Think buying a house is out of the question? That’s not necessarily true. Many young couples cannot afford the large down payment on their forever home. However, buying a starter home can make more sense for those who want a home and at a cheaper price. Whether you are looking to build equity or for the right neighborhood, let’s take a look at the reasons you should buy a starter home.
The most important factor to consider when buying a starter home is the price. Mainly, can you afford this? If you have a good credit score (aim for over 700 for the best deals), a considerable down payment, and you can afford the property taxes, you will be able to buy a home. However, many people buy starter homes instead of buying their forever home first. Why is that? Well, it gives you a lot of options in the home buying process. Instead of looking for a home to emotionally attach yourself to for the rest of your life, you can focus on the price. This makes finding a home boil down to more simple factors. If you are in your mid-twenties and entering into the housing market, consider a starter home based mostly on price. Rember to do things like finding the best mortgage lender. It’s likely that in the next 5-10 years a lot of life changes could be happening. Whether that’s getting married or switching jobs, you can view your home as an asset. Which leads me to my next point.
One of the best reasons to buy a starter home is the ability to build equity. The home buying process can be tough and you shouldn’t put yourself through it unless you can get something positive out of it. Most often, when you buy a home it will appreciate in value. Making payments and keeping the house in good order will cause the value to increase. Eventually, you could sell that starter home and put that money back into buying you forever home. Unlike renting, you are building the value of your home. The more time that passes, the more the value should increase. You could also turn your starter home into a rental property. The important thing is that you view this purchase as a way to eventually turn a profit or benefit you other than just being a place of shelter.
Along with building equity, buying in the right neighborhood can be very beneficial to you. If you find a home in a growing neighborhood, property values are likely to increase. If an area is expanding or growing into more a metropolitan area, it’s a great time to buy a starter home. However, it’s important to have the right realtor in your corner to make this decision. Let them help get you in a neighborhood that will grow in value and be right for your family. You don’t solely want to base your decision on finances (although it should be the most important factor) because this will affect your family. Make sure the community is the right fit for you and your family. It doesn’t need to be perfect, but list out some basics you want and talk them over with your realtor. You may find that your forever home needs to be in that exact neighborhood!
Anyone can buy a much cheaper starter home if they are willing to put in the work. Depending on the home, you could add thousands of dollars in value after renovations. The great thing about this option is that you can make the home into whatever you want. It could even turn into your forever home! If you plan on going this route, make sure to hire an inspector before you buy the home. That way you will know exactly what you are paying for upfront. They can also spot problems the sellers may not warn you about. If you do not want to put in the work, this is not the option for you. It takes a lot of work to renovate a home and can be very taxing on a family.
Most experts agree that you shouldn’t buy a starter home unless you plan on living there for over 5 years. This is because of the cost of a home, and the time to build equity in the property. If you aren’t ready to settle down, this may not be the best option for you. Buying a home at any stage is a big life choice and you should proceed with clear goals. The right realtor will know this and can help show you a home that fits your priorities.
Looking to buy your starter home? Then you’re going to need the best realtor for your needs. MWT Realty Group has the tools and resources to help you! Contact us today and let’s find you a home.