Should You Buy a Starter Home or a Forever Home?

Approximately 35% of all homebuyers in the United States are first-time purchasers. While some new home buyers prefer to go for the property they envision themselves living in for many years, others opt for a starter home they can later trade for a bigger house. There are advantages and disadvantages to both choices. 

Starter Home Pros and Cons

The median age of Americans buying their first homes is between 23 and 41 years old. Millennials make up the bulk of first-time home buyers. With starter homes being the least expensive option, it's a way for many to get their foot in the door of the real estate market.

A starter home is a way to obtain some tax benefits, as mortgage interest, points, and property taxes are often deductible. Buying an inexpensive first home can often cost less in monthly payments than renting, and the upkeep is not costly. Owning a home can also be a source of passive income if you decide to rent it out. 

If you're working on advancing your career, a small first home can provide you with monthly payments that fit your budget while letting you build some equity for trading up to a larger home later on. Starter homes give you a first idea of what it's like to be a homeowner. 

Unfortunately, starters are smaller than what you might like. It may also come with issues that need to be addressed. Unless your home is in an excellent location, its future resale value may not be ideal when you decide to upgrade.

Forever Home Pros and Cons

If you know where you want to settle down for good, a forever home may make sense. This is due to several advantages, such as:

• Stability. You'll be putting down roots in a town where your children can grow up and become part of the community.

• Make personal improvements. You won't worry about how the next buyer is going to view the custom improvements you make.

• Room to grow. A larger home provides room to expand when children come along.

• Stay put. Move once and you're done.

There are also disadvantages to making your first purchase a forever home:

• The price is higher.

• Upkeep may be more expensive.

• If the home is large, it could also cost more to heat and cool it. 

Home Warranties Are Good

Most New York, NY, mortgage providers insist that you have adequate home insurance, and the larger the home, the more expensive the insurance. The location of your home influences the price of insurance, but keep in mind that although homeowners' insurance typically covers structural damage, theft, and injuries on your property, it doesn't cover things that can break down in a home, such as appliances. A home warranty is a yearly contract you can sign with a company that takes care of issues that can go wrong with your plumbing, heating, and other important systems that keep a home running smoothly. To choose the right coverage, take the time to research home warranty ratings here.

Know What You Want and Can Afford

After learning about the pros and cons of starter homes and forever homes, it may be clear that a knowledgeable professional can help you reach your goals of homeownership on your terms.

Visit RealtyTopia for expert advice in finding the home that suits your needs both now and perhaps for years to come. 

 

Written by Guest Contributor Sarah Bull