If you are beginning your home buying journey, you have probably heard the phrase “starter home” once or twice. This can be somewhat confusing for first-time buyers. After all, isn’t the idea to buy a home you can love and live in forever? Why would you go through all this trouble for a house you are not planning to stay in?
It may surprise you to learn that many buyers select their first homes with the knowledge that they will not be living there for an extended period of time. There are several reasons for doing so, not least of which is financing. Homes that fall under this category are generally smaller, less expensive, and allow new homeowners to begin building equity which can be put toward a larger, more permanent home in the future.
There are other advantages to buying a starter home as well:
You Don’t Miss Out on a Great Market
If you are shopping during a time when mortgage interest rates are lower, a starter home can be a great way to lock you into those rates. You’ll build equity through your property faster with less of your monthly payment going toward interest.
You Gain Experience in Home Ownership
Owning your own home comes with a unique set of challenges you may never have had to face as a renter. Repairs, maintenance, upgrades, landscaping-these chores are all part and parcel of owning a house. A smaller starter home allows you to begin cultivating the skills and responsibilities necessary to maintain a house without feeling overwhelmed by a lot of square footage.
You Refine Your Tastes
As you live in your starter home, you may decide to perform a few upgrades. Even if you plan on selling soon, certain renovations are always a great idea to increase your home’s resale value. Choosing new flooring or light fixtures will help you hone in on your personal tastes and priorities in a home. When it comes time to find your forever place, you will know exactly what you want.
What Counts as a Starter Home?
The definition of “starter home” will vary depending on the individual or individuals buying it. Generally speaking, however, starter homes meet one or more of the following criteria:
- They are at a lower price point
- They are in a less desirable school district or neighborhood
- They are in need of upgrades or new appliances
- They are smaller in size
- They lack more modern amenities
In other words, buying a starter home means making a few sacrifices. Since you won’t be living there forever, you can deal with the fact that there is only a one car garage instead of two, or that the kitchen appliances are somewhat dated. It’s an eyes-on-the-prize situation: this place will be the stepping stone to your dream home.
What are the Cons of a Starter Home?
Of course, there are some drawbacks of buying a starter home. The most obvious one is that you will have to start the buying and moving process all over again. This can be stressful and time consuming, and having this looming over you might be enough to convince you to hold out for a forever home instead.
You will also, presumably, need to sell your starter home, which presents its own challenges. You’ll need to work with an experienced RealtorⓇ to navigate all the paperwork, scheduling, staging, and other steps needed to properly sell your home.
When Should You Not Buy a Starter Home?
While buying a starter home is generally a good idea for most buyers, it is not for everyone.The main reason you would want to avoid purchasing a starter home is if you cannot stay in it long enough to build equity. In general, you want to be able to live in your starter home for at least two years. If you have a job or life event that is going to cause you to move any sooner, don’t buy a starter. If you are lucky, you will break even on your investment and find yourself back at square one.
Get Help Finding a Home in Denver
Whether you are looking for a starter house or your forever home, Brenda Kellogg Meyer can help you get there. Brenda has years of experience buying and selling homes in Colorado and can assist you with all aspects of the process, from listing to staging. Contact Brenda today to get started.