When it comes to saving a down payment for a home most people struggle to come up with the funds. It requires a lot of discipline and dedication.
Some may wonder what's the purpose of saving for a starter home when I can just save up long term for my main house. This is a financial decision we must make for ourselves. The term "different strokes for different folks" does apply here. So here are a couple of pros and cons to buying the starter home.
CON: BUY TWICE, MOVE TWICE
The most obvious reason someone might try to skip the starter home is to avoid buying twice and moving twice. There are many fees and closing costs one has to pay; such as, mortgage insurance, home insurance, loan fees.
To think about going through the process twice scares people. This is the importance of having a good real estate broker and supportive team if you decide to begin with a starter home.
PRO: BUILD STABILITY
With homeownership comes a lot of responsibility and life lessons. You will make decisions and face new circumstances as a home owner.
You now can choose the cosmetic changes of your property. You are able to host, and take pride in the ownership aspect of your home. You might see yourself as joining a larger community.
CON: YOU MIGHT SPEND MORE THAN YOU PLAN
So, you will need to furnish your new place and buy curtains. You will have to landscape and take care of the yard.
Likely you will want to paint and refinish the floors. Hiring a contractor can be scary and expensive when it comes to your first projects. It's important to use someone you trust. Some who has experience.
TIP: Make major improvements over time. It's wise to move at a slower pace for your first home.
PRO: EQUITY IS KEY
The best part about buying a starter home is building equity. Queens and Brooklyn are hot markets if you are planning to commit to an area for 5-7 years. You are going to build up some equity – possibly a substantial amount. Values of homes are going through the roof and are on a steady rise. You will also be building in the value of the home.
It's wise to consult with your real estate professional to understand the trends and if it is the best time to buy in your market.
CON: IT'S A MAJOR COMMITMENT
We live in a new generation where people are getting married later, growing families later and staying single longer. If you are not commiting to an area for at least 5-7 years it would be wise not to purchase a home unless you are doing it for investment purposes.
If you are still iffy about moving into Queens or Brooklyn it's wise to know the area and culture before committing.
IT'S COMPLETELY UP TO YOU!
If you play your cards right, you can possibly make and save a huge sum of money in equity.
The starter home buying process is the most stressful because everything is new and scary. If it's a path you want to go on then follow these tips:
TIPS FOR SUCCESS:
-Find a good realtor (someone who knows the market you are in and can run comps for every potential good investment)
-Think fix me upper
-Be committed to your purpose and wants.
-Find the right contractor and fix as you go.
If you do decide to go with a starter home we wish you luck on your wealth building journey! If you have any questions regarding the process feel free to reach out to us at info@iarealtygroup.com