Finding the perfect starter home is a journey as well as a destination. You’ve got know what you want, then adjust expectations to meet the reality of the market. In the end, you don’t have to settle on your forever home – just a place you’ll call home for at least five to seven years. You want to buy something that you know will last.
So how do you know what’s going to stand the test of time? It can be scary and overwhelming, but there is a foolproof formula to picking the right starter home.
Manageable monthly expenses
If you’ve been renting all your adult life, you’ll be surprised by how much owning a home actually costs. There’s a mortgage, real estate taxes, insurance premiums, utilities, and maintenance costs. And all of these costs increase over time! New homeowners are often not aware of how expenses can add up when they own a home. When calculating how much you can spend on a house, figure in all of these costs, and then add a little more for unexpected expenses. Make sure that your final choice truly fits your budget. That might mean buying something smaller, older, or farther out than you originally intended.
Low maintenance
Maintenance costs are the great unknown in homeownership – the older the house, the more it will cost to keep running. So unless you have the handyman skills and desire to fix whatever comes up, it’s better for your starter house to be new construction (less than 10 years old). You may even want to consider brand new construction, which costs more but whose parts are typically covered by a warranty. Standard coverage would be a one year warranty for labor and materials, two years’ protection for mechanic defects – plumbing ,electrical, heating, air conditioning, and ventilation systems – and 10 years for structural defects. Whether you buy a new or existing home, don’t forget to hire a good home inspector to thoroughly identify potential problems. Even if the home buyers are handy, they might not want to be spending their time up on the roof for a leak or in the basement up to their knees in water.
Room to grow
Your family may consist of a spouse and dog right now, but even if you aren’t thinking about expanding, it could change in a few years. Since you never know what the future holds, buy as much house as you can reasonably afford. Talk with your lender and get pre-approval for the largest mortgage you’ll qualify for. A lot of first time buyers have self-imposed limitations. Talk to a lender, and at least know what your ceiling is. Use that purchase power to buy space, which is much more important than fancy finishes. You can always upgrade a drab kitchen and knock out a wall to create an open floor plan. But adding more square footage by popping the roof or pushing out an exterior wall is extremely expensive and a major hassle.
Easy transition
Change is hard, and moving is particularly stressful. So don’t pick a starter home that will drop you into a totally unfamiliar lifestyle and location far away from the people and activities you love. Also, buy a place reasonably close to work. A daily commute is time-consuming and expensive, and will soon get old is you’re adding two or three hours to your work life. Remember this : You’ll be glad you did!
