How to Decide Between a Starter Home and a Forever Home

 

If you’re buying a home for the first time, you’re likely confronted with the decision between purchasing your forever home and a smaller, more affordable starter home. There are advantages and disadvantages to each option. Depending on your circumstances, one might be a clear winner. However, sometimes it can be difficult to tell which type of home would make the most sense, both for your lifestyle and your finances. Let’s explore a few important considerations to keep in mind when purchasing your first home.

 

Get to Know Your Local Market

 

The first step in buying any home is getting to know your local real estate market. Having a better understanding of local real estate trends can help you navigate this decision. If, for example, housing prices are increasing and you think you can get a good return when you sell in a couple of years, investing in a starter home could be a good move. If, on the other hand, the market is stagnant or declining, you may want to find a forever home where you can stay put for a while. While you can do a lot of this research on your own, be sure to talk to a local real estate company, like Scates Real Estate, for a professional opinion.

 

How Much Home Can You Afford?

 

Next, calculate how much home you can afford. There are countless calculators online that can help you estimate your home affordability based on your income and existing debts. Many people rush into big home purchases and wind up house poor—meaning they have very little money left over after home-related expenses. Buying at the low end of your budget is always smart. If you can’t afford a forever home right now, stick with a starter home!

 

Remember that bigger homes come with higher costs beyond that of monthly mortgage payments. As Moving.com explains, property taxes, utilities, maintenance, and insurance will cost more as well. Keep in mind that home insurance only covers the home’s structure. If you want to insure your home systems, like your heating, cooling, electrical, and plumbing, as well as your pricey appliances, you will need a home warranty as well. A home warranty is an annual home protection plan for appliances, systems, even home entertainment.

 

What is Your Lifestyle Like?

 

Lifestyle is another reason to choose a starter home over a forever home and vice versa. If you want to have children in the next few years, a big home where you can host gatherings, or a private yard for gardening, buying a forever home might be your best bet. If, on the other hand, you’re not sure what your life has in store and you’d like to keep your options open, a starter home will fit your lifestyle better. Think about how the home will accommodate your current lifestyle as well as your future needs.

 

How Long Do You Want to Live There?

 

Next, ask yourself how long you plan to live in your new home. If you want a place where you can settle in and put down roots for a long time, you’re looking for a forever home. Forever homes are great for those looking to start a family! If you’re looking for a place to live for a couple of years with the intention of profiting off your investment or turning the home into an income property, you want a starter home. Save the forever home for when you’ve got your eyes on the horizon and you’re thinking long-term.

 

Choosing between a starter home and a forever home is one of the most important decisions you will make when it comes to purchasing your first piece of property. While each option comes with pros and cons, there will likely be one decision that fits you better, at least at this point in your life. Remember, you can always buy a starter home now and move into your forever home in the future!

 

Are you looking to buy a home in the Plymouth, MN area? Scates Real Estate can help! Contact us today so we can discuss your home buying needs! Call (612) 877-2100