Purchasing your first home is one of the most exciting things you’ll do in your life. It requires big changes and important considerations, one of which is whether or not you should buy a starter home or a forever home first. This brief guide presented by John Dunford, MBA of Dominion Lending Centres can help you understand the difference between the two and figure out what works best for you.
What Is a Starter Home?
Some characteristics of a starter home include less space and features with greater mass appeal. Most people purchase a starter home intending to stay no longer than five years. It may not have everything you want or need in your home, but it is a great place to start. If you consider buying a house “as is,” be prepared to face many possible issues. Consult with a lawyer before signing an agreement and have the property inspected. Additionally, check the land records for red flags, such as missing documents or multiple recent transfers of the property.
What Are the Pros and Cons of a Starter Home?
The pros of purchasing a starter home first primarily center around financials. For example, you can typically find funding more easily because starter homes are smaller and more affordable. They also require less maintenance and renovation and provide you with the possibility of future income. When you decide to move on to your forever home, you can turn the starter home into a rental property for extra income or sell it for capital you can use to purchase your new home.
Cons include having less space should your needs change while you live there. It may also have more repairs if you purchased it “as is” or bought an older home. Additionally, you may have a difficult time selling it unless you choose to buy in a great location.
What Is a Forever Home?
A forever home is often larger and more customized than a starter home. Buyers looking for a forever home make plans to create a space to accommodate family growth and personal needs. Mass appeal is not a concern because the buyer intends to stay in the home permanently.
What Are the Pros and Cons of a Forever Home?
The most significant pro of buying your forever home first is that you can personalize it to make it perfectly suit your needs. It also allows you to put down roots and eliminates the need to move again. Because forever homes are larger, you can grow your family or even start an at-home business and have plenty of room.
Cons include a more costly purchase and more money spent on upkeep and repairs. Additionally, more buyers immediately do major renovations to make their forever home reflect personal tastes. Should you need to sell, a custom home typically doesn’t attract as many buyers.
When Do You Start Planning Your Move?
Research shows that starting the packing process at least eight weeks prior to moving day eliminates stress and helps you stay more organized. If you did wait until the last minute, consider hiring a moving company with full-service offers. You can connect with local movers online, read reviews, and get quotes.
As you think about the right move for you, remember there is no wrong answer. Choosing between a starter home and a forever home is about personal preference and your financial situation. Keep in mind that even a forever home doesn’t have to be permanent.