If you’re thinking about buying a home for the first time, you might feel overwhelmed at the thought of having to save for the down payment. Even with living in a budget and saving every extra penny you make, it can take years and years to scrape together the funds necessary to put down 20, 10, or 5 five percent on a home.
Most families save their entire life savings to buy a home for themselves. While it might have been a good idea a decade ago, in today’s times, arresting finances is not such a good idea. By tying down investments for such a long period, people are not able to toutilize the same from an investment point of view.
To help make your dream of homeownership more of a reality, you may want to consider making your first home purchase be a starter home as opposed to waiting for your dream home. To show you how this might make more sense for you, here are three tips for finding the right starter home for you.
Think About What A Starter Home Means To You
Before you start looking for your starter home, you should first figure out what it means to you to be getting a starter home. While you might love to have a home with tons of extra space and luxurious finishes, this isn’t going to be what’s in a starter home for many first-time buyers.
According to Elizabeth Weintraub, a contributor to The Balance, it’s important not to get carried away with the amenities when looking for a starter home. Ideally, you should find something that’s going to be a smart investment and a way for you to build quick equity while also suiting your most basic needs. This is more in terms of investment. Rather than saving for thirty years and buying a big house, you can start from a starter home, and flip it after 5 years. This will help you grow your investments significantly.
Don’t Buy A Home That Needs A Ton Of Renovations
In many markets, the only homes that are going to be below market value and easily accessible as starter homes for first-time buyers are those in need of some TLC. However, there’s a big difference between needing a little extra attention and needing full-on renovations.
Because your goal with a starter home is to save money, Donna Fuscaldo, a contributor to Investopedia, advises that you try to find a home that’s been well enough maintained even if it’s older. This will ensure that you won’t have to put a ton of money into it in renovations to make a profit.
Sometimes, the costs of renovations far surpass the actual buying cost of the house. Do not go for such investments unless you have very deep pockets. Renovations will make you lose your peace of mind, and drain your finances at the same time.
Have A Plan For Moving Up And Out
The point of purchasing a starter home is that you’ll eventually move out of it and into a home that’s more suited to your dream home. To make this goal a reality, it’s wise to come at the whole process with a plan for how to get out of this home and into a new one.
According to Emily Starbuck Crone, a contributor to NerdWallet, some of your options when offloading your starter home could include selling it or turning it into a rental property if that works better for you and your future investments.
If you’re wanting to buy your first starter home soon, consider using the tips mentioned above to help you make a good investment here. By renting out the property, you will ensure a fixed return on investment every month. In addition, the rent will also keep increasing owing to improving market conditions.
Buying a home for themselves is the biggest dream that most individuals have. Not to mention, the biggest expenditure that you are going to make. If you are just starting out, it would be a wise idea to invest in a starter home and learn the basics of real estate. This will help you eliminate may foreseeable problems that might happen for first time home buyers.