Should You Buy a Starter Home Before Buying Your Dream Home?
When you’re looking to buy a home, you want a professional and reliable agent on your side, and Sutton Group Preferred is here to help. Our knowledgeable agents understand the local market, and we can help you find the perfect home that fits your families needs and budget. Reach out today!
How to Decide If You Need More Than a Starter Home
Purchasing a home is usually a person’s biggest investment. Though it may be best for many first-time buyers to acquire an inexpensive starter home, some buyers are in a position to seek the longer-term investment of a “forever home.” If you’re on the fence, Sutton Group Preferred wants to help with the following information.
The housing market continues to have affordability issues, meaning that more people wait to buy homes until they are older. Suppose you have waited some years to make your first home purchase. In that case, you may be in a position to buy a forever home because you have a better concept of what you want, especially if you have a preferred school district for your children and have settled into a career and community.
A starter home can be a better choice if you’re younger and have more flexibility. If you don’t spend much time at home but prefer to go out on weekends and regularly travel, a smaller starter house could be a more affordable home base with less upkeep.
Your Investment Potential
A starter home helps you build equity to buy your forever home eventually. You might be able to keep a starter home as a passive income stream by renting the property. Some people use “house hacking” strategies to begin homeownership by using nontraditional methods to own a home and lower the payment.
For example, you might purchase a duplex and rent the other side. Some people buy a home and get a room with housemates or build an extra unit on your property to rent. Others do a live-in flip. Some of these strategies may work with a forever home, but more expensive communities likely have greater property restrictions.
The best time to buy a house is when your credit and finances are excellent. While you can try to time market conditions to be perfect, world events can change the economy unexpectedly. If you find the ideal home when rates are high, you can prepare to refinance later when terms and rates improve.
A person should never overextend their homebuying budget. Forever homes are usually in better condition, reducing initial repair costs, but all houses need servicing at some point. Buying homeowners insurance covers you in case of theft, property damage or injuries on your property. Make sure you have appliances/systems covered under a home warranty. A newer forever home is often well-served by a home warranty that can be renewed annually to protect the higher-quality items.
Your Family Situation
If you need to keep an eye on aging parents, you have to decide whether to stay close or rely on state-sponsored programs for aid. A starter home can let you take an opportunity wherever you wish while you plan to move closer to your parents later. Depending on your timing and budget, you may opt for a forever home with space for parents or zoning to allow a backyard tiny home (sometimes called mother-in-law suites or granny pods.)
Higher-priced forever homes have a smaller market, so you may be able to get a deal. Affordable starter homes have more competition and potential for bidding wars. Calculate the current and future cost per square foot to ensure you’re getting a good deal.
The changing landscape of the property market means a starter home is not the best option for everyone. Evaluate your circumstances to conclude if your forever home is a more sound option.
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Jackie Wates of Hyper-Tidy.com