It seems that for the longest time, first-time home buyers invested in a starter home – a smaller, more affordable property that they intended to live in for a few years before their growing family needed more space. Typically, starter homes might be one, two or three bedrooms, a single bath, and have a price tag in our area of $150,000 or less.
But in recent years, some first-time home buyers have bucked that trend, opting instead to go right to their dream home and foregoing having a starter home at all. By renting a few extra years (or living with family or friends), they are able to build enough savings to opt for larger homes in nicer neighborhoods with better finishes and amenities.
The question is, is this the right move for you? Here’s a few questions to ask yourself before pulling the trigger on a bigger, more expensive home.
Can You Afford It?
Of course, the biggest question that needs to be answered is, can you afford a more expensive home or not?
This goes well beyond simply being able to afford the monthly mortgage payment, too. You also have to consider closing costs, the down payment, and the cost of upkeep of a larger home.
You even need to consider things like utility expenses, as the cost to heat and cool a larger home will be more than what they are for a smaller starter home.
Just be aware that buying a home at your absolute maximum budget can put you in a precarious position. Though many home buyers make it work with no problem, many others have found that maxing out their budget was a big mistake.
Make an honest evaluation of your budget and your comfort level with your house payment, and use that to decide whether you can skip the starter home and go straight into your forever home.
What Features Do You Want?
Photo by Kevin Wolf on Unsplash
When I bought my first home, I definitely wanted a garage so I wouldn’t have to scrape my windows each morning in the winter. The home I bought had a one-car garage, which was fine, but after I moved in, I realized that I really wanted a two-car garage so I had extra space to work on projects. So, the next house I bought had a two-car garage.
I share that story because I wouldn’t have known that I wanted a two-car garage unless I bought a starter home. I’d always rented homes with no garage, so when I bought my first home, a one-car garage seemed like the best thing ever.
When you skip buying a starter home, you run the risk of thinking that you know what you want only to find out that you weren’t exactly sure. And when you plunk down a giant pile of cash for your forever home, finding out that it isn’t your ideal home after all can be a huge disappointment.
So, make absolutely sure you know what you want in a home. Take ample time to consider features, amenities, size, location, and so forth, because once the house is yours, you might be stuck with it for a while!
Are You at a Point at Which You Can Put Down Roots?
If you’re just out of college, single, and working your first real job, buying your forever home might not be advisable. There is probably too much room for change in your life to make buying your ideal home a worthwhile endeavor – you might be transferred for work, get married and have a few kids, or decide you want to move to another city.
Granted, there are no guarantees in life, and even if you’ve got a well-established career and family life, things might change.
That being said, it’s just a fact of life for many of us that our younger years are more unpredictable, so oftentimes it’s a better bet to invest in a starter home and then a few years down the line move up to a larger one.
Everyone is different, though, so you have to do what’s right for you. Regardless, having a Realtor on your side is beneficial because we can help you determine what you can reasonably afford, and then find homes that meet your budget.