First-time home buyers are often tempted to shop for a 'forever home' for their families. Buying a less expensive starter home is usually a better idea.
If you're in the market for your first house, you may be wondering if a starter home is the best fit for you. Purchasing a home you can see your family in for years to come sounds like a great idea, but may not be the best option.
There are many benefits when buying a starter home. They're typically less expensive, so they provide all the benefits of homeownership but with a lower price tag.
Let's explore the reasons why this may be the best option for a first-time homebuyer.
The Benefits of a Starter Home
Interest rates are still very low, which makes this an ideal time for purchasing a home. The dream of homeownership becomes attainable. While it's tempting to get the most bang for your buck, you may want to hold off on searching for your forever home.
Starter homes may be what best fits your current budget. They allow you to purchase a home and build equity while continuing to save for a larger home.
There are other benefits if you are considering buying a starter home. If you purchase a home that needs a little fixing up, you can practice on your first starter house and learn the basics of home maintenance by the time you purchase your next home.
Purchasing a home is a learning curve. You'll make mistakes as a homeowner, and it's best to practice in your first home and not your dream house.
If your starter home needs a kitchen-facelift, then there's no better time to practice your handyman skills. Perfect the art of painting in your first house, and learn the basics of caring for equipment and appliances.
Factors to Consider
If you're a first-time homebuyer and a professional, then a condo or townhome may be the best fit for you. Often part of a Homeowners Association, you'll enjoy the rewards of homeownership but without the hassle of exterior maintenance.
If you're busy and don't have time to clean your gutters or power-wash your siding, then a Homeowners Association may be the best fit for your starter home.
Are you planning on staying in your starter home for 5 or more years? In order to avoid capital gains taxes, you may need to. If you move out too soon, you run the risk of paying taxes on any money made on your investment.
Another thing to consider is location. If you can't afford to buy a home in the ideal area you want to live in, then a starter home may be a good fit for you. It allows you to purchase a home until you can afford the neighborhood of your dreams.
Choosing the Right Home
You've gone over the pros and cons of purchasing a starter home, and you've come to the conclusion that it's the best choice for you.
You're going to save money, practice your handyman skills, and build equity, all while waiting for the day when you can buy the home of your dreams.
We invite you to check out our information on buyer assistance programs for first-time homebuyers, so you can make your dream of homeownership a reality.