Looking for a Starter Home
Looking for a Starter Home.
A starter home is a stopgap between a rental and a dream house. In today's real estate market, however, that stopgap is becoming a little less temporary. If you're a first-time home buyer, you should plan to live in your starter home for seven to ten years. Your address might not change during that time, but your life will. To ensure that your living space suits both your current and future needs, look for a starter home that meets these four standards.
You may be able to afford an expensive mortgage now, but consider your future expenses as well. Weddings, children, and career changes can all impact your finances. Overspending on a starter home puts your current lifestyle and your future goals in jeopardy. Set a reasonable budget, and keep every offer and counteroffer below your upper limit.
Adaptable Floor Plan
Space should be a top priority in your search, since a lack of space is a key reason many homeowners sell their starter homes. Your starter home should be large enough to accommodate your future family. Look for rooms that can adapt to your family's needs with a few simple renovations; for instance, a guest bedroom can transform into a home officea nursery, while a downstairs den can be ed into a playrooma bedroom for an elderly relative. An adaptable floor plan ensures that you will be comfortable in your starter home for as long as you need to live there.
With their limited budgets, many first-time buyers have to choose between high-end upgrades and a first-class location. But those upgrades will start to look dated in the seven years you spend in your starter home. A home in a great location, meanwhile, always maintains its value. You might pay more for a home that is close to good schools, amenities, and transportation, but so will your future buyers.
Any starter home you buy should be in great condition. You shouldn't have to spend thousands on improvements just to bring the house up to a livable standard. You also don't want to spend thousands on repairs when it comes time to sell. Ask your home inspector to estimate the life expectancy of all the major components of the house. Ideally, you want the roof, furnace, and hot water heater to outlast your occupancy in the home by a few years; otherwise, you'll have to pay the costly replacement bills when you sell.
A starter home will never be a dream home. But living in a starter home for a few years longer than you originally intended has its benefits. With every mortgage payment you make, you are building equity. When it finally comes time to sell your starter home, you can use that equity as a down payment on your dream house.