How to Decide Whether to Buy a Starter House or Your Forever Home
When you decide to purchase your first house, the first decision you must make is whether to buy a starter home or the house you want to live in forever. There are pros and cons to both options. Here are a few things you must consider to make the best choice for you and your family.
What to Think About Before Buying a Starter Home
One of the biggest benefits of buying a starter home is the lower price tag. Because starter houses are often smaller than homes people want to live in forever, they are usually much more cost-efficient. The smaller square footage also means less upkeep is required to keep your home in good condition. Another benefit of purchasing a starter home is the potential to generate future income. You could rent out your starter home once you move to your forever house to generate income.
However, there's also a downside to purchasing a starter home. The most obvious drawback is the size. You won't have much room to raise a family. You may not have much storage space, and starter homes often come with small lots. They're not usually move-in ready and may be more difficult to sell in the future if you can't find specific buyers.
One study suggests that 33% of homebuyers in the current market are looking to purchase their first homes. Starter homes are harder to find because investors are buying up a significant portion of small properties. If you choose to purchase a starter house, you may need to have a quick offer ready when properties become available to beat out investors.
What to Know Before Buying Your Forever Home
Your forever home is the house you want to raise a family in. The houses are often more spacious than starter homes and have more features. Buying your forever home means preparing for your final move so you never have to think about packing up and transporting your belonging again. A final move means you finally have a chance to build a life without worrying about uprooting your kids in the future.
Buying your forever home comes with a significant price tag, however, and you may not be able to afford it when you're looking for your first house. Most people have to save for many years to afford their forever homes. You also have to spend more on keeping your house in good condition because you aren't expecting to sell it in the future.
Insurance is crucial regardless of which type of house you buy, but it is especially important for forever homes. Look over your policy to see what all it covers. Standard homeowners insurance usually covers the cost if your belongings are stolen, your home's structure is damaged or someone gets hurt on your property. You can purchase an additional home warranty to cover other unexpected costs. Because warranties vary widely in terms of coverage, you can find feedback from their home warranty reviews to find a policy that meets your needs without blowing your budget.
Deciding which type of house to buy is a big decision. If you're struggling with whether you should purchase a temporary starter house or your forever home, think about these pros and cons. Turn to KDM Real Estate to help you make the best choice.
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