There are many good reasons to buy a starter home, especially if you are just starting on your journey to financial independence, moving to a new place, and ready to lay down some roots but aren’t in a position to buy your “forever home” just yet. If you’re considering buying your first home, there are a few things to consider before you do! Once you’re ready, your friends at Champion Movers will be there to help you move.
What Is a Starter Home?
A starter home, as the name implies, is the kind of home that you may be able to buy when you are just starting. Starter homes may be smaller, more affordable, and maybe don’t have all of the bells and whistle you’re forever home would have, but they are home. Generally, stater homes are great for young professionals and new families who want to lay some roots and build some equity instead of paying rent.
What Is the Upside To Buying a Starter Home?
A lot of the reasons that you may want to consider buying a starter home are largely financial.
First, buying a home allows you to stop wasting money on rent and start paying into something that will increase in value so that you can start earning money in the form of equity.
Second, apart from saving on rent, a starter home will eventually pay you back either by selling the home or collecting a return on your investment. If you want to, you could even keep the home and rent it out for passive income.
But by far, the most common reason that starter homes make sense is that they are more affordable than your forever home would be. It’s a lot easier to use a starter home as a stepping stone to your forever home than it is to jump straight into a 400k home.
What Are the Downsides To Buying a Starter Home?
While a starter home makes sense for many homeowners, there are a few disadvantages to consider. The first is that buying a starter home is a big commitment (financially and time-wise).
A starter home will require a down payment and all of the fees associated with buying a home, and in many cases, you will need to live in the home for a certain period for it to start to make sense financially. If you’re at a point where you’re far from settling, you may want just to stick out the rental payments.
Finally, starter homes will eventually be outgrown. You may have bought the home as a bachelor, but now you must make room for a growing family.
What Should You Consider Before Buying a Starter Home?
Other considerations to keep in mind when moving into a starter home are:
• How much space do you need
• The kind of budget you’re working with
• Your future life goals are
• What the housing market looks like
If the answers to these questions make sense for a starter home, it may be a good fit for you.