables you to reduce your repayment timeline commitment, so you don’t have to worry about paying your mortgage over the next 30 years. The more lump sum payments you put into your mortgage, the quicker you will be able to pay back your home loan. You can even set up repayments to coincide with the days you get paid, so you can always maximise the amount of money you set aside for the home loan repayment. Leaving your repayments to the end of the month can put you under significant pressure.
- Offer your house/room on rent for the holidays
If you’re planning on taking a vacation for a few weeks or have an extra bedroom to spare, why not consider giving it out on rent? Plenty of travellers are looking for cheap bargains for accommodation and will be more than happy to rent out a room or your whole home. This is an excellent way to earn some extra income. For example, assume you rent out your room in Sydney for $100 per night – this is excellent value for money. If you rent out the room for just 10 nights in a month, you could use the additional $1,000 you've earned to pay back your home loan faster.
- Use energy-efficient lights and appliances
The average annual cost of electricity in NSW households is approximately $1,925, which amounts to $160.41 every month. Lighting consumes eight to 10 per cent of the average household electricity. Switching to energy-efficient lighting technology and appliances can reduce the amount of energy you utilise for lighting by 50 per cent. Similarly, appliances can use up to 30 per cent of the energy in your home. Switching to higher energy rated appliances will help you save money on your electricity bills and reduce your carbon footprint. Most Australian electrical appliances come with an energy rating label to enable you to compare the electrical consumption between different appliances –– higher-rated appliances consume less electricity than lower-rated appliances. The added savings from using energy-efficient lights and higher energy rated appliances can be utilised towards paying back your mortgage faster.
When you buy a real estate property, you have to consider the cost of running your home over the years. Use these smart strategies to turn into a mortgage-free homeowner as soon as possible, so that you are free of stress and worry.