A Guide to the Pros and Cons of Buying a Starter vs. Forever Home

A Guide to the Pros and Cons of Buying a Starter vs. Forever Home
  • Opening Intro -

    Buying your first home is one of the biggest milestones in life.

    One of the first decisions you need to make is whether you are ready to buy your forever home or just your starter home.

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There are pros and cons for each. Consider this simple guide from SayEducate to help you decide which is the right choice for you.

Things To Consider

One of the first things you should do as a new homebuyer is to assess your financial state and figure out what you can afford and what funding is available to you. Check your credit score and get any paperwork you need in order to take it to a lender.

Find a great real estate agent to help you determine what you spend realistically and what houses on the market fit your wants, needs, and budget. You may need to look into assistance programs that will help you make a downpayment or assist with modifications.

Be sure to include a strong insurance policy in your budget. Homeowners insurance only covers damage to the structure of your home, theft of your property, and liability for any injuries that occur on the premises.

You’ll need additional coverage to protect home systems, such as HVAC and appliances. This typically comes in the form of a home warranty. Just be sure to do your research and you can check out home warranty reviews before you purchase a policy.

Pros of a Starter Home

There are many advantages to buying a starter home. They typically cost less to purchase and require less upkeep.

Additionally, since you don’t intend to stay in them permanently, they allow you a possible future income by using the property as a rental. It also gives you the opportunity to learn more about owning a home on a smaller scale and build your home equity as well.

Pros of a Forever Home

A forever home gives you more leniency to customize. Your plan is to put down permanent roots so you don’t have to move again.

Therefore, you can renovate and decorate to suit your style. It’s a bigger home, designed to accommodate your future plans to have a family.

Cons of a Starter Home

Some downsides to a starter home are only relevant if they interfere with your plans for the future. For example, a starter home is a smaller place.

Since you plan to sell, you have to keep renovations and designs in line with mass appeal. They often need more repairs and can be more difficult to sell. However, if you purchase in a high-demand location, you’ll find it much easier to sell.

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Cons of a Forever Home

Your forever home is going to cost you more, primarily because of the size and the potential upkeep. A larger home will have extra repairs. Additionally, you may come across more problems during renovation.

The best way to dodge these issues is to budget for potential obstacles. Research shows that you shouldn’t spend more than 10 to 15 percent of the house’s value on renovations. Try to keep at least 5% available for surprises.

Now you have a few things to think about as you decide between a forever home or a starter home. Remember that the best way to avoid making mistakes is to stick to a strict budget.

You’ll have many lessons to learn as a new homeowner and so many exciting new memories to make.

Image Credit: by envato.com

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Categories: Home Buying

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