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5 Tips for Owning Real Estate on a First-Time Home Buyer’s Budget

Updated: Jun 22, 2023

Becoming a homeowner can be scary. There are so many unknowns. But one of the biggest unknowns many of my clients share with me, is that they don’t think they are going to be able to afford to buy a home. I get it. As fellow colleagues, Jonathan & Garry Creath, put it so eloquently, “It’s not easy being a first-time homebuyer right now. At the end of last year, housing affordability hit an all-time low.1 Additionally, mortgage rates have risen significantly since 2021, while inventory remains tight for many property categories, but especially for starter homes. Even lower-priced condos are harder to snag these days, as investors and downsizers muscle out first-timers by offering stronger, often cash-heavy bids.2

To their point, the National Association of Realtors has shared that only 26% of last year’s homebuyers were first-timers—the lowest share on record and down from 34% a year prior.3 As a result, many first-time homebuyers are finding that they need to get creative or risk renting for longer than they planned.

But here is the deal. In many areas of the United States, including the Greater Sacramento Area, the largest group of people being pre-approved for home loans is...(drumroll please)...YEP! You guessed it…First Home Buyers!

If you, too, are struggling to afford homeownership, here are some fantastic tips to consider as you work toward your goal of owning a home!

House hacking can help offset expenses of owning a home
Try House Hacking to help offset expenses

1. Try House Hacking

This is not another term for breaking into a home…this is a “hack” to help you afford your monthly mortgage. “House hacking” is a real estate investment strategy in which participants use their homes to generate income in order to offset their expenditures.

For example, some people may rent out a spare room, or their basement, a converted garage, or maybe a “cottage” (otherwise known as an accessory dwelling unit ADU), to generate income. renting out a basement apartment or ADU.

Having roommates can also help with splitting the costs. Some people are able to charge enough rent that they are not out of pocket at all–and basically live “free” in the home they purchased. Brilliant, right? You can also consider using part of your home as an AirBnB.

This strategy has been around for a very long time–but lately it’s grown in popularity, largely because of so many digital platforms on the market that make it easier than ever for homeowners to generate income from their property.

According to the Creath brothers, “In some cases, house hacking may make it possible for you to qualify for and afford your first home. A lender, for example, may approve you for a larger mortgage if you purchase a home with immediate income potential, such as a legal duplex or a property with a secondary suite that has a kitchen and full bathroom.4

Here are some ways you can use your property to “house hack” to earn additional income: (Full transparency, I have not tried any of these below, but I am considering tip toeing in to the photoshoots idea).

  • Offer paid parking in your driveway on a site like Spacer or SpotHero.

  • Rent out your swimming pool for a few hours on Swimply.

  • Make your home available for photoshoots or events on Giggster or Peerspace.

  • Turn your backyard into a pay-by-the-hour dog park on Sniffspot.

  • List your garage space on an app like Neighbor Storage.

One thing is for sure, before you make plans to house hack, make sure you fully understand an area’s laws and HOA rules. We can help you find a home with income potential in a neighborhood with less restrictive zoning and regulations.

Capitalize on being a Multi-generational Household

2. Team Up With Friends or Family (aka: Joint Venture)

If you aren’t excited about welcoming strangers to your home, consider co-purchasing with a friend or family member instead. While this used to be thought of as an unconventional housing arrangement, it is now growing more popular as friends and family members cope with higher living costs by pooling resources. (I am seeing with many clients who “bubbled up” with their family/friends during COVID shutdowns, that they have grown accustomed to living in multi-gen homes or with their “homies”). So why not use this living arrangement to be an advantage for everyone?

I’m not the only one seeing this either. According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, the share of first-time homebuyers living with people other than children or a romantic partner is currently at an all-time high.3 Meanwhile, research from Pew found that multigenerational living has accelerated especially quickly, with a quarter of U.S. adults aged 25 to 34 now living in a multigenerational home.5

There are so many different ways you can use this strategy to work with your circumstances. One example, you could purchase a home and then rent a portion of it to a loved one. (I personally do this with an ADU on my property. When it isn’t rented out long-term, I revert back to AirBnB-ing it, and it pays for a large part of my monthly mortgage). Or you might consider co-buying a home with friends or family members so that you can step onto the property ladder and start building equity together.

The biggest reason co-ownership can work well is it helps you get the financing for the home, but also allows you to buy a bigger home and maybe in a high-demand area, and one that may appreciate faster.. (Here’s a personal story that some of you might relate to). We have a son who wanted to buy his first property. He is also a realtor and crushing it! But, despite great credit, he couldn’t get financed for a decent loan on his own. So we had a family meeting and decided as a family we would each become minor partners in his home purchase investment. He lived in the property, (not us), and he house hacked it with roommates. Now he is moving on to buy another property and on his own this time. In the meantime, we (as investors), have held that property as a rental property. We make enough income from the rent that we are not out of pocket at all, each month.

That said, while you’ll get to see your loved ones more often and enjoy the coziness of shared living with people you like having around, there is something you need to consider when co-owning a property…sharing responsibility. Sharing a big financial responsibility, like a mortgage, with friends or family can be a nightmare if you don’t line-out clear expectations ahead of time. You need to be able to truly trust those individuals. So plan carefully before you proceed!

One last thing on this point, you may need to consider which kind of home you want to purchase. For example, a smaller home may be less expensive, but do you really want that much togetherness all the time? We can help you set priorities and search for a suitable property.

More than a third of homeowners received help from parents

3. Tap Your Network for Help With Funding

While not a new method, it is definitely an important one we should address. In order to afford a home, some first home buyers ask family or friends for financial help. Getting assistance with the down payment or other borrowing costs can go a long way toward making your homeownership dreams come true.

For some this is easy, for others it is a nonpoint. If you are willing to ask for the help, a free-and-clear gift intended for your down payment is an ideal arrangement, since it will allow you to borrow less overall. If help for the down payment is too much to ask for, then possibly some assistance with closing costs would be easier for your family/friends to help with.

Alternatively, your loved ones could help by co-signing your loan. (This is what we did in the example I shared with my son’s purchase). For example, if their credit score is a lot higher than yours, it could enable you to secure a lower interest rate so that your monthly payment is more affordable.

Check this out: A recent YouGov poll found that more than a third of homeowners, (and 79% of those under 30), received financial help from their parents when buying their first home.6 So you wouldn’t be the only one leaning on family to help afford a home at today’s prices.

It’s really important that your parents or generous friends/family are aware they’re giving a gift, not a loan, and are willing to put that in writing. A lender will want proof that this money isn’t adding to your debt burden and may require documentation from your benefactors. AND! They will need this gift deposited sooner than later.

Another way to tap your network for help is to crowdfund part of your down payment or ask for monetary gifts instead of tangible ones. This doesn’t have to be a fancy intricate set-up either. One example, if you’re getting married soon, you could skip the wedding gift registry and ask guests to contribute funds to your hoped-for home purchase instead. (Many guests may give you even more than what they would have spent on a gift from your registry). Or maybe for birthdays or gift-giving holidays you ask for the non-tangibles and for a donation to your new home fund.

4. Look for Special Programs and Assistance

Did you know that there are grants and other assistance out there to help you with your down payment? You may be able to cut some of your upfront mortgage costs by applying for special grants and funding opportunities.

For example, consider using a grant to help you fund your down payment. There are a number of public and private grants and down payment assistance programs that are expressly intended to help first-time buyers.

Just like a gift, you don’t have to pay a grant back. But, depending on your personal situation, you may find some grants difficult to qualify for—especially if you make a relatively high income.

Many grants are reserved for lower-income buyers only.7

Check out grant programs, such as the HomePath Ready Buyer Program, National Homebuyers Fund, the Good Neighbor Next Door Program, and specialized grants from banks. Also look to state and local sources for potential grants and down payment assistance programs, including forgivable and deferred payment loans, Individual Development Accounts, and DPA Second Mortgages.7

Similarly, if you have enough income to support a house payment but can’t spare much cash for your down payment, you may qualify for a government-sponsored loan, such as an FHA loan that allows you to put down as little as 3.5% to 10%.8

We can connect you with a lender or mortgage broker who can educate you about your options and help shepherd you through the process. Some financial assistance programs require you to work with specific lenders, while others require you to apply directly and fill out a separate application.

In addition, you may look to even less conventional options, such as seller financing. But be aware these kinds of arrangements are rare and hard to find. Depending on the market, you will likely get more help from a seller if you ask them to pay closing costs or contribute to your mortgage rate buydown. In many cases, we can help you negotiate seller concessions that make your home purchase more affordable. In most of the offers I have written in the past 6 months, I have been negotiating great concessions that have been accepted…so I know this is do-able!

Find more deals

& options

by making small compromises

5. Expand Your Home Search

If you have a super tight budget, I often recommend to my buyers to expand their search. In other words, broaden your search criteria. Many times my buyers are surprised by the kinds of deals that are available when they are willing to compromise.

This has happened to me personally. Many people know my husband and I buy live-in fixers. We fix them up, we sell them, and move on to the next one. For our current one, if I hadn’t taken out one key element of my search, I would never have found the amazing home I did! (So much so, we are contemplating this to be our LAST live-in fixer…we may actually stay)!

Another example, if you’re struggling to find an affordable home in your target neighborhood, expand your search area and consider homes that are further out of town or that are located in up-and-coming areas with lower starting prices. We would be happy to introduce you to some great but lesser-known neighborhoods that we consider hidden gems.

You could also save money on your home purchase simply by dropping or revising some of your must-haves and settling for OK-to-haves instead. (Like I did). For example, do you really need two bathrooms and a large backyard? Or could you settle for a single bathroom with space to add a second one in the future? And would a small garden, cozy balcony, or rooftop terrace still give you the outdoor time you crave? These types of compromises can sometimes shave tens of thousands off your purchase price.

Similarly, if you don’t mind rolling up your sleeves or working with a contractor on minor jobs, you can look for homes that need a little TLC. Just because a house looks dated doesn’t mean it’s destined to stay that way or that it will take a ton of money to spruce up. In fact, a home with good bones but cosmetic flaws could be a perfect match: With less competition, you’ll have a better chance of purchasing the home at an affordable price. You can then take your time to save more and fix it up to your taste. (This is what I do for many of my personal real estate investments).

Keep in mind, starter homes are rarely forever homes. I help my buyers understand that they are a stepping stones to building wealth in real estate. (Your home is an investment you live in). You are getting in and building your equity through making your payments (instead of making someone else’s mortgage payment, ie: Rent), and if it is a fixer, you may be making sweat equity too! Regardless, by gaining a foothold in the real estate market now, you can set yourself up to afford a more expensive property in the future.

If you aren't convinced that owning a home is right for you, then check out this statistic: According to the National Association of Realtors, in 2021, the net worth of a typical homeowner was $300,000, while that of a renter was only $8,000.9 We can help you find an affordable first home so you can start building equity to reach your long-term financial and real estate goals.


Buying a first home is challenging, but it’s not impossible—especially when you have a savvy real estate professional in your corner. We will work with you to devise a plan to overcome your financial constraints. Then, we’ll help you find a home that not only excites you but also fits your budget and lifestyle. Give us a call to get started with a free exploratory consultation.

I also have a fantastic & FREE First Time Home Buyers Education program. Reach out to me today to learn more: Mickie Giacomini, Realtor® at

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.


  1. Housing Wire –

  2. –

  3. National Association of Realtors –

  4. ValuePenguin –

  5. Pew –

  6. YouGov –

  7. Bankrate –

  8. Investopedia –

  9. National Association of Realtors –


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