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Should You Get a Starter Home?

On Behalf of | Sep 11, 2018 | Firm News |

Starter homes are often considered a thing of the past. If you’re considering investing in one but aren’t sure if it’s the right decision, this post can help you decide.

What to Consider Before Investing in a Starter Home

Investing in a new home is a serious investment that shouldn’t be taken lightly. If you’re considering making your investment in a starter home but can’t quite decide if it’s the correct route to take, this post has more information that can help you make the right decision.

What Is a Starter Home?

If you’ve never heard of a starter home, it’s name pretty much gives away what it’s all about. A starter home is a term used to describe smaller, more affordable homes that are a good option for first time homebuyers, especially young professionals looking to invest in their first piece of property. These homes aren’t meant to be someones forever home, but rather a good place to start their real estate experience. While it may sound like a better idea to invest in a home you can see yourself in forever, starter homes may be a good option for some.

Things to Consider Before Investing in a Starter Home

Before deciding whether a starter home is right for you or not, there are a few things to take into consideration. If you’re interested in potentially buying a starter home, consider these points first.

The Location of the Home

One of the first factors to take into account is where the home is located. Most starter homes will be located in areas like the suburbs because these areas tend to be more affordable. Don’t expect to find a starter home at a great price in the most trendy area of town. If living in the suburbs doesn’t sound like something you’d be ok with, you may be better off renting until you can afford your dream home. Another reason why location matters so much is because you should have plans to sell your starter home in the future. If the location isn’t great, this can greatly affect the resale value while making it harder to even sell the home. Whether you’re investing in a starter home or a forever home, title insurance is a must. To learn more about title insurance and why it’s so important, contact Home Key Title at (508) 475- 5502.

What Are Your Future Plans?

Even if you don’t have plans to stay in your stater home forever, you should have plans to be there for the next few years. If you can’t make a commitment for at least three years, renting may be a better option. Also, be realistic about future changes, such as starting family, taking a job offer across the country, or even getting a serious raise at work. These can all change how your feel about your home. A growing family can mean you’ll need more space, a serious raise can help you afford your dream home, and a move across the country can mean you need to sell your home fast. Take all of this into account before investing in any home.

Penalties of Leaving Earlier

You may be thinking that none of this is a real problem because you can always sell your home, but that can lead to penalties. For example, if you sell your home after living in it for less than two years, you may be left paying taxes on the profit you make on the sale. Avoid any money issues by investing in a home only if you’re sure you’ll be living in it for a significant amount of time.

Can You Afford It?

Whether you’re investing in a starter home or a forever home, be sure you can afford to make such a large investment. Some people buy a home because they’re being pressured into it or because they feel like it’s what they’re supposed to do at their age. These are never good reasons to buy a home, especially if you don’t have the finances for it. Before purchasing a home, do your best to pay off your debts and have enough in your savings to comfortably make a downpayment. If you’re not quite ready for this, that’s fine! Just wait a few more years while you save up and get to a more stable financial situation. Then you’ll be able to find the right home without putting yourself in a tricky situation.

Purchase Title Insurance in Worcester

If you’re in the process of buying your first home, title insurance is something you may not know much about. Luckily, you can contact the title insurance experts at Home Key Title for more information. Give them a call at (508) 475- 5502 to learn more.